A taxpayer has failed before the AAT to prove that 4 amended assessments were excessive.
The taxpayer conducted a fitness business on the Gold Coast. During an audit of the taxpayer’s affairs, the ATO discovered a number of transactions, which, in its view, were not satisfactorily explained and decided that certain sums flowing into the taxpayer’s accounts were assessable income. As a result, the ATO issued amended assessments for the 2010, 2011, 2012 and 2013 income years.
In challenging those assessments, the taxpayer alleged that the money flowing into his accounts was connected with an unsecured loan of $US191,000 he made to someone he called a “con-man”. The loan was purportedly to allow that person (Mr L) to pay stamp duty in connection with a transaction, which, once finalised, would apparently enable Mr L to lend substantial amounts to the taxpayer for a property investment. The taxpayer claimed that the money paid into his accounts represented repayments of part of the loan.
The AAT said there were inconsistencies in the evidence – which included meetings allegedly held in a café and a hotel, reports of an unsigned loan agreement, a statutory declaration from a “consultant” who acted as a lawyer although he did not have a practising certificate and cheques that bounced – and concluded that the taxpayer failed to establish that payments from Mr L were in fact repayments of a loan. The taxpayer therefore failed to discharge the burden of proving that the amended assessments were excessive.
(Re Micallef and FCT [2016] AATA 974, AAT, Ref No 2015/4760-3, McCabe DP, 30 November 2016.)
[LTN 236, 6/12/16] [FJM corrections]