1. This matter concerns amended income tax assessments issued to the Applicant by the Commissioner of Taxation (Commissioner) for the 2011 to 2015 financial years (Relevant Years).
2. The Commissioner was not satisfied with the income tax returns (ITRs) filed by the Applicant for the Relevant Years. The Commissioner submits that certain income was not declared by the Applicant in those ITRs.
3. The Applicant's ITRs were lodged on the following dates:[1]

The Commissioner provided the following summary of the Applicant's lodged ITRs:[2]

As part of an audit into the Applicant's income tax affairs for the Relevant Years, the Applicant was interviewed by authorised officers of the Australian Taxation Office (ATO) in October 2017 in accordance with a compulsory notice issued under section 353-10(1) of Schedule 1 of the TAA (Audit).[3] The Applicant instructed Mr O, a tax agent from a company the Tribunal will refer to as ASJR to file a response to the ATO's Audit Position Paper on 30 May 2018.[4]

1. The Commissioner examined the Applicant's bank accounts and credit card accounts and determined through an analysis of the transactions that there were unexplained cash deposits made into the Applicant's accounts. These deposits had not been included as part of the Applicant's assessable income in the lodged ITRs.
2. The Commissioner's position is that during the Relevant Years there were 99 unexplained deposits totalling $765,461 from unknown sources into the Applicant's bank accounts. Without a satisfactory explanation of the source and characterisation of the deposits, the Commissioner has treated those amounts as income.
3. The Commissioner has provided the following summary of the unexplained deposits in issue (Relevant Deposits):[5]

1. For the purpose of the hearing the Relevant Deposits were individually identified and numbered in Appendix A to the Commissioner's closing submissions.[6]
2. Following the Audit the Commissioner formed the view that there had been evasion.[7] As a result, the Commissioner says he was entitled to amend the Applicant's ITRs at any time pursuant to item 5 in the table in section 170(1) of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936).
3. Following the Audit, on 16 August 2018, the Commissioner issued amended notices of assessment (Amended NOA) for the Relevant Years pursuant to section 167 of the ITAA 1936.[8]
4. In each of the Relevant Years the Commissioner added to the amounts of income the Applicant had reported in his ITRs in the Relevant Years.
5. Administrative penalties were imposed on the shortfall amounts under section 284-75(1) of Schedule 1 of the Taxation Administration Act 1953 (Cth) (TAA) at the base rate of 75% for the Relevant Years (Penalty Assessments) on the ground that the Applicant's agent made a false or misleading statement resulting in a shortfall amount.[9] The base penalty amount was then increased by 20% for the 2012 to 2015 income years under section 284-220(1)(c) of Schedule 1 to the TAA.
6. The Commissioner concluded that the base penalty amount should be uplifted by 20% in each of the 2012 to 2015 income years pursuant to section 284-220(1)(c) of Schedule 1 of the TAA by reason that in each of those income years the Applicant would have previously had a base penalty amount under item 1 (intentional disregard) of section 284-90(1) of Schedule 1 of the TAA.

The table below summarises the income tax adjustments, penalties and shortfall interest charge imposed by the Commissioner following the Audit:[11]

1. On 17 May 2020 and 25 June 2020, the Applicant lodged objections to the Amended NOAs, Penalty Assessments, and SICs.[12]
2. On 27 November 2020, the Commissioner made his decision on the objections. The Commissioner disallowed the Applicant's objections in full (Objection Decision).[13]
3. In relation to the objections against the Penalty Assessments, the Commissioner (Penalty Decision):[14]

(a) refused to exercise his discretion under section 298-20 of Schedule 1 of the TAA to remit any part of the tax shortfall penalty imposed and refused to exercise his discretion to remit any part of the SIC under Division 280 of Schedule 1 to the TAA; > > (b) allowed the objection in part in relation to the penalty for the failure to lodge on time. The Commissioner remitted the penalty for the 2013 and 2014 years to nil given that the Applicant had been recovering from a serious accident. On 16 November 2013 the Applicant was involved in an incident whereby he was struck by a car. He sustained significant injuries including a shattered L2, fractured L3 vertebrae, damage to his shoulder, right knee, and left foot (Accident). As a result of his injuries the Applicant was unable to continue working in the construction industry.

4. On 19 May 2021 the Applicant filed an application for a review in the Tribunal of the Objection Decisions and Penalty Decisions and SIC Decisions.[15]

1. The Applicant has contended that the Relevant Deposits are not assessable income but rather can be characterised as follows:

(a) loan arrangements between himself and his wife; > > (b) cash reimbursements from friends and family members for personal expenses incurred by the Applicant on their behalf (including for flights, accommodation, and use of sport stadium corporate boxes); > > (c) cash proceeds from the sale of three motor vehicles and three jet skis; > > (d) cash proceeds from the sale of a house; > > (e) a cash loan for the re-mortgaging of a property; and > > (f) rental income.

2. The Commissioner has not accepted the Applicant's contentions because he says, among other things:[16]

(a) there is a lack of corroborating evidence; > > (b) there is no supporting evidence of the purported loans; and > > (c) during the Relevant Years the Applicant's wife was not working and therefore the source of funds purportedly loaned by her to the Applicant is unexplained.

3. To overcome the Commissioner's assessments, the Applicant must establish on the balance of probabilities that the deposits in question are not properly classified as income, and therefore not assessable.

1. For the reasons set out below, the Tribunal finds that the Applicant has failed to demonstrate what his actual income was during the Relevant Years and that the Amended NOAs were excessive.
2. Due to a lack of contemporaneous records the Applicant's case rested on the Tribunal's acceptance of his and the other witnesses' oral evidence. The Tribunal found the Applicant and some of lay witnesses' evidence to be unreliable, implausible, and inconsistent. The evidence overall lacked the requisite specificity and at times was speculative. It was not sufficiently persuasive. For reasons also outlined below the accountants' evidence was unable to be given any significant weight.
3. The Tribunal finds that the Applicant has not adequately identified the source of the Relevant Deposits and that he has not discharged his burden of proving those amounts do not constitute assessable income.

