Category Archives: Tax Month – January 2013

DCT v Zerafa – Summary judgment granted against unrepresented taxpayer for tax debts benefiting from the ‘conclusivity’ provisions [29]

In a decision handed down on 15 October 2012, but only just released by the NSW District Court, a Deputy Commissioner has been successful in obtaining summary judgment against a taxpayer for tax debts totalling around $331,000 (including administrative penalties and GIC). The Commissioner sought summary judgment following the taxpayer’s failure to pay income tax for the…

*R v Milne – further jail sentence for further omitted income in tax returns [30]

The NSW Supreme Court (Fullerton J) has sentenced a man to imprisonment for 2 years after he pleaded guilty to one count of dishonestly obtaining a gain from the Commonwealth, contrary to s 135.1(1) of the Criminal Code Act 1995 by lodging income tax returns for the 2000, 2001 and 2005 income years “containing false information in…

*DCT v De Simone – Summary judgment for tax debt partially refused – despite conclusivity provisions – because it was arguable an AAT decision was not properly applied [31]

In a decision handed down on 21 December 2012, but only released by the Victorian Supreme Court on Tue 29.1.2013, a Deputy Commissioner has been mostly successful in obtaining summary judgment against a taxpayer for tax debts. However, the Court allowed the taxpayer’s defence in relation to one year. The Deputy Commissioner sought summary judgment for unpaid…

*Re Dickinson and FCT & Re Fabig and FCT – Scrip-for-scrip rollover on share exchanges ‘available’ on substantially the same terms [25]

In 2 decisions handed down on Mon 21.1.2013, with identical facts, but involving 2 different taxpayers, the AAT has held that scrip-for-scrip roll-over relief was available under s 124-780 of the ITAA 1997 for the sale of shares pursuant to a share purchase agreement. The taxpayers were shareholders of a company. Under 2 arrangements, a Share…

Re Harbutt and FCT – Rental income reassessed; no splitting of income between husband and wife when only the husband was on title [23]

The AAT has affirmed amended assessments issued to a taxpayer for the 2003 to 2005 income years to include 100% of the rental income and deductions in relation to a commercial property owned by the taxpayer. The taxpayer had lodged his income tax returns on the basis that the rental income derived in respect of…

Re Kelly’s Office Furniture Pty Ltd & Anor and FCT – Amounts included in taxable income of companies; deductions denied [22]

The AAT has affirmed income tax assessments issued to 2 company taxpayers for the 2003 and 2004 income years, increasing the taxable income of both companies. The shareholders of the companies are members of the same family. After a tax audit, the Commissioner issued income tax assessments increasing the taxable income of both companies. In…

*Winery losses quarantined under Division 35 of the 1997 Act – non-commercial loss discretion not exercised [21]

The AAT has held it would not be reasonable for the Commissioner to exercise his discretion under s 35-55 of the ITAA 1997 (the non-commercial loss rules) to allow a taxpayer to deduct winery business losses from her other income. The taxpayer established a vineyard in WA in a joint venture partnership. She applied for…

Re Outbound Logistics Pty Ltd and FCT – Penalty for incorrectly claimed R&D expenditure reduced [20]

The AAT has set aside the Commissioner’s decision to impose a shortfall penalty of 50% for recklessness in relation to GST and income tax shortfalls arising from incorrectly claimed R&D expenditure and has substituted a penalty of 25% for failure to take reasonable care. The taxpayer had signed an agreement with a registered research agency…

Assessment of bank deposits upheld for failure to discharge onus and penalties affirmed [19]

The AAT has affirmed the Commissioner’s decision to assess husband and wife taxpayers on amounts deposited into their bank accounts in relation to the 2003 income year. It also affirmed the penalties imposed for recklessness and a 20% uplift for the relevant year. The taxpayers were involved in the investment and subsequent sale of a…

Re LVR (WA) Pty Ltd & Anor and FCT – the case where the AAT previously copied the Commissioner’s submissions – new AAT member dismisses Commissioner’s subsequent application for the case to be dismissed [18]

The AAT has refused the Commissioner’s application to have assessment review applications by 2 taxpayer companies dismissed. The companies are LVR (WA) Pty Ltd and CZ Holdings Pty Ltd and they are involved in the purchase, subdivision and sale of residential lots. On 30 August 2007, the solicitor for both taxpayers filed with the Tribunal applications for…