The AAT has found that a taxpayer was not entitled to input tax credits claimed for the period 1 July 2002 to 1 December 2002 as there was no tax invoice or other documentary evidence to support the claims.
The taxpayer was represented in the proceedings by his mother who was his authorised agent and the person who lodged the BASs for the relevant periods. She contended that the input tax credits claimed related to a thoroughbred horse racing and breeding business which incurred expenses in relation to the purchase and upkeep of horses. The Commissioner disallowed the claims after an audit found no evidence for the claims, and issued assessments for net amounts owing for the relevant periods. The Commissioner also imposed a 75% shortfall penalty with an increase of 20% for obstruction.
During the proceedings, the taxpayer’s mother made various statements as to why supporting evidence could not be produced in relation to the input tax credit claims, including a house fire, depression, inability to retrieve the records from a computer, and uncooperative former accountants/bookkeepers. The Tribunal held that notwithstanding all the factors involved, it still remained that the taxpayer could not produce any supporting evidence. Therefore, it held that the onus of proof had not been discharged and affirmed the Commissioner’s amended assessments.
At the commencement of the proceedings, the Commissioner conceded that the appropriate penalty should be 50% of the shortfall, instead of the original 75% imposed. In addition, the Commissioner also conceded that the additional 20% penalty imposed for obstruction should no longer be imposed. The Tribunal agreed with the Commissioner, and also held that there were no exceptional circumstances or injustice in the case which warranted a remission of the penalty.
(AAT Case [2012] AATA 492, Re Trnka and FCT, AAT, Ref Nos 2008/4769 and 2011/0872, Redfern SM, 30 July 2012.)
[LTN 146, 31/7]