A taxpayer has failed to satisfy the AAT that various bank deposits totalling almost $853,000 over a 3-year period were not assessable income. The taxpayer had interests in various businesses operated through 3 companies, including a café, a bar and restaurant, a boat importing business and a tyre franchise. An audit of the taxpayer disclosed unexplained bank deposits (totalling almost $853,000) which the ATO included in the taxpayer’s assessable income for the 2015, 2016 and 2017 income years.
The taxpayer’s explanations for the deposits included:
- payments for labour and equipment provided to help a friend who was “unofficially” working as a project manager;
- repayments of loans he had made to the café and the tyre franchise; and
- the proceeds of the sale of stock, plant and equipment, a hot rod, a truck, a caravan and personal items.
However, the taxpayer produced no corroborating evidence to support his explanations for the bank deposits and the AAT was not prepared to accept the taxpayer’s word in the absence of corroboration. The AAT also upheld the administrative penalties.
Catchwords
TAXATION – default assessments – administrative penalties – taxpayer’s burden to prove assessment excessive – taxpayer’s burden to prove correct taxable income – whether assessment is excessive or incorrect – whether penalty should be remitted – decision affirmed
(Carvell v CofT [2021] AATA 3627, AAT, Reitano M, 8 October 2021.) [LTN 200, 19/10/21]
[Tax Month – October 2021 – Previous Tax Month]