Taxpayer Mr X and Anor and Commissioner of Taxation [2012] AATA 917 (21 December 2012)

Last Updated: 3 January 2013

[2012] AATA 917

Division	GENERAL ADMINISTRATIVE DIVISION
File Numbers	2011/2206-2207, 2011/2208-2209
Re	Taxpayer Mr X Taxpayer Mrs X
	APPLICANTS
And	Commissioner of Taxation
	RESPONDENT

DECISION

Tribunal	Mr F D O'Loughlin, Senior Member
Date	21 December 2012
Place	Melbourne

For taxpayer Mr X, the Tribunal affirms the decision of the Commissioner of Taxation in respect of the 2003 year objections.

For taxpayer Mr X, the Tribunal sets aside the decision of the Commissioner of Taxation in respect of the 2007 year and in lieu thereof allows the objection in full.

For taxpayer Mrs X, the Tribunal affirms the decision of the Commissioner of Taxation in respect of the 2003 year objections.

........................................................................
Mr F D O'Loughlin, Senior Member

Catchwords

TAXATION – deposits to bank accounts assessed as taxable income - whether taxpayer’s burden of proof discharged– - whether penalty payable - decision affirmed

Legislation

Taxation Administration Act 1953 section 14ZZK, Schedule 1 s 284-220

Cases
Federal Commissioner of Taxation v SNF (Australia) Pty Ltd [2011] FCAFC 74
Davis v Federal Commissioner of Taxation [2000] FCA 44; (2000) 171 ALR 654
Federal Commissioner of Taxation v Dalco [1990] HCA 3; (1990) 168 CLR 614
Galea v Federal Commissioner of Taxation 90 ATC 5060
Gauci v Federal Commissioner of Taxation [1975] HCA 54; (1975) 135 CLR 81
George v Federal Commissioner of Taxation [1952] HCA 21; (1952) 86 CLR 183
Imperial Bottleshops Pty Ltd & Egerton v Federal Commissioner of Taxation 91 ATC 4546
McAndrew v Federal Commissioner of Taxation [1956] HCA 62; (1956) 98 CLR 263
Moreau v Federal Commissioner of Taxation [1926] HCA 28; (1926) 39 CLR 65
Pascoe v Federal Commissioner of Taxation (1956) 30 ALJR 402
Tisdall v Webber [2011] FCAFC 76
Trautwein v Federal Commissioner of Taxation [1936] HCA 77; (1936) 56 CLR 63
Vu v Commissioner of Taxation [2006] FCA 889

REASONS FOR DECISION

Mr F D O'Loughlin, Senior Member


21 December 2012

1. Taxpayers disputing assessability of monetary receipts must prove the receipts are not assessable. Uncorroborated self-serving statements are to be received as proof with great caution.
2. The Applicants’ bank accounts were credited with amounts they contend are loans or transfers from other accounts which the Commissioner has assessed. The Applicants’ personal testimony is the only evidence in support of their contentions that the amounts credited were not income. Other evidence, or absence of it, does not assist or, worse, harms their case.
3. The first issue in dispute is whether the Applicants have demonstrated that their assessments are excessive.
4. The second issue in dispute concerns the penalty associated with admitted and contested tax shortfalls.
5. The rules to be applied to determine this application are not controversial. The facts are.
6. Table 1 sets out the amounts in dispute.

Table 1
Year	Description	Mr X	Mrs X
2003	Deposits to Bank Accounts made by Mr B	$223,735.36	$89,392.14
2003	Interest in Bank Account	$13,704.00*	-
2003	Receipt of money following sale of the Property	$462,500.00*	-
2003	Penalty at 50%	-	$18,797.14
2003	Penalty at 50% plus an uplift of 20%	$200,245.25	-
2007	Deposits to bank account	$82,223.13	-
2007	Penalty at 50% plus an uplift of 20%	$13,699.00	-
* Mr X accepts that these amounts are assessable and their continuing relevance concerns penalty

THE FACTS

7. The 2003 year deposits to the Applicants’ bank accounts and the $462,500 receipt occurred in a sequence proximate to a number of actions that were taken by three companies and their controllers, the Applicants and another individual who all had a connection or relationship of some form in connection with an investment in, and subsequent sale of, a large parcel of land located at a suburban shopping centre (the Property).
8. The money flows from the sale of the Property have formed the basis of at least part, if not all, of the income tax and related penalty assessments noted above which are now challenged.

