Hart v Commissioner of Taxation (No 4) [2017] FCA 572

FEDERAL COURT OF AUSTRALIA

Hart v Commissioner of Taxation (No 4) [2017] FCA 572 File number: QUD 29 of 2010

Judge: BROMWICH J

Date of judgment: 26 May 2017

Catchwords: INCOME TAX – appeal by taxpayer from objection decision disallowing objections to notice of assessment and notice of amended assessment – where Commissioner determined two amounts should have been included in applicant's taxable income for the 1997 income year – applicant taxpayer was a principal of a law firm with a tax advice practice – applicant taxpayer had filed a tax return for total taxable income of $100 for the relevant year – whether first amount should have been included in taxpayer's assessable income per ss 95A(1), 97 and 101 and/or Part IVA of the Income Tax Assessment Act 1936 (Cth) – whether the second amount should have been included in taxpayer's assessable income per Part IVA – whether penalties imposed by Commissioner ought be remitted or reduced – where appeal limited to one income year as a test case – held: taxpayer failed to demonstrate that assessments were excessive, ss 95A(1), 97 and 101 applied to first amount, Part IVA applied to both amounts, penalties ought not be remitted or reduced

Legislation: Income Tax Assessment Act 1936 (Cth), ss 95, 95A, 97, 100A, 101, 177A, 177C, 177D, 177F, 226, 227 Taxation Administration Act 1953 (Cth), ss 14ZZ, 14ZZK Queensland Law Society Act 1952 (Qld) Queensland Law Society Rules, r 78

Cases cited: Allen v Federal Commissioner of Taxation [2011] FCAFC 118; (2011) 195 FCR 416 Azzopardi v The Queen [2001] HCA 25; (2001) 205 CLR 50 Barnes v Addy (1874) LR 9 Ch App 244 Briginshaw v Briginshaw (1938) 60 CLR 336 Cameron Brae Pty Ltd v Federal Commissioner of Taxation [2007] FCAFC 135; (2007) 161 FCR 468 Colonial First State Investments Ltd v Federal Commissioner of Taxation [2011] FCA 16; (2011) 192 FCR 298 Commissioner of Taxation v Mochkin [2003] FCAFC 15; (2003) 127 FCR 185 Commissioner of Taxation of the Commonwealth of Australia v Bamford [2010] HCA 10; (2010) 240 CLR 481 D Marks Partnership (by its General Partner Quintaste Pty Ltd) v Commissioner of Taxation [2016] FCAFC 86; (2016) 338 ALR 25 East Finchley Pty Ltd v Federal Commissioner of Taxation (1989) 90 ALR 457 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 Federal Commissioner of Taxation v Ashwick (Qld) No 127 Pty Ltd [2011] FCAFC 49; (2011) 192 FCR 325 Federal Commissioner of Taxation v Consolidated Press Holdings Ltd [2001] HCA 32; (2001) 207 CLR 235 Federal Commissioner of Taxation v Hart [2004] HCA 26; (2004) 217 CLR 216 Federal Commissioner of Taxation v Lenzo [2008] FCAFC 50; (2008) 167 FCR 255 Federal Commissioner of Taxation v Peabody (1994) 181 CLR 359 Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 Federal Commissioner of Taxation v Trail Bros Steel and Plastics Pty Ltd [2010] FCAFC 94; (2010) 186 FCR 410 Federal Commissioner of Taxation v Vegners (1989) 90 ALR 547 Harmer v Federal Commissioner of Taxation (1991) 173 CLR 264 Hart v Commissioner of Taxation (No 2) [2016] FCA 897 Hart v Commissioner of Taxation (No 3) [2017] FCA 571 Jones v Dunkel (1959) 101 CLR 298 McCutcheon v Federal Commissioner of Taxation [2008] FCA 318; (2008) 168 FCR 149 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 Pridecraft Pty Ltd v Federal Commissioner of Taxation [2004] FCAFC 339; (2004) 213 ALR 450 R v Baden-Clay [2016] HCA 35; (2016) 334 ALR 234 RCI Pty Ltd v Federal Commissioner of Taxation [2011] FCAFC 104; (2011) 84 ATR 785 Richard Walter Pty Ltd v Commissioner of Taxation (1996) 67 FCR 243 RPS v The Queen [2000] HCA 3; (2000) 199 CLR 620 Sanctuary Lakes Pty Ltd v Federal Commissioner of Taxation [2013] FCAFC 50; (2013) 212 FCR 483 Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 Toksoz v Westpac Banking Corporation [2012] NSWCA 199; (2012) 289 ALR 577 Trustees of the Estate Mortgage Fighting Fund Trust v Commissioner of Taxation (2000) 102 FCR 15 Walsh Bay Developments Pty Ltd v Federal Commissioner of Taxation (1995) 130 ALR 415 Walstern Pty Ltd v Commissioner of Taxation [2003] FCA 1428; (2003) 138 FCR 1 Weissensteiner v The Queen (1993) 178 CLR 217