1. It is not in dispute that the Tribunal has jurisdiction to review the Decisions pursuant to section 25 of the Administrative Appeals Tribunal Act 1975 (Cth) and Part IVC of the TAA.[17]
2. The issue for determination by the Tribunal is whether the Applicant has discharged the burden of proof that the Amended NOA assessment issued in the Relevant Years were excessive and by showing what the taxable income should be. These questions involve a consideration of whether the Applicant engaged in conduct amounting to evasion for the purposes of section 170(1) (Table, item 5) of the ITAA 1936 in respect of the Relevant Years.
3. The Tribunal also has to consider:

(a) whether the administrative penalty for the 2011, 2012 and 2015 income years was incorrectly imposed for failure to lodge under section 286-75(1) of Schedule 1 to the TAA, and if so, whether the penalty should be remitted. > > (b) whether there is a shortfall amount for the purpose of section 284-80(1) of Schedule 1 of the TAA for any of the Relevant Years; > > (c) whether, if there is a shortfall amount in any of the Relevant Years, the Applicant is liable to an administrative penalty under section 284-75(1) of Schedule 1 of the TAA. This involves a consideration of: > > > (i) whether section 284-215 of Schedule 1 of the TAA applies to reduce the shortfall amount; > > (d) whether section 284-76(6) of Schedule 1 of the TAA applies in each of the 2012 to 2015 income years in which there was a shortfall amount with the result that the Applicant is not liable to an administrative penalty; > > (e) what is the base penalty amount worked out in accordance with section 284-90(1) of Schedule 1 of the TAA; > > (f) whether the base penalty amount should be increased by 20% for any of the 2012 to 2015 income years pursuant to section 284-220 of Schedule 1 of the TAA; and > > (g) whether all or part of the administrative penalties should be remitted pursuant to section 298-20 of Schedule 1 of the TAA; and > > (h) if there is a shortfall amount in any of the Relevant Years, should the SIC for the 2011 to 2013 years be remitted in whole, or in part, pursuant to section 280-160 of Schedule 1 of the TAA.

1. Assessable income, as defined in Division 995 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997), has the meaning given by sections 6-5, 6-10, 6-15, 17-10 and 17-30 of the ITAA 1997.
2. Section 6-5 of the ITAA 1997 provides:

6-5 Income according to ordinary concepts (ordinary income) > > (1) Your assessable income includes income according to ordinary concepts, which is called ordinary income. > > Note: Some of the provisions about assessable income listed in section 10 5 may affect the treatment of ordinary income. > > (2) If you are an Australian resident, your assessable income includes the *ordinary income you *derived directly or indirectly from all sources, whether in or out of Australia, during the income year. > > (3) If you are a foreign resident, your assessable income includes: > > (a) the *ordinary income you *derived directly or indirectly from all *Australian sources during the income year; and > > (b) other *ordinary income that a provision includes in your assessable income for the income year on some basis other than having an *Australian source. > > (4) In working out whether you have derived an amount of *ordinary income, and (if so) when you derived it, you are taken to have received the amount as soon as it is applied or dealt with in any way on your behalf or as you direct. > > (emphasis added)

6-10 Other assessable income (statutory income) > > (1) Your assessable income also includes some amounts that are not *ordinary income. > > Note: These are included by provisions about assessable income. For a summary list of these provisions, see section 10 5. > > (2) Amounts that are not *ordinary income, but are included in your assessable income by provisions about assessable income, are called statutory income. > > Note 1: Although an amount is statutory income because it has been included in assessable income under a provision of this Act, it may be made exempt income or non-assessable non-exempt income under another provision: see sections 6 20 and 6 23. > > Note 2: Many provisions in the summary list in section 10 5 contain rules about ordinary income. These rules do not change its character as ordinary income. > > (3) If an amount would be *statutory income apart from the fact that you have not received it, it becomes statutory income as soon as it is applied or dealt with in any way on your behalf or as you direct. > > (4) If you are an Australian resident, your assessable income includes your *statutory income from all sources, whether in or out of Australia. > > (5) If you are a foreign resident, your assessable income includes: > > (a) your *statutory income from all *Australian sources; and > > (b) other *statutory income that a provision includes in your assessable income on some basis other than having an *Australian source.

1. What is meant by income according to ordinary concepts was discussed in this Tribunal's decision in WYVW and Commissioner of Taxation (Taxation) [2023] AATA 4242 as follows (emphasis added):[18]

79. Section 6-5 provides "ordinary income", which is income according to ordinary concepts, forms part of a person's assessable income. > > 80. "Ordinary income" includes things like wages, salaries, commissions, and other payments made for services rendered, from personal exertion. > > 81. The concept has been discussed in numerous cases. > > 82. In Scott the High Court referred to the assessment of whether an amount constituted income depended upon the nature of the transaction. Windeyer J said:[19] > > [22] "Whether or not a particular receipt is income depends upon its quality in the hands of the recipient. It does not depend upon whether it was a payment or provision that the payer or provider was lawfully obliged to make. The ordinary illustrations of this are gratuities regularly received as an incident of a particular employment. On the other hand, gifts of an exceptional kind, not such as are a common incident of a man's calling or occupation, do not ordinarily form part of his income." > > 83. In The Commission of Taxation of the Commonwealth of Australia v Harris, G.O [1980] FCA 74; 30 ALR 10, the Full Federal Court stated: > > "It is clear that the whole of the circumstances must be considered... > > Whether or not a particular receipt is income depends upon its quality in the hands of the recipient ... > > The regularity and periodicity of the payment will be a relevant though generally not decisive consideration ... > > A generally decisive consideration is whether the receipt is the product in a real sense of any employment of, or services rendered by the recipient, or of any business, or, indeed, any revenue producing activity carried on by him ..." > > (citations omitted) > > 84. To determine whether an amount has the character of income, the Full Federal Court in Richard Walter Pty Ltd v Commissioner of Taxation ; held that: > > > >

