Ierna Beneficiary Pty Ltd v Commissioner of Taxation [2023] FCA 725

Federal Court of Australia

Ierna Beneficiary Pty Ltd v Commissioner of Taxation [2023] FCA 725 File numbers: QUD 247 of 2022 QUD 248 of 2022

Judgment of: LOGAN J

Date of judgment: 30 June 2023

Catchwords: TAXATION – where Commissioner amended income tax assessments for applicants based on application of Div 7A to the extinguishment of loans payable – where Dissh Pty Ltd was further issued an amended assessment of income tax reducing the carried forward tax losses to zero, resulting in increase in taxable income and income tax payable – where applicants objected against amended assessment on operation of Div 7A – where Commissioner disallowed objection – where applicants filed notices of appeal in this Court – where, during trial, Commissioner concedes the amended assessment excessive – where the court has power to make an order under 14ZZP of the Tax Administration Act 1953 (Cth) (TAA) if satisfied the applicant has discharged the burden of proof specified under s 14ZZO(b)(i) of TAA by proving the amended assessment is excessive – where a concession made by the Commissioner that the amended assessment is excessive the onus on applicants is discharged – where parties make joint submissions the appeal should be allowed –where the mere consent of the parties is insufficient basis to exercise power under s 14ZZP of the TAA – where consent orders must conform with legal principles Thomas Australia Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 applied – where the Commissioner's admissions enough to satisfy evidentiary burden s 81 and s 87 Evidence Act 1995 (Cth) – objection decision set aside and remitted to Commissioner for amendment of assessment

Legislation: Constitution ss 51(ii), 75(v) Administrative Appeals Tribunal Act 1975 (Cth) s 44 Evidence Act 1995 (Cth) ss 81, 87 Judiciary Act 1903 (Cth) s 39B Taxation Administration Act 1953 (Cth) ss 14ZZ, 14ZZO, 14ZZP