The Cast

9. The Applicants, Mr and Mrs X, are a married couple. They are members of a community of Australians with a particular foreign ethnicity. They live in an Australian capital city and conduct a service business based there.
10. Mr B is a member of the same community of Australians as Mr and Mrs X. Mr B is said to be a successful business man and has a business relationship with Mr X but lives in a different Australian capital city.
11. Australian Holdings is an Australian company of which Mr X was a director throughout 2001, 2002 and 2003.
12. International Holdings is a non-Australian company.
13. International Holdings initially owned substantially all of the issued shares in Australian Holdings and appointed directors of Australian Holdings. Mr X initially had a small shareholding in Australian Holdings and he increased it in 2006.
14. Mr B had a relationship, the precise nature of which is not clear, with International Holdings, and/or its directors and similarly with Australian Holdings.
15. Marketing is an independent company that carried on business as a real estate agent in an Australian capital city. Marketing was retained by Australian Holdings to sell the Property.

The failed shopping centre development and $462,500 paid to Mr X.

16. Until January 2001 Mr B was the registered proprietor of the Property. During January 2001, Mr B executed a transfer of the Property to Australian Holdings, then a majority owned subsidiary of International Holdings.
17. International Holdings had planned for Australian Holdings to develop the Property into a substantial commercial and residential complex. Mr X had a role in the planned development. Successful completion of the project was to be followed by shares worth $500,000 in Australian Holdings being issued to Mr X without charge to him.
18. Due to what was described as a liquidity problem abroad, International Holdings decided to sell the Property and engaged Marketing to facilitate that sale.
19. Shortly after being engaged to sell the Property, Marketing valued the Property at $27m.
20. International Holdings instructed Marketing to discount the sale price heavily so as to achieve an immediate payment of $1.5m.
21. Marketing considered the discounted price as a disaster for itself and Mr X.
22. An offer of approximately $12m was received and International Holdings was considering accepting it. Marketing advised against it and indicated it could sell the Property for a better price.
23. In late December 2001 Marketing advanced a sale pursuant to which Australian Holdings would receive $17m clear of commissions with $1.5m being released to Australian Holdings upon signing a contract. The concluded contract sale price was approximately $18.5m.
24. On completion of the sale of the Property, Marketing received approximately $330,000 in commissions from Australian Holdings pursuant to its engagement, approximately $840,000 in commission from the purchaser and $1.5m from Australian Holdings to be held on trust for possible future investment.
25. So as not to compromise Marketing’s real estate licence, the director of Marketing disclosed to Australian Holdings that it had received the $840,000 commission from the purchaser of the Property.
26. Australian Holdings agreed with Marketing that the $840,000 commission should be shared in approximately equal proportions. The party with whom Marketing was to share was not clear.
27. On 5 July 2002 Marketing paid $1,497,296 from its trust account to an account of Mr B in New York. This transfer was on the instructions of Australian Holdings, allegedly to purchase a supermarket in the United States. The instruction to make this payment came from Mr X.
28. Mr X instructed Marketing to pay approximately $462,500 to Mr X. Mr X’s evidence was that he was a conduit for communications between Marketing and the principals of International Holdings. Little, if anything, turns on whether Mr X was a conduit of information or a principal decision maker. The capacity in which he received the payment was not clear on the evidence. Two cheques, one for $200,000 and the other for $262,500, were paid to Mr X on 23 July 2002.
29. On 23 July 2002 Mr X opened a term deposit account in his name with an Australian branch of a foreign bank (the Foreign Bank) denominated in Australian dollars. On the same day, Mr X deposited a $200,000 cheque drawn from Marketing into the Foreign Bank term deposit account. Also, in July 2002, Mr X deposited a further amount of AUD$262,500 by way of a cheque in another account with the Foreign Bank. In August 2006 Mr X used this money to purchase shares in Australian Holdings.