1. Section 6-15 of the ITAA 1997 sets out what is not assessable income:

6-15 What is not assessable income > > (1) If an amount is not *ordinary income, and is not *statutory income, it is not assessable income (so you do not have to pay income tax on it). > > (2) If an amount is *exempt income, it is not assessable income. > > Note: If an amount is exempt income, there are other consequences besides it being exempt from income tax. For example: > > • the amount may be taken into account in working out the amount of a tax loss (see section 36-10); > > • you cannot deduct as a general deduction a loss or outgoing incurred in deriving the amount (see Division 8); > > • capital gains and losses on assets used solely to produce exempt income are disregarded (see section 118-12). > > (3) If an amount is *non-assessable non-exempt income, it is not assessable income. > > Note 1: You cannot deduct as a general deduction a loss or outgoing incurred in deriving an amount of non-assessable non-exempt income (see Division 8). > > Note 2: Capital gains and losses on assets used to produce some types of non-assessable non-exempt income are disregarded (see section 118-12).

1. Pursuant to section 166 of the ITAA 1936 the Commissioner must make an assessment of the taxable income of a person, the tax payable thereon, and any tax offset refunds, from ITRs and/or from any other information in the Commissioner's possession.
2. Section 167 of the ITAA 1936 provides that the Commissioner may issue a default assessment of the amount upon which income tax ought to be levied, and that amount shall be the taxable income of that person for the purpose of section 166 in the following circumstances:

(a) where a person makes default in furnishing a return; > > (b) where the Commissioner is not satisfied with the return furnished by any person; or > > (c) where the Commissioner has reason to believe that any person who has not furnished a return has derived taxable income.

1. Practice Statement Law Administration PS LA 2007/24 Making default assessments: section 167 of the Income Tax Assessment Act 1936 (PS LA 2007/24) outlines the Commissioner's practice regarding the authority to issue assessments under section 167 of ITAA 1936.
2. It provides that the Commissioner must make a genuine attempt to determine a taxpayer's assessable income but he is not bound to using a particular methodology to do so.[20]
3. In circumstances such as here where there allegedly "unexplained" deposits, PS LA 2007/24 provides an example of the approach to be taken by the Commissioner:

12. Examples > > Example 1 - unexplained deposits > > A taxpayer who has not lodged any income tax returns has used funds sourced from a series of significant cash bank deposits over several years to pay for living expenses for himself and his family. The taxpayer has provided several unsatisfactory explanations for these deposits. A default assessment under section 167 is made for the amounts of unexplained deposits in each year as taxable income. The assessment does not include any allowable deductions based on the insufficient evidence concerning the source of the funds. > > (emphasis added)

1. Section 175A of the ITAA 1936 sets out when a taxpayer can object to an assessment. It provides relevantly:

175A Objections against assessments > > (1) A taxpayer who is dissatisfied with an assessment made in relation to the taxpayer may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953.

1. In relation to the primary tax assessment, section 14ZZK(b)(i) of the TAA provides that the Applicant has the burden of proving that the assessment is excessive or otherwise incorrect and what the assessment should have been. The reason for this, as was explained by Logan J in Anglo American Investments Pty Ltd (Trustee) v Commissioner of Taxation [2022] FCA 971 (Anglo American) at [115], is that "the Commissioner, unlike a participant, is a stranger to transactions forming the taxable facts".
2. In relation to the penalty and SIC remission, section 14ZZK(b)(ii) of the TAA provides the Applicant has the burden of proving those decisions should not have been made or should have been made differently.
3. The standard of proof a taxpayer must meet is the civil standard of the balance of probabilities,[21] not the criminal standard of beyond a reasonable doubt. In the recent decision of Lehrmann v Network Ten Pty Limited [2024] FCA 369 (Lehrmann), Lee J stated the following considerations may be relevant to take into account when assessing whether the burden of proof has been met:

[97]...the inherent likelihood of the occurrence of the fact alleged and the notion that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and the other to have contradicted: Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63 (at 65 per Lord Mansfield).

Lee J explained in Lehrmann that the concept of the balance of probabilities "is often misunderstood". He stated:

[98]... It does not mean a simple estimate of probabilities; it requires a subjective belief in a state of facts on the part of the tribunal of fact. A party bearing the onus will not succeed unless the whole of the evidence establishes a "reasonable satisfaction" on the preponderance of probabilities such as to sustain the relevant issue: Axon v Axon [1937] HCA 80; (1937) 59 CLR 395 (at 403 per Dixon J). The "facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied": Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 (at 305 per Dixon CJ). Put another way, as Sir Owen Dixon explained in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 (at 361), when the law requires proof of any fact, the tribunal of fact must feel an actual persuasion of its occurrence or existence before it can be found. > > ... > > [100] ...a "[m]ere mechanical comparison of probabilities independent of a reasonable satisfaction will not justify a finding of fact": NOM v DPP [2012] VSCA 198; (2012) 38 VR 618 (at 655 [124] per Redlich and Harper JJA and Curtain AJA); Brown v New South Wales Trustee and Guardian [2012] NSWCA 431; (2012) 10 ASTLR 164 (at 176 [51] per Campbell JA, Bergin CJ in Eq and Sackville AJA agreeing). > > (emphasis added)

