A taxpayer has been largely unsuccessful before the AAT in arguing that certain amounts, including deposits into his bank account, were not his income.

  • The taxpayer was a director and the controlling mind of a group of companies.
  • The Commissioner determined that the taxpayer had understated his income and issued amended assessments for the 2003 to 2005 income years.
  • The taxpayer objected but the objections were mainly disallowed.
  • The taxpayer’s application for a review of the Commissioner’s objection decision was heard by the AAT in 2012.
  • After the hearing, the ATO prepared spreadsheets seeking to summarise the adjustments made in the amended assessments.
  • Unresolved issues between the parties were brought before the Tribunal in 2015.
  • The main issue was whether 216 amounts identified in the latest spreadsheet should, as the Commissioner argued, be treated as the taxpayer’s income.

The Tribunal was largely unsatisfied with the taxpayer’s evidence, finding that he failed to demonstrate that most of the contended amounts did not represent his income. However, the AAT did accept a statutory declaration made by a lender that the taxpayer took out a personal loan of $10,000 and that, accordingly, the taxpayer’s liability should be reduced by this amount. The AAT also determined that the amended assessments were not out of time, as the taxpayer failed to discharge his burden of proving that he had not engaged in tax evasion.

The Tribunal remitted the matter to the Commissioner for reconsideration, directing that the concessions already made by the Commissioner and the Tribunal’s conclusions be taken into account.

(Re Zhang and FCT [2016] AATA 117, AAT, File Nos 2011/1548-1552, Frost DP, 2 March 2016.)