The AAT has affirmed an amended assessment issued to a taxpayer, a company that ran a bakery business, for undeclared income and incorrectly calculated GST.
It did so on the basis of finding that the taxpayer had not satisfied the onus of proving the assessment was excessive. In arriving at its decision, the AAT took into account, among other things, that the taxpayer’s costs when compared to sales were 58% which was considerably higher than the 32% to 40% usually expected in the industry under relevant benchmarks, and the absence of any corroboration by way of documentary evidence. The Tribunal also relied on the discrepancy between income declared in relevant tax returns and the amounts shown on loan applications.
The AAT also upheld 50% shortfall penalties imposed for “recklessness”.
(AAT Case [2012] AATA 570, Re Vita Hot Bread Pty Ltd and FCT, AAT, Ref No 2011/1472 Ettinger SM, 29 August 2012.)
[LTN 169, 31/8]