As will be outlined later in this decision, the lay evidence was largely based on witnesses' purported recollections of events and transactions which were said to have occurred ten to fourteen years ago. In Lehrmann Lee J referred to the decision in Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) (Gestmin) where Leggatt J discussed how to approach fact finding based on recollection. Leggatt J said:

Evidence based on recollection > > 15. An obvious difficulty which affects allegations and oral evidence based on recollection of events which occurred several years ago is the unreliability of human memory. > > 16. While everyone knows that memory is fallible, I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of eyewitness testimony. One of the most important lessons of such research is that in everyday life we are not aware of the extent to which our own and other people's memories are unreliable and believe our memories to be more faithful than they are. Two common (and related) errors are to suppose: (1) that the stronger and more vivid is our feeling or experience of recollection, the more likely the recollection is to be accurate; and (2) that the more confident another person is in their recollection, the more likely their recollection is to be accurate. > > 17. Underlying both these errors is a faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time. In fact, psychological research has demonstrated that memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is true even of so-called 'flashbulb' memories, that is memories of experiencing or learning of a particularly shocking or traumatic event. (The very description 'flashbulb' memory is in fact misleading, reflecting as it does the misconception that memory operates like a camera or other device that makes a fixed record of an experience.) External information can intrude into a witness's memory, as can his or her own thoughts and beliefs, and both can cause dramatic changes in recollection. Events can come to be recalled as memories which did not happen at all or which happened to someone else (referred to in the literature as a failure of source memory). > > 18. Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time. > > > > > > > > > > (emphasis added)

The above citation was referred to by Lee J in Lehrmann (at [122]). Lee J said, with this in mind:

[125] The helpful working hypothesis of paying close regard to the contemporaneous documents and representations to disinterested third parties is of signal importance, especially where, as I will explain, I have misgivings as to the reliability of aspects of the accounts given by a number of important witnesses. > > (emphasis added)

Lee J also referred to the High Court decision in GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32; 97 ALJR 857 (GLJ) where (at 874-875 [57]) Kiefel CJ, Gageler and Jagot JJ observed:

...[the Evidence Act reflects] the position of the common law that the gravity of the fact sought to be proved is relevant to "the degree of persuasion of the mind according to the balance of probabilities". By this approach, the common law, in accepting but one standard of proof in civil cases (the balance of probabilities), ensures that "the degree of satisfaction for which the civil standard of proof calls may vary according to the gravity of the fact to be proved".[22] > > (some citations removed; emphasis added)

In Condon v Commissioner of Taxation [2023] FCA 561 (Condon),Derrington J (at [57]) acknowledged that how the burden of proof is met is not stipulated and "will no doubt vary with the circumstances of each case". 9. In Trautwein v Federal Commissioner of Taxation [1936] HCA 77; 56 CLR 63 (Trautwein) Latham CJ found (at 88) that, as a general rule in taxation matters such as this one:

...the taxpayer must... show, not only negatively that the assessment is wrong, but also positively what correction should be made in order to make it right or more nearly right.

10. In Guardian Ait Pty Ltd ATF Australian Investment Trust v Commissioner of Taxation [2021] FCA 1619; 114 ATR 136 Logan J referred to the obligation on an applicant in taxation appeals noting that the standard of proof does not require proof of facts to demonstration.[23]
11. The High Court in Federal Commissioner of Taxation v Dalco [1990] HCA 3; 168 CLR 614 (Dalco) explained that where, as in this matter, the Commissioner and taxpayer have not agreed on the assessment:[24]

... the Commissioner is entitled to rely upon any deficiency in proof of the excessiveness of the amount assessed to uphold the assessment ... unless the [taxpayer] shows by evidence that the assessment is incorrect, [the default assessment] will prevail.

12. The approach in Dalco has become known as the "all or nothing" approach.[25]
13. It is important to note that in these matters the Commissioner is under no obligation to tender evidence in support of its assessments; Mason J explained this in Gauci v Federal Commissioner of Taxation [1975] HCA 54; 135 CLR 81 at 89:

The Act does not place any onus on the Commissioner to show that the assessments were correctly made. Nor is there any statutory requirement that the assessments should be sustained or supported by evidence.

1. The Applicant in this matter does not have complete records of the source of the Relevant Deposits. In Imperial Bottleshops Pty Ltd and William John King Egerton v Commissioner of Taxation [1991] FCA 352, Hill J pointed out the difficulties a taxpayer has when they do not have substantiating records but also noted:

[31] ...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.

2. In Bosanac v Commissioner of Taxation [2018] FCA 946 Steward J highlighted the difficulty a taxpayer will have in demonstrating excessiveness without records, or a reconstruction of those records. His Honour said:[26]

[9] The onus is on the taxpayer to prove on the balance of probabilities the extent to which an impugned assessment is excessive. Where a taxpayer fails to retain records which evidence the course of a business, or fails to create such documents, he or she may well face a great difficulty in demonstrating excessiveness. This was the very problem which the applicant faced here.