Deposits to Mr and Mrs X’s accounts by Mr B.

30. On 21 October 2002 Mr B transferred or deposited:
    • (a) USD$49,955 to an Australian bank account in the names of Mrs X and Mr X (the joint account). Mr X was the beneficiary named in the transfer;
    • (b) USD$74,973 to a different Australian bank in the name of Mr X (Mr X’s account). Again, Mr X was the beneficiary named in the transfer; and
    • (c) USD$49,973 to a third Australian bank account in the name of Mrs X (Mrs X’s account). Mrs X was the beneficiary named in the transfer.
31. On 22 October 2002:
    • (a) the joint account was credited with $89,326.97; and
    • (b) Mr X’s account was credited with $134,408.39.
32. On 28 October 2002 Mrs X’s account was credited with $89,392.14 being the amount referred to in [30(c)] above after exchange, being AUD$89,397 less an AUD$5 processing fee.
33. Following receipt of the transfers from Mr B, Mr and Mrs X began acquiring properties, alleged to be joint venture styled investments with Mr B, using the funds transferred by Mr B. The Applicants alleged that Mr B was entitled to a share in any profits made in respect of those properties.
34. Tracing the receipts of funds through the accounts to their ultimate use for property acquisitions was the subject of cross-examination scrutiny following which the proper conclusion to reach is that the pooling of funds in accounts after their receipt made tracing the received funds to their ultimate use difficult, if not impossible.
35. When asked why he gave Mr B two of his own account numbers and one of Mrs X’s account numbers, Mr X responded to the effect that he did this to keep funds separate and allow tracking of amounts received from Mr B. Mrs X’s explanation was that Mr X needed to give an account number to Mr B urgently and she and Mr X only had access to her account details at that time.
36. Mrs X’s explanation of the need for her account details to be given does not sit comfortably with two other transfers on the same day from Mr B to two of Mr X’s accounts. And Mr X’s explanation of the need for different accounts does not sit comfortably with evidence that the pooling of funds produced an inability to trace the use of received funds.
37. Mr X has been in contact with Mr B who was reluctant to give evidence in the matter because he is also under investigation by the Commissioner. Evidence was not led from Mr B.
38. There have not been any repayments of principal or payments of joint venture profits which reflect the arrangements alleged between Mr and Mrs X and Mr B.
39. On 25 November 2009 Mr and Mrs X, arranged to mortgage some land in favour of Mr B.
40. On 17 March 2010 Mr B executed a statutory declaration to the effect that he had loaned an amount of AUD$89,392 to Mr X on 28 October 2002.
41. These are the only documents provided by way of evidence that suggests any form of indebtedness to Mr B and they are not contemporaneous documents.
42. Mr X explained the absence of records and formal agreements by reference to a degree of trust that is enjoyed between members of his community and the absence of need for written documentation of agreements entered.

The undeclared 2003 year interest amounts

43. During the 2003 year, Mr X derived interest of AUD$13,704 on the funds credited to one of his Foreign Bank accounts. These amounts were not returned as assessable income. However they are now accepted as such and remain relevant to the calculation of the tax shortfall on which the shortfall penalty has been assessed.

