Rowntree v Commissioner of Taxation [2018] FCA 182

FEDERAL COURT OF AUSTRALIA

Rowntree v Commissioner of Taxation [2018] FCA 182 Appeal from: Rowntree v Commissioner of Taxation [2016] AATA 420

File number: NSD 1187 of 2016

Judge: RARES J

Date of judgment: 1 March 2018

Catchwords: INCOME TAX – assessment of receipts of income said to be loans – appeal from Administrative Appeals Tribunal decision that assessment based on finding receipts were income not excessive under s 14ZZK of Taxation Administration Act 1953 – whether Tribunal erred by finding that objectively receipts by taxpayer from companies he controlled were income despite finding that taxpayer believed transactions were loans to him EVIDENCE – consideration of proof of contract where same person controlling mind of both companies or parties to a payment by one to the other without contemporaneous documents evidencing purpose or agreement – whether belief of person being controlling mind of both parties as to legal effect of payments sufficient evidence of that effect

Legislation: Administrative Appeals Tribunal Act 1975 (Cth) s 44 Corporations Act 2001 (Cth) ss 198E, 248B, 286 Income Tax Assessment Act 1936 (Cth) Div 7A, ss 109D, 109N Taxation Administration Act 1953 (Cth) s 14ZZK

Cases cited: ABC v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1 Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 Crowe-Maxwell v Frost (2016) 91 NSWLR 414 Endresz v Whitehouse [1998] 3 VR 461 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 Factory 5 Pty Ltd (In Liq) v State of Victoria (No 2) [2012] FCAFC 150 Federal Commissioner of Taxation v Rawson Finances Pty Ltd (2012) 89 ATR 357 Fisher v Divine Homes Pty Ltd (2011) 85 ACSR 512 Geebung Investments Pty Ltd v Varga Group Investments Pty Ltd (No 8) (1995) 7 BPR 14,551 Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315 Inland Revenue Commissioners v Sansom [1921] 2 KB 492 Julstar Pty Ltd v Hart Trading Pty Ltd [2014] FCAFC 151 Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 Lee v Lee's Air Farming Ltd [1961] AC 12 Masters v Cameron (1954) 91 CLR 353 Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) (2016) 329 ALR 1 Morlea Professional Services Pty Ltd v Richard Walter Pty Ltd (In Liq) (1999) 96 FCR 217 Nguyen and Commissioner of Taxation [2011] AATA 544 Pascoe v Federal Commissioner of Taxation (1956) 30 ALJR 402 Rawson Finances Pty Ltd v Commissioner of Taxation (2013) 296 ALR 307 Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165