3. In Condon (at [58]), Derrington J reiterated that it is not a legal requirement for the taxpayer to prove matters only by reference to contemporaneous records.
4. Derrington J also referred to Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1; 44 ALR 607 (Allied Pastoral Holdings) where Hunt J (as his Honour then was) considered (at 615) that:

... it is not obligatory for a taxpayer, before he can discharge his burden of proof, to call all the material witnesses and to produce all the material documents which support his evidence ... It is certainly wiser for the taxpayer to do so in most cases so as to ensure that his own evidence is accepted, but even where he does not do so the tribunal of fact may nevertheless be sufficiently impressed with the taxpayer as a witness that his evidence is accepted without such corroboration or without the whole of such corroboration. > > (emphasis added)

5. Derrington J then addressed the extent to which a taxpayer's own evidence can be relied upon and the necessary precision in satisfying the civil standard of proof:

[59] Although a decision-maker will, in the evaluation of the evidence, be cautious of a taxpayer's self-serving statements, they are not "prima facie unacceptable": McCormack v Federal Commissioner of Taxation at 302: and the arbiter of fact is entitled to accept them where the taxpayer is regarded as truthful. Moreover, the taxpayer is not required to corroborate each piece of evidence that is adduced before it can be accepted: Cassaniti at 409 [88]. > > [60] Mathematical precision is not required in order to prove on the balance of probabilities what the correct assessment should have been. The Court is entitled to decide the appeal by reference to estimates upon inexact evidence: Allard v Commissioner of Taxation (1992) 24 ATR 493 at 499 per Hill J. This approach was adopted by Burchett J in Ma at 233 in relation to an assessment based on the asset betterment method. His Honour said: > > Futhermore, the making of estimates upon inexact evidence, which is so much a feature of both judicial and administrative decision-making, cannot be uniquely excluded from appeals against betterment assessments. To refuse to consider the credit, not only of the Applicant, but also of his independent and unchallenged witnesses, simply because the effect of the evidence was to support his accountant's generalisations about double-counting rather than to hit upon a precise figure, was to fall into an error of law. > > ... > > [72] ... general evidence of a person's financial dealings may be sufficient for the taxpayer to succeed in an appeal of an Objection Decision. > > (emphasis added)

6. In Commissioner of Taxation v Cassaniti [2018] FCAFC 212; 266 FCR 385 (Cassaniti) the Full Federal Court considered the issue of burden of proof and how a court or Tribunal should determine whether that burden of proof has been discharged. Steward J set out five propositions which he derived from Allied Pastoral Holdings:

[88] ... > > (1) first, where the onus is on the taxpayer (whether pursuant to s 14ZZO of the TAA or otherwise) the degree or standard of proof required is that which ordinarily applies in civil proceedings. The direction given to a jury in civil cases aptly describes that onus by reference to a pair of scales and to the arguments of each party being placed at each end. As Hunt J said in Allied Pastoral: > > ...if the plaintiff succeeds... in weighing down those scales ever so slightly in his favour then he has discharged the burden he carries... > > (2) secondly, for that purpose it is not obligatory for a taxpayer, in order to discharge his burden of proof, to call all material witnesses and to produce all material documents which support her or his or its position; > > (3) fourthly, there is no requirement that evidence can only be accepted as admissible and probative if it is corroborated; > > (4) fifthly, the tribunal of fact is free to accept the evidence of the taxpayer alone if it finds the taxpayer to be truthful; > > (5) finally, it would usually be prudent to corroborate the evidence of a taxpayer. It is also prudent to adduce contemporaneous objective evidence. But prudence should not be confused with the requirements of the law.

7. Even if there are no records available, the evidence provided orally still must be scrutinised: Cassaniti, at [88].
8. The High Court in GLJ noted cases often need to be decided on incomplete evidence. Despite this, the High Court pointed out:

[60] A court is not bound to accept uncontradicted evidence. Uncontradicted evidence may not be accepted for any number of reasons including its inherent implausibility, its objective unlikelihood given other evidence, or the trier of fact simply not reaching the state of "actual persuasion" which is required before a fact may be found. "To satisfy an onus of proof on the balance of probabilities is not simply a matter of asking whether the evidence supporting that conclusion has greater weight than any opposing evidence ... It is perfectly possible for there to be a scrap of evidence that favours one contention, and no countervailing evidence, but for the judge to not regard the scrap of evidence as enough to persuade him or her that the contention is correct." The evidence must "give rise to a reasonable and definite inference" to enable a factual finding to be made; mere conjecture based on "conflicting inferences of equal degrees of probability" is insufficient. As Dixon CJ said in Jones v Dunkel, the law: > > does not authorise a court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another or the others. The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied. > > (citations removed; emphasis added)

9. Traditionally a loan agreement is set out in a legal written document which specifies terms and conditions such as repayment amounts, the time and regularity of repayments, whether any interest is payable and so on.
10. In relation to contracts formed orally, Hammerschlag J said, in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94]- [96]:

... the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences ... > > ... > > [The plaintiff] has the onus of establishing the agreement for which it contends. This entails proving to the reasonable satisfaction of the Court that the words said to give rise to the agreement were actually said, and that the alleged consensus was capable of forming a binding agreement and was intended by the parties to be legally binding. > > (emphasis added)

11. There needs to be some objective indicia that a loan exists - such as confirmation of the period of the loan, what interest is payable and some kind of documentation in the form of an agreement or similar to validate the loan. For example, if there are no formal documents, one would expect email or text exchanges may have occurred between the parties, particularly parties that had known one another for some time.
12. Each case ultimately turns on its facts. As noted by the Full Federal Court in Allied Mills Industries Pty Ltd v Commissioner of Taxation [1989] FCA 135; 20 FCR 288, where a payment is made pursuant to an agreement, the whole circumstances surrounding the agreement must be examined.[27]
13. Whether, on the objective facts, a loan arrangement is inherently probable, is a matter that should be emphasised in circumstances where there is undocumented oral evidence.[28] It is also reasonable to take into account what a party stands to win or lose.[29]

5-10 When shortfall interest charge is payable > > An amount of *shortfall interest charge that you are liable to pay is due and payable 21 days after the day on which the Commissioner gives you notice of the charge. > > Note: Shortfall interest charge is imposed if the Commissioner amends an assessment and the amended assessment results in an increase in some tax payable. For provisions about liability for shortfall interest charge, see Division 280 in Schedule 1 to the Taxation Administration Act 1953.