Demonstrating that an assessment is excessive

44. The burden of proof imposed by s 14ZZK of the Administration Act^[1] requires a taxpayer to establish that his or her assessment is excessive. In this context, excessive means that the amount of the assessment exceeds what it should be.^[2] What this means is that a taxpayer must establish the claim he or she asserts.^[3] It is not enough to show that the Commissioner made an error^[4] or that an assessment may be wrong.^[5] Taxpayers must go further and show what the correct position should be,^[6] or what correction should be made to make the assessment right or more nearly right,^[7] or the amount that should be assessed for tax,^[8] or show that he or she has been assessed to a liability which the Assessment Acts^[9] do not impose.^[10]
45. There is no onus on the Commissioner under the Assessment Acts and there is no requirement that an assessment be supported by evidence.^[11] It is not necessary for the Commissioner to show that a taxpayer’s assessable income was at least a particular figure or that a particular amount is assessable. And if the Commissioner chooses to make such an assertion and fails to prove it, that failure does not bear upon whether the taxpayer has discharged the statutory burden of proving an assessment is excessive.^[12]
46. The manner in which a taxpayer’s burden might be discharged varies with the circumstances. If a dispute concerns assessability of an identified amount, then a taxpayer may show that the assessment is excessive by demonstrating that that amount is not assessable without any examination of the balance of the assessment.^[13] This might be shown by demonstrating that the amount was derived by someone else.^[14]
47. The operation of the burden of proof in the circumstances may mean that income tax assessments in relation to amounts that are not part of a person’s income may not be set aside because the person assessed has not demonstrated that the amounts are not assessable. This is a feature of a taxation system where the subject to be taxed is expected to have knowledge of personal affairs and records to show the character of monetary receipts and the like.
48. Two further principles connected to the burden of proof principles outlined above have a particular relevance in this proceeding.
    • (a) The first principle concerns self-serving evidence. The evidence of witnesses who have interests that turn on whether that evidence is accepted (typically parties to an application in the Tribunal) needs to be approached critically,^[15] and will necessarily be the subject of careful scrutiny.^[16] Similar principles ought be applied to the evidence of those who have close relationships with parties to a proceeding, such as a domestic or life partner. In Imperial Bottleshops Pty Ltd & Egerton v Federal Commissioner of Taxation,^[17] where business expenditures were said to have been incurred, Hill J expanded on the caution required and said:

A taxpayer who does not keep records of his deductible outgoings faces a very difficult task. If he goes into the witness box and swears that he has incurred the outgoings he is making a self-serving statement. That does not necessarily mean that he is not to be believed. Such a statement, like statements of purpose, or object or state of mind must, however, be "tested most closely, and received with the greatest caution": Pascoe v Federal Commissioner of Taxation (1956) 11 ATD 108 at 111. It would, of necessity, be a rare case indeed where a taxpayer, claiming to have expended a very large sum of money on trading stock and other business expenses, would succeed in satisfying the burden of proving that the assessment is excessive. Some other corroborative evidence would normally be required which makes it more probable than not that his sworn testimony is to be believed. It must, however, be borne in mind that the evidence of a taxpayer is not to be regarded as "prima facie unacceptable", cf McCormack v Federal Commissioner of Taxation [1979] HCA 18; (1978-9) 143 CLR 284 at 302 per Gibbs J.^[18]

Importantly, in Imperial Bottleshops, there was substantial corroborating evidence from two employees of a supplier to the taxpayer and six current or former employees of the taxpayer. In addition, the statement of wealth did not show unexplained accumulations of assets that were inconsistent with the taxation position asserted by the taxpayer. The corroborating evidence, together with a rational reason for an absence of records, allowed Hill J to form a view that the taxpayer should be believed.^[19]

(b) The second principle concerns the limited circumstances in which inferences can be drawn. They can be drawn from observed facts. Mere assumptions, guesswork and speculation are not accommodated in the process of arriving at conclusions.^[20] There must be a body of evidence that might reasonably sustain a relevant finding of fact or permit the Tribunal to draw an inference.^[21]

