Ierna Beneficiary Pty Ltd v Commissioner of Taxation  FCA 725 – Commissioner’s admission evidence of excessive assessments
The Federal Court has agreed to consent orders that a taxpayer’s appeal against amended assessments should be allowed, after the Commissioner conceded that the assessments made were, in fact, excessive. In making its decision, the Court noted that:
- the Court could only exercise its powers to vary the assessments under section 14ZZP of the TAA 1953 where a taxpayer had discharged the burden of proof imposed by section 144ZO;
- as a taxation appeal is a judicial proceeding, the burden imposed by section 144ZO can only be satisfied by admissible evidence; and
- the Commissioner’s admission that the assessments were excessive was sufficient proof they were, to the extent of that admission, as a matter of fact excessive.
Aston v Commissioner of Taxation  AATA 1848 – AAT refuses to allocate excess contributions to previous income year
The AAT has upheld the Commissioner’s decision to refuse to reallocate excess concessional superannuation contributions to the 2018-19 financial year after the taxpayer made a contribution via direct debit on 26 June 2019 which was not received by his super fund until 1 July 2019. This was because the Tribunal considered the circumstances did not qualify as “special circumstances” under section 291-465 of the ITAA 1997. In making its decision, the AAT noted that:
- the time it took the taxpayer’s super fund to process his contribution was not unusual;
- the resulting tax imposed (as the taxpayer had made a further concessional contribution in August 2019 and subsequently exceeded the concessional contributions cap in the 2019-20 year) was not harsh; and
- when making concessional contributions close to the end of an income year, it is reasonable for taxpayers to confirm timely receipt, regardless of perceived payment timeframes.
Richmond v Commissioner of Taxation  AATA 1915 – No deduction for conditional joint venture expenditure
The AAT has affirmed the Commissioner’s decision that a $1.5 million conditional payment made by a taxpayer to acquire a 75% interest in a joint venture was not tax deductible under either section 8-1 (as it constituted capital expenditure) or Division 40 (as it did not result in the taxpayer obtaining a mining, quarrying or prospecting right or mining, quarrying or prospecting information) of the ITAA 1997.
Sexyworld (Aust) Pty Ltd v Commissioner of Taxation  AATA 1919 – No CFB for adult shop companies
The AAT has held that six related companies operating adult shop businesses were ineligible for the cash flow boost. This was because:
- payments to the group’s employees were made by a payroll company rather than the entities themselves, and as such the entities had failed to establish that they had made payments to employees as required by section 5(1)(a)(i) of the CFB Act; and
- the AAT considered that all but one of the companies had entered into a scheme with the dominant purpose of making themselves entitled to the cash flow boost, and as such had offended the anti-avoidance provisions of the CFB Act.
The NSW Chief Commissioner of State Revenue has applied to the High Court for special leave to appeal against the NSW Court of Appeal’s decision in Chief Commissioner of State Revenue (NSW) v Shell Energy Operations No 2 Pty Ltd  NSWCA 113 (covered in the Birchstone Brief for the week ended 2 June 2023).