2. Division 280 of Schedule 1 of the TAA sets out how the SIC is calculated and imposed. Section 280-100 provides:

280-100 Liability to shortfall interest charge-income tax > > (1) You are liable to pay *shortfall interest charge on an additional amount of income tax that you are liable to pay because the Commissioner amends your assessment for an income year. > > (2) The liability is for each day in the period: > > (a) beginning at the start of the day on which income tax under your first assessment for that income year was due to be paid, or would have been due to be paid if there had been any; and > > (b) ending at the end of the day before the day on which the Commissioner gave you notice of the amended assessment. > > (3) However, if an amended assessment reinstates all or part of a liability in relation to a particular that had been reduced by an earlier amended assessment, the period for the reinstated liability begins at the start of the day on which income tax under the earlier amended assessment was due to be paid, or would have been due to be paid if there had been any.

3. The Commissioner may also remit all or part of a shortfall interest charge as follows:

280-160 Remitting shortfall interest charge > > (1) The Commissioner may remit all or a part of an amount of *shortfall interest charge you are liable to pay if the Commissioner considers it fair and reasonable to do so. > > (2) Without limiting subsection (1), in deciding whether to remit, the Commissioner must have regard to: > > (a) the principle that remission should not occur just because the benefit you received from the temporary use of the shortfall amount is less than the *shortfall interest charge; and > > (b) the principle that remission should occur where the circumstances justify the Commonwealth bearing part or all of the cost of delayed payments.

1. Administrative penalties can be imposed in the following circumstances pursuant to section 284-75 of Schedule 1 to the TAA:

284-75 Liability to penalty > > (1) You are liable to an administrative penalty if: > > (a) you make a statement to the Commissioner or to an entity that is exercising powers or performing functions under a *taxation law (other than the *Excise Acts); and > > (b) the statement is false or misleading in a material particular, whether because of things in it or omitted from it. > > Note: This section applies to a statement made by your agent as if it had been made by you: see section 284-25. > > ... > > (3) You are liable to an administrative penalty if: > > (a) you fail to give a return, notice or other document to the Commissioner by the day it is required to be given; and > > (b) that document is necessary for the Commissioner to determine a *tax-related liability (other than one arising under the *Excise Acts) of yours accurately; and > > (c) the Commissioner determines the tax-related liability without the assistance of that document.

2. Penalties are considered further below in paragraphs from paragraph ‎574.

1. Pursuant to section 170(1) (item 5) of the ITAA 1936 the Commissioner may amend an assessment at any time if he or she is of the opinion there has been fraud or evasion. Where there is no fraud or evasion, generally the Commissioner may only amend an assessment of an individual for a year of income within two years after the day on which the Commissioner gives notice of the assessment to the individual (section 170(1), item 1) or four years (section 170(1), item 4).

1. Evasion is an intentional or deliberate act to conceal or withhold income from the ITR.
2. The High Court in Denver Chemical Manufacturing Co v Commissioner of Taxation (NSW) [1949] HCA 25; 79 CLR 296 described "evasion" as meaning "more than avoid and also more than a mere withholding of information or the mere furnishing of misleading information". Dixon J said (at 313):

It is probably safe to say that some blameworthy act or omission on the part of the taxpayer or those for whom he is responsible, is contemplated. An intention to withhold information lest the commissioner should consider the taxpayer liable to a greater extent than the taxpayer is prepared to concede, is conduct which if the result is to avoid tax would justify finding evasion. > > In the present case the Board concluded that the appellant intentionally omitted the income from the return and that there was no credible explanation before them why he did so. They thought that the conduct of the taxpayer answered the description of an avoidance of tax by evasion. > > (emphasis added)

3. In Wilson v Chambers & Co Pty Ltd [1926] HCA 15; 38 CLR 131 Knox CJ (at 136):

The distinction in meaning between the words "evade" and "avoid" is well established, and a charge of evading payment is not made out by evidence which proves no more than that the person charged failed or omitted to pay an amount payable by him.

4. Whether there has been evasion is to be assessed objectively.

1. All witnesses provided witness statements in addition to their oral evidence. The following witnesses gave evidence on behalf of the Applicant (in the following order):

Statement dated 23 August 2022;[30] Supplementary statement dated 25 May 2023;[31] Further supplementary statement dated 1 March 2024.[32]

Statement dated 23 August 2022;[33] Supplementary statement dated 1 April 2023.[34]

Statement dated 22 August 2022;[35] Supplementary statement dated 12 February 2024.[36]

Statement dated 24 August 2022;[41] Supplementary statement dated 14 February 2024.[42]

Statement dated 29 March 2023;[44] Supplementary statement dated 13 February 2024.[45]

Statement dated 30 January 2023 as amended at the hearing.[46]

Applicant's accountant and tax agent, engaged in 2019

Statement dated 23 August 2022;[49] Supplementary statement dated 6 April 2023;[50] Further supplementary statement dated 13 February 2024.[51]

1. The Applicant submits the Amended NOAs for the Relevant Years are excessive on the grounds that the Deposits:[53]

(a) are not ordinary income of the Applicant pursuant to section 6-5 of the ITAA 1997 and therefore are not assessable; > > (b) are reimbursements from friends and family for personal expenses (attendances at Etihad Stadium and Melbourne Cricket Ground Boxes, airline tickets and travel related expenses and other personal expenses) incurred by the Applicant on their behalf; > > (c) further or alternatively, the amount of $10,250 deposited into the NAB Gold Banking - Choice account on 27 July 2010 was a loan to his company (Company) for the refinance of property held by Company; and > > (d) further or alternatively, the other deposits to the Applicant's bank accounts are transfers from other accounts and/or loans from the Applicant's bank accounts.