2003 YEAR ASSESSMENTS

49. In the present circumstances there is evidence that Mrs X received money in her bank account. There is also evidence that some of the money deposited in her account was used to purchase a motor vehicle and the balance was placed on fixed deposit and that, while Mrs X was the beneficiary of the transfer of the money deposited into her account, it was paid into her account at Mr X’s direction and that he subsequently directed the use of the money.
50. The explanation for the deposit is the same as that given for the 2003 year deposits to Mr X’s accounts.
51. For Mr X the evidence is clear that:
    • (a) he expected to be rewarded for his efforts and participation in the Property development if it was successful;
    • (b) he had an association with Mr B;
    • (c) the Property was transferred to Australian Holdings by Mr B;
    • (d) the Property was sold by Australian Holdings for less than it was thought to be worth because of an urgent need for $1.5m;
    • (e) Mr X’s opportunity to participate in the spoils of a successful property development was quashed as a consequence;
    • (f) $1.5m was retained from the sale proceeds for possible future investment. $1,497,296 from the sale proceeds was subsequently sent to Mr B in New York on Australian Holdings’ instructions given by Mr X;
    • (g) shortly after receipt of the money in New York, Mr B began making remittances of USD amounts to Mr and Mrs X’s Australian accounts;
    • (h) the explanations for the need for transfers to separate accounts conflict with other evidence;
    • (i) any entitlement that Mr B had to be repaid, if there were such an entitlement, was not secured by any contemporaneous document;
    • (j) the money from Mr B was used to pay for what were claimed to be joint venture properties in which Mr B would participate in any upside;
    • (k) any entitlement Mr B had to participate in profits or the sale of investment assets as alleged has not been calculated or recorded or paid to him; and
    • (l) the only evidence of Mr X and Mrs X’s use of funds that came from Mr B is that they purchased illiquid assets. Such investments are not entirely consistent with the presumption, in the absence of evidence of any written agreement, that any amounts Mr B loaned to Mr X would be repayable at call.
52. In this matter:
    • (a) there wasn’t contemporaneous documentary evidence of loan or joint venture agreements of the kind contended for by the Applicants nor was there any evidence of performance of the terms of those agreements;
    • (b) there was no contemporaneous security given and taken to protect against default;
    • (c) there were no repayments of principal;
    • (d) there is no evidence of any weight from the alleged lender, Mr B. His only evidence is a the statutory declaration sworn after the Commissioner had commenced his enquiries, and after the Commissioner had developed and issued a position paper without Mr B being willing to give evidence; and
    • (e) there is documentation of security in favour of Mr B only after the Commissioner commenced his enquiries.
53. There is insufficient evidence to demonstrate that the 2003 year amounts in dispute are not assessable. In circumstances where:
    • (a) the only supporting evidence of Mr X’s personal testimony is Mrs X’s personal testimony and a statutory declaration from Mr B which ought be afforded no weight (given that there was no opportunity to cross examine Mr B and one of the explanations given for that was his own taxation problems);
    • (b) Mr and Mrs X’s testimony needs to be received with great caution;
    • (c) there is evidence that could support an alternate thesis that the amounts Mr X received might in fact be his income or reward for his prospective participation in the successful development of the Property which was terminated to his disadvantage; and
    • (d) it can be assumed that Mr B would not be able to help Mr X’s case;

the necessary conclusion must be that Mr X has not discharged the burden required of him.

54. Mrs X’s position is somewhat similar.
55. A person can demonstrate that an amount is not assessable by demonstrating that it has been derived. Derivation by the taxpayer is a constituent element of an amount to be assessed. A person can demonstrate that an amount has not been derived if he or she can show that the amount was someone else’s money. Mrs X’s contention that the money deposited to her account was not assessable on the basis that the money was for her husband is consistent with the majority of it being paid to him after some immediate personal uses, namely, to purchase a motor vehicle. However, subsequent use of money does not directly address its provenance, and it is the provenance of the money that needs to be established in the present circumstances. Accordingly Mrs X has not discharged her burden of demonstrating that her assessments are excessive.
56. While cultural practice may partly explain why some arrangements lack formal documentation, those who do not maintain such documentation do so at their peril. In the present matters there is an absence of both documentation of the financial arrangements between Mr X and Mr B and evidence from Mr B, who is said to be reluctant to give evidence as he has his own taxation matters under review. In these circumstances the arrangements as contended by Mr X cannot be taken to be established on the evidence.

PENALTY

57. The second issue for consideration is the penalty associated with the tax shortfalls. In relation to these matters, some additional facts are relevant.
58. On various dates, as set out in Table 2 below, Mr X declared that he did not:
    • (a) earn foreign income; or
    • (b) own or have interests in property or in funds valued at AUD$50,000 or more in total and located outside Australia

in or during the years to which the declarations related.

