The AAT has affirmed an amended assessment issued to a taxpayer for the 2004 income year that was based on an asset betterment calculation.
- In March 2005, the taxpayer lodged his 2004 income tax return declaring a taxable income of $7,382.
- In July 2011, the Commissioner using the asset betterment method issued an amended assessment.
- The amended assessment included an amount upon which the Commissioner’s judgment income tax ought to be levied of $451,154.
- The Commissioner was of the view there had been evasion on the basis that the taxpayer had withheld information.
- Since the taxpayer’s objection to the amended assessment, the Commissioner had amended his asset betterment calculations reducing the taxpayer’s taxable income.
The AAT said the taxpayer had not “adequately explained how he acquired assets from non-income sources”. It held the taxpayer had failed to discharge the onus of proving that the assessment was excessive. The AAT affirmed the Commissioner’s objection decision. It also agreed the penalty imposed should be for “recklessness” and not for “intentional disregard” of a taxation law. However, the AAT would not give the direction sought by the Commissioner to remit the matter to him to amend the taxpayer’s taxable income to $292,046.05 in accordance with another amended asset betterment calculation. (AAT Case [2014] AATA 595, Re Roesch and FCT, AAT, Ref No:2013/1839, Molloy DP, 22 August 2014.)
[LTN 163, 25/8/14]