2. The Applicant contends the Deposits are sourced from funds from the following categories:[54]

(a) Money received from the sale of the Applicant's wife small business in or around late 2011 for $90,000 (Business Sale); > > (b) Etihad Stadium Box cash reimbursements from friends and family for the use of the Etihad Box (Etihad Box); > > (c) Melbourne Cricket Ground Box cash reimbursements from friends and family for the use of the MCG Box (MCG Box); > > (d) Reimbursements from friends for the purchase of flights (domestic and international) and other travel expenses incurred by the Applicant on their behalf (Travel Expenditure); > > (e) Other items purchased for friends and family using the Applicant's credit cards (Other Purchases); > > (f) Sale of motor vehicles and jet skis (Motor Vehicles and Jet Skis): > > > (i) The Applicant states that during the Relevant Years he sold three cars and three jet skis as follows:

(ii) The Applicant provided copies of invoices indicating the price he originally paid for the jet skis.[55] No records of motor vehicle purchases or ownership were produced.

(g) Sale of a property (Property Sale);

(h) Loan for the purpose of a mortgage facility (Mortgage Facility); and

(i) Rental income earned during the 2011 income year.

(a) stores the cash reimbursements in his safe which is located at his home; and > > (b) used the cash reimbursements received in or around the Relevant Years to pay off his credit card balance at the end of each month.

1. The Applicant provided the following documents in support of his claims:

(a) Australian Securities and Investment Commission business searches;[56] > > (b) bank account balance summaries and bank statements;[57] > > (c) a loan agreement between the Company and the Applicant;[58] > > (d) credit card transaction statements in relation to the ANZ credit cards #2547, #6341 and #4893;[59] > > (e) a police report and medical report from the Accident;[60] > > (f) some invoices and receipts for Etihad Box and MCG Box expenses, as well as the purchase of the Jet Skis;[61] > > (g) some flight itineraries and emails;[62] > > (h) copies of the Applicant's ITRs, assessments and rejections as well as the record of interview with the ATO and the Audit Position Paper Response in May 2018;[63] > > (i) documents relating to the Property Sale, including the contract of sale;[64] > > (j) financial statements of the Company between 2011 and 2015;[65] > > (k) a Deed of Licence for the Etihad Box.[66]

(a) the evidence of twelve lay witnesses was sufficient to satisfy the Tribunal on the balance of probabilities that the Amended NOAs are excessive; > > (b) the Tribunal can reasonably draw inferences from the evidence given by the lay witnesses that: > > > (i) there were other people who attended the corporate boxes; > > > > (ii) the Applicant purchased flights and accommodation for many people during the Relevant Period and was repaid in cash for the purchases he made on their behalf; > > (c) it is reasonable, given the passage of time that witnesses could not recall the exact dates or the exact amounts of the transactions with the Applicant; > > (d) the witnesses were honest and credible; and > > (e) the evidence of the lay witnesses should be accepted.

1. The Commissioner contends, among other things, that the Applicant has not discharged his burden of proof because the supporting/corroborating evidence relied on by the Applicant regarding the nature and source of the explained deposits is self-serving evidence from friends and family and should not be accepted.[68]
2. The Commissioner submitted that:[69]

123. ...the Applicant's evidence should be approached with great caution. This is consistent with CDPV Pty Ltd v CSR [2016] VSC 322 (CDPV), 'self-serving, non-contemporaneous statements made by taxpayers must be treated with caution - especially statements that are "general, vague and lack[ing] detail required" to prove the facts in issue

3. The Commissioner divides the lay witnesses into two groups:[70]

(a) the first group consists of (Group 1 Witnesses): > > > (i) the statements dated August 2022 of Mr U, Mr C, Mr K, Mr B, Mr G, Mr M, Mr J, and Mr E; > > > > (ii) the statements dated January 2023 of Ms T and Mr R; and > > > > (iii) the statement dated April 2023 of Mr L; and > > (b) the second group consists of (Group 2 Witnesses): > > > (i) the statement dated March 2023 of Mr I; and > > > > (ii) the statement dated April 2023 of Mr U.

1. The Group 1 Witness evidence concerns the payments of unspecified amounts, in cash, on unspecified dates, as reimbursements of un-itemised expenses relating to corporate box entertainment, travel/holidays and/or purchases incurred on the Applicant's credit card that the Applicant states were paid for by the Applicant on the lay witnesses' behalf.[71]
2. In relation to the Group 1 Witnesses, the Commissioner states this evidence should not be accepted because although some travel itineraries and airfare receipts have been provided:[72]

(a) in some instances, the names of the passengers have been wholly or partially redacted; > > (b) some of the travel itineraries do not include any details about how the payments were made;[73] > > (c) parts of the credit cards used for payment are missing. For example, see pages 2, 4, 6 and 8 of Annexure 46 to the Applicant's Second Statement which states, "Payment: CC AX ... 3118/EXP0412". The Commissioner states this suggests that an American Express credit card ending 3118 was used to make the payment. However, there is no evidence before the Tribunal that the Applicant holds a credit card ending 3118;[74] > > (d) other than travel itineraries, there is no corroborating or contemporaneous documentary evidence the expenses were incurred by the Applicant on the associates' behalf; > > (e) the available evidence lacks specificity; and > > (f) the documents exhibited are insufficient on their own to corroborate the Applicant's assertion that he incurred these expenses on these witnesses' behalf.

1. The Group 2 Witness evidence concerns the purchase of motor vehicles and jet skis.
2. In relation to the Group 2 Witnesses, the Commissioner states this evidence should not be accepted because:[75]

(a) in respect of the Mercedes Benz, Holden Astra and Holden Maloo, there is no evidence which identifies the vehicle or establishes the Applicant owned these vehicles; > > (b) there is no evidence of any legal transfer of the motor vehicles or jet skis from the Applicant to the purchasers; > > (c) there is no corroborating evidence of these transactions; and > > (d) the available evidence lacks specificity.