Table 2
Date of declaration	Year to which the declaration related
31 August 2001	30 June 2000
31 January 2004	30 June 2001
31 January 2004	30 June 2002
23 July 2004	30 June 2003
15 February 2005	30 June 2004
2 August 2006	30 June 2005
25 November 2008	30 June 2006
25 November 2008	une 2007

59. On 10 October 2008 the Commissioner:

(a) advised Mr X of his intended audit for the period 1 July 1999 to 30 June 2007; and
(b) issued a notice pursuant to section 264 of the 1936 Assessment Act^[22] requiring Mr X to attend and give evidence on 27 November 2008.

60. After the 10 October 2008 communication, on 18 November 2008 Mr X’s tax agent wrote to the Commissioner in the following terms concerning the $ 462,500 receipt:

In the course of reviewing ... [Mr X’s] affairs, it came to his attention that in the year of income ended 30 June 2002, an amount of $500,000 that may have constituted assessable income to him was not included in his income tax return for that year. That arised [sic] due to that amount paid to his account, which may have been commission income on a sale of land by ...[Australian Holdings], of which Mr X was a director. Alternatively, it is possible that Mr X held the money for that company and derived income at some later time when he was enabled to keep it.
...
Although:-
(a) it does not seem entirely certain to us that that amount was assessable in that year ...

61. The Commissioner contends that the tax agent’s letter of 18 November 2008 did not save him significant time or resources in the conduct of the audit. In support of these contentions the Commissioner notes that:
    • (a) on 27 November 2008 Mr X attended an interview conducted by ATO officers;
    • (b) on 6 February 2009 the Commissioner wrote to Mr X’s tax agent requesting further information about Mr X’s affairs, and a number of further attempts were made to obtain further information from Mr X;
    • (c) on 2 April 2009 the Commissioner issued a further notice to Mr X pursuant to section 264 of the 1936 Assessment Act requiring him to provide information and produce documents to the Commissioner by 6 May 2009;
    • (d) on 6 May 2009 Mr X’s tax agent provided a response to the section 264 notice;
    • (e) on 13 October 2009 the Commissioner issued his position paper in respect of Mr X’s affairs;
    • (f) on 30 October 2009 Mrs X wrote to the Commissioner in response to his request for information of 15 September 2009;
    • (g) on 16 December 2009 the Commissioner finalised the audit in respect of Mr X’s affairs.
62. The Commissioner’s contention is borne out by the evidence to which he refers. There is no warrant for reducing penalty otherwise payable.
63. The Commissioner also contends that Mr X’s actions prevented or obstructed the Commissioner from finding out about a shortfall amount and that Mr X did not inform him of the shortfalls within a reasonable time of becoming aware of them. In support of these contentions the Commissioner notes and contends that:
    • (a) Mr X made the false declarations referred to above;
    • (b) Mr X failed to advise of the existence of all bank accounts in Australia including the account to which the omitted 2003 year interest was credited; and
    • (c) the reasonable time for disclosing the admitted $462,500 shortfall ended when Mr X deposited funds he received in personal bank accounts in 2002 or when he used the funds to purchase shares in Australian Holdings in 2006.
64. Objectively assessed, those actions meet the terms of s 284-220 of Schedule 1 to the Administration Act as then applicable.
65. Mr X has not demonstrated that a penalty on account of recklessness in making the statements in his tax returns, together with a 20 per cent uplift, is excessive. Objectively, the evidence demonstrates that it is not excessive for the 2003 year.
66. Mrs X has not demonstrated that a penalty on account of recklessness in making the statements in her tax returns is excessive. Objectively, the evidence demonstrates that it is not excessive for the 2003 year.
67. Neither Mr X nor Mrs X has demonstrated any ground for remission of penalty.

2007 YEAR

68. On or around 17 October 2006 AUD$82,223.13 was credited to one of Mr X’s foreign bank accounts. The evidence is tolerably clear that this deposit probably originated in balances held in accounts and term deposits in Mr X’s name with that bank and that he had held from a date earlier than the start of the 2007 taxation year.
69. As such it is more probable than not that if the amount was income, it was income of an earlier year and not in the 2007 year and is not assesssable for the 2007 year.
70. Consequently, penalty for the 2007 year does not arise.
71. Accordingly the objection for the 2007 year should be allowed in full.

