Price Street Professional Centre Pty Ltd v Commissioner of Taxation [2007] FCA 345

FEDERAL COURT OF AUSTRALIA

Price Street Professional Centre Pty Ltd v Commissioner of Taxation [2007] FCA 345

TAXATION - whether Tribunal erred in finding that the losses incurred by the applicant were not allowable deductions under s 51(1) Income Tax Assessment Act 1936 (Cth) - whether losses incurred in gaining or producing assessable income - whether income or capital - definition of income - whether property acquired for the purpose of profit making by sale - relevance of purpose - purpose of those who controlled the taxpayer - whether "continuity of ownership" and "same business test" apply - whether continuity of ownership and same business test should be considered in the context of a capital loss TAXATION - PENALTY - whether a penalty of 75% was appropriate - whether Tribunal acted reasonably in finding "intentional disregard" on the part of the applicant TAXATION - ONUS OF PROOF - whether Tribunal incorrectly applied the onus of proof borne by the applicant - whether Tribunal improperly applied the rule in Jones v Dunkel (1959) 101 CLR 298 ADMINISTRATIVE LAW - whether some questions before the court were questions of law - whether question merely seeks a review of the facts - whether Court could consider new issue not the subject of a question of law PRACTICE AND PROCEDURE - whether reasonable apprehension of wrongful bias - whether Tribunal influenced by apparent error of fact

Held: The losses incurred by the applicant were capital losses and therefore not allowable deductions under s 51(1) Income Tax Assessment Act 1936 (Cth). No error found in the reasons of the Tribunal. No need to consider continuity of ownership and the same business test. No error of law by the Tribunal as to penalty. Tribunal acted reasonably in finding "intentional disregard" of the legislation for the purposes of s 226J Income Tax Assessment Act 1936 (Cth). No error of law by Tribunal as to onus of proof. Onus is borne by the taxpayer pursuant to s 14ZZK (b) Taxation Administration Act 1953 (Cth). Tribunal gave careful consideration as to the evidence and did not draw inferences adverse to the applicant on the basis of the rule in Jones v Dunkel (1959) 101 CLR 298. No reasonable apprehension of bias. Where question of law not before the Court, such question should not be considered.