In a decision handed down on Tue 5.3.2013, a taxpayer has been successful before the Full Federal Court in appealing against a Federal Court decision which had held that the taxpayer had not discharged the onus of proving that amounts of over $4.75m deposited in its bank account from an overseas bank were not income.
At first instance, in AAT Case [2011] AATA 628, Re Areffco and FCT, the AAT found the amounts were legitimate loans and that the payments made back to the bank in respect of them were legitimate interest deductions. It did so essentially on the basis of finding there was a sound evidentiary basis for concluding that the receipts were loans given, among other things, that they were from a reputable overseas bank and that the outgoings were real interest obligations in respect of those loans.
In allowing the taxpayer’s appeal, the Full Federal Court ordered that the Commissioner’s appeal from the AAT case be dismissed with costs. Among other things, the Court did not agree with the primary judge’s finding that the Tribunal’s characterisation of the receipt by the taxpayer of the funds from the bank as loans was not open on the evidence.
(Rawson Finances Pty Ltd v FCT [2013] FCAFC 26, Full Federal Court, Jessup, Jagot and Nicholas JJ, 5 March 2013.)
[LTN 32, 18/2/13]