The taxpayer and the Commissioner have both lodged notices of appeal to the Federal Court against the decision in AAT Case [2012] AATA 404, Re Sanctuary Lakes Pty Ltd and FCT. The AAT had confirmed that the taxpayer was not entitled to deductions for over $18m in relation to a range of outgoings incurred in connection with the restructuring of the development of a “golf course and resort style living” complex. While the AAT affirmed the imposition of 25% shortfall penalties for failing to take reasonable care, it remitted the penalty imposed for claiming a deduction of $1.2m in the 2003 income year in relation to planning regulation obligations as it considered there was room for a rational argument that, viewed objectively, the taxpayer was entitled to the deduction.
[LTN 155, 13/8]