DECISION

72. For taxpayer Mr X, the Tribunal affirms the decision of the Commissioner of Taxation in respect of the 2003 year objections.
73. For taxpayer Mr X, the Tribunal sets aside the decision of the Commissioner of Taxation in respect of the 2007 year and in lieu thereof allows the objection in full.
74. For taxpayer Mrs X, the Tribunal affirms the decision of the Commissioner of Taxation in respect of the 2003 year objections.

I certify that the preceding 74 (seventy-four) paragraphs are a true copy of the reasons for the decision herein of Mr F D O’Loughlin, Senior Member.

........................................................................
Administrative Assistant

Dated 21 December 2012

Dates of hearing	2-3 May 2012
Date final submissions received	27 August 2012
Applicants	Taxpayer Mrs X in person
Counsel for the Respondent	Mr Peter Nicholas
Advocate for the Respondent	Mr Aaron Elbourne, ATO Legal Services Branch

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^[1] Taxation Administration Act 1953 (C’th)

^[2] F. C. of T. v Dalco [1990] HCA 3; (1990) 168 CLR 614 at 621 per Brennan J with whom Mason CJ and Dawson, Gaudron and McHugh JJ agreed and 631 per Toohey J., McAndrew v F. C. of T. [1956] HCA 62; (1956) 98 CLR 263.

^[3] Trautwein v F. C. of T. [1936] HCA 77; (1936) 56 CLR 63 at 87 per Latham CJ, Moreau v F. C. of T. (1926) [1926] HCA 28; 39 CLR 65 at 70 per Isaacs J.

^[4] Trautwein above at 87 per Latham CJ, Dalco above at 621 per Brennan J with whom Mason CJ and Dawson Gaudron and McHugh JJ agreed.

^[5] Trautwein above at 112 per Dixon and Evatt JJ, Dalco above at 625 per Brennan J with whom Mason CJ and Dawson, Gaudron and McHugh JJ agreed, and at 631 and 633 per Toohey J.

^[6] Trautwein above at 87 per Latham CJ.

^[7] Trautwein above at 88 per Latham CJ.

^[8] Trautwein above at 103/4 per Starke J., Dalco above at 625 per Brennan J with whom Mason CJ and Dawson Gaudron and McHugh JJ agreed.
^[9] Income Tax Assessment Act 1997 (C’th) and Income Tax Assessment Act 1936 (C’th))

^[10] Trautwein above at 111 per Dixon and Evatt JJ., Dalco above at 624 per Brennan J with whom Mason CJ and Dawson Gaudron and McHugh JJ agreed and 626 per Deane J and 631 per Toohey J, George v F.C. of T. [1952] HCA 21; (1952) 86 CLR 183 at 201 per Dixon CJ, McTiernan, Williams, Webb and Fullagar JJ.

^[11] Gauci v F. C. of T. [1975] HCA 54; (1975) 135 CLR 81 at 89 per Mason J (in the minority but not on this point, see Dalco above per Brennan J at 624).

^[12] Vu v F. C. of T. [2006] FCA 889 at [9] per Finn J., Galea v F. C. of T. 90 ATC 5060 at 5067 per Hill J.

^[13] Dalco above at 624 per Brennan J with whom Mason CJ and Dawson Gaudron and McHugh JJ agreed.

^[14] Dalco above at 626 per Deane J.

^[15] See F. C. of T. v SNF (Australia) Pty Ltd [2011] FCAFC 74 at [81] and [82] per Ryan, Jessup and Perram JJ and their explanation of the remarks of Fullagar J in Pascoe v Federal Commissioner of Taxation (1956) 30 ALJR 402 at 403.

^[16] See Davis v F. C. of T. [2000] FCA 44; (2000) 171 ALR 654 at [47] per Hill J.

^[17] 91 ATC 4546.

^[18] At 4552.

^[19] Imperial Bottleshops above at 4554-4555.

^[20] See Tisdall v Webber [2011] FCAFC 76 at [128] per Buchanan J, with whom Tracey J agreed.

^[21] See Tisdall, above, at [127] per Buchanan J, with whom Tracey J agreed.

^[22] Income Tax Assessment Act 1936 (C’th)