The Commissioner has been successful before the Federal Court in appealing against an earlier AAT decision, which had allowed to an extent a taxpayer’s claim for depreciation for certain items of plant and equipment used in a partnership business.

The matter concerned assessments issued under s 167 of the ITAA 1936 to the taxpayer for the 1994 to 2001 income years. The Court noted the Tribunal had proceeded by first permitting the taxpayer’s “concession” in accepting the Commissioner’s estimate of his income and then determining that the only issue remaining was the taxpayer’s claims for depreciation expenses. The Tribunal allowed certain depreciation claims and in doing so held the taxpayer had established on the balance of probabilities that the Commissioner’s assessments in the income years in question were excessive.

The Court said a taxpayer seeking to challenge an assessment under s 167 will not succeed merely by proving error by the Commissioner. It said the task for the taxpayer on objection was not to prove that the Commissioner erred but to prove, albeit on the balance of probabilities, the correct amount upon which tax should be levied. It went on to say that the subject matter of challenge to an assessment under s 167 is “the amount” upon which the Commissioner has determined tax ought to be levied and not the individual elements of assessable income and deduction, which together would have made up taxable income to the assessment if it had been made under s 166.

In conclusion, the Court held the taxpayer had failed to discharge the burden of proof that the assessments were excessive. Accordingly, the Tribunal’s decision was set aside and remitted for redetermination.

(FCT v Rigoli [2013] FCA 784, Federal Court, Pagone J, 7 August 2013.)

[LTN 152, 8/8/13]

Taxpayer has lodged appeal to Full Federal Court

The taxpayer has lodged a notice of appeal to the Full Federal Court against the decision in FCT v Rigoli [2013] FCA 784. In that case, Commissioner was successful before the Federal Court in appealing against an earlier AAT decision which had allowed to an extent a taxpayer’s claim for depreciation for certain items of plant and equipment used in a partnership business.

[LTN 167, 29/8/13]