The ATO on Fri 1.8.2014, released Decision Impact Statements on AAT Case [2014] AATA 337, Re Davsa Forty-Ninth Pty Ltd as Trustee for the Krongold Ford Business Unit Trust and FCT – In this case, the AAT mostly denied the taxpayer’s claims for input tax credits (ITCs) and a decreasing luxury car tax (LCT) adjustment in relation to motor vehicles. The ATO said the heart of the dispute between the taxpayer and the Commissioner was whether the taxpayer carried on an enterprise and acquired the cars subject to LCT to be used/held as trading stock. The AAT held that, while finely balanced, the taxpayer should be regarded as an entity that has engaged in a series of activities that have sufficient indicia of business to be regarded as carrying on an enterprise, or to have been carrying out steps in the commencement of an enterprise. However, it refused most of the ITCs claimed and the LCT adjustment. The ATO said the Commissioner accepts that while, as recognised by the AAT, it was finely balanced, the AAT’s decision that the taxpayer carried on an enterprise in the form of a business was open to it on the specific facts of the case.
[LTN 147, 1/8/14]