In Chief Commissioner of State Revenue v Seovic Civil Engineering Pty Ltd [2014] NSWCATAP 94, the Appeal Panel of the NSW Civil and Administrative Tribunal overturned an earlier decision of the Tribunal, finding that the Commissioner was not required to de-group an administration company from the two other entities it provided services to.

The Appeal Panel found that the discretion to de-group may only be exercised if the Commissioner is first satisfied that any connections that exist between the businesses do not lead to a conclusion that they are connected in a commercial sense. The Appeal Panel stated the Tribunal failed to consider whether, due to the nature of an undisputed connection between the group members (ie the fact that the administration company solely provided services to the two entities in question and also provided key personnel to these entities via contracts) there was a connection between a business carried on between the relevant entities, so as to lead to a conclusion that the businesses were relevantly connected.

[IT 13.2.15]