This was an appeal pursuant to s 14ZZ(1)(a) of the Taxation Administration Act 1953 (Cth) in respect of assessments made under s 167 of the Income Tax Assessment Act 1936 (Cth) (TAA) from four Objection Decisions made by the Commissioner of Taxation. Each of the assessments had been made using the “asset betterment method”, which the Applicant/Taxpayer contended was excessive and that his actual taxable income far less. He submitted that he had proved his actual taxable income for those years and had provided a reasonable explanation for any income or appearance of the possession of assets in those years that had previously been unexplained.
The decision provided further articulation and clarity as to the onus of proof of a taxpayer in appealing or reviewing assessments assessed using the “asset betterment method”. In particular, the decision considered the principles set out in the previous Federal Court decisions of Ross and Le. The decision canvassed issues such as the credit of the Taxpayer and the witnesses, how to prove a taxpayer’s actual taxable income, whether the taxpayer’s vintage car activities were a hobby or a business, and whether he had proven that significant USD and AUD cash were from non-assessable sources.
The appeal was dismissed with costs.
Florence Chen appeared for the appellant, instructed by Morgan Conley Solicitors.
The judgment is published here.