1. The Applicant has claimed that he was reimbursed in cash from several individuals who were not called to give evidence. The Commissioner states an adverse inference can be drawn from the Applicant's failure to call those witnesses and a failure to explain their absence.

1. The Commissioner submits that in the circumstances:

(a) the Applicant understated his assessable income by not reporting the Relevant Deposits; > > (b) the Applicant has not discharged his burden of proving the Relevant Deposits were not his income; > > (c) the Applicant has not positively demonstrated what the assessments should have been, and therefore has failed to demonstrate that the amended assessments are excessive.

2. The Commissioner determined that the Applicant conduct was evasive.[76]

1. Throughout the hearing several documents were marked for identification.
2. The Commissioner questioned lay witnesses regarding the source of cash used to reimburse the Applicant. As part of that cross-examination the Commissioner showed several witnesses official ATO documents which recorded whether they had lodged ITRs in the Relevant Years (Documents MFI4 to MFI6).
3. The Applicant submitted MFI4 to MFI6 should not be exhibited on the ground that they were not relevant to the proceeding because the mere fact that certain witnesses did not lodge ITRs does not mean they did not have sufficient cash (or access to cash), to reimburse the Applicant.[77]
4. The Tribunal agrees with the Applicant that the fact a person did not lodge an ITR in any given year does not of itself disclose a person's income or financial means. It may be that ITRs were not lodged to avoid paying tax, or it could mean they did not earn enough income to warrant the lodgement of an ITR. Even so, the information the ATO records contain are a part of the context in which the Tribunal is attempting to determine the probability of a matter having occurred. The availability of the means of a person to repay the Applicant the amounts they say they owed goes to the inherent likelihood of whether such reimbursement occurred (presuming the expense was incurred on their behalf to begin with). The Tribunal will exhibit those documents for this limited purpose to be considered as part of the evidence of each witness as to their source of cash and the likelihood of the purported reimbursement having occurred.

1. The Applicant is, and was at all relevant times, an Australian resident for tax purposes.[78] He has operated a construction business since 2003 through the Company.[79] The Applicant is the sole director and shareholder of the Company.[80]

1. In addition to the Company, during the Relevant Years the Applicant had the following corporate interests:[81]

Owner of 100% issued share capital since 4 March 2015

1. Between 1 July 2010 and 30 June 2015, the Applicant and the Company owned the following properties:[82]

1. The Applicant stated he held the following accounts in his own name, or in the name of a Company of which he was the sole director and shareholder, during the Relevant Years:[83]

1. The Applicant states he also held and operated several bank accounts with other various financial institutions during the Relevant Years:

1. The Applicant stated he had three credit cards from ANZ Bank which were in his name during the Relevant Years:[84]

(a) card ending #2457; > > (b) card ending #6341; and > > (c) card ending #4893.

2. The Applicant stated the ANZ Bank Frequent Flyer Platinum credit card account numbers were changed through time because the card was lost or stolen.[85]
3. The Applicant stated he used the ANZ Bank credit card for personal use during the Relevant Years.[86]
4. The Applicant stated he gave one of his credit cards to his wife. The Applicant's wife did not give evidence before the Tribunal. The Applicant states he never questioned his wife's purchases. She used his credit card because she had a bad credit rating.[87]
5. The Applicant's written evidence was that his credit cards were used by several people apart from his wife and children to fund their personal living expenses.[88] The Applicant also stated his mother-in-law, Ms T, had access to his credit cards.[89]
6. At the hearing the Applicant stated he would use the credit cards to buy things for "everyone" and that he had lost count of how many people he let use his credit card.[90] He said:[91]

I can't remember all of them at once. But there's about 13 or 14 of them. But there's actually more than 14. There's probably about 20 or something. But we chose 14. We thought that was enough witnesses. That should be enough witnesses to convince you > > ... > > So you're saying that - you know, 14 or whatever number of witnesses coming, but there are many, many others that do - - -?---There's many others, don't you worry about it. But we haven't included them. Because the trial will go on forever. > > So you used your credit cards to buy tens of people's things?---Yes. Twenty, maybe. I don't know. I lost count. I can't remember exactly

7. The Applicant states he was always paid back with cash.[92]
8. On some occasions his ANZ bank facility would automatically direct debit any amounts owing on the credit cards at the end of each ANZ credit card statement period. On other occasions he would deposit money onto the credit cards.
9. The Applicant states he would take money from the safe or his wife's bank accounts to pay off the credit cards.[93] The Applicant's wife's bank accounts were not in evidence. He stated he would keep payments of cash to pay off the credit card to less than $10,000 per transaction "[b]ecause we believe it to be illegal to carry $10,000 or more cash on oneself at any one time".[94]
10. In his supplementary statement dated 25 May 2023 the Applicant elaborated:

2. Between 1 July 2010 and 30 June 2015, I took money from my safe and paid these amounts with various banks. I said to the bank tellers to pay these amounts towards my ANZ and other credit card bills. I did this to avoid paying interest and charges on the ANZ and other credit cards. > > 3. If I had not paid enough cash to meet the credit card statement amount, I would return with more cash taken from the safe at [Property B]. I again would ask the bank teller to apply the paid amounts against my credit card bill and ANZ credit card.

1. The Applicant states a friend lent him $10,250 in 2010 for the purposes of re-mortgaging. The Applicant states he needed the money to be able to refinance a redraw facility he had over Property D.[95]
2. The Applicant gave the following evidence concerning a loan agreement with a friend:

55. I had an existing mortgage for $1.3 million for [Property B] with NAB. > > 56. In July 2010 I took out a re-mortgage with a redraw facility at $880k for [Property D] where I was $10,000 short for the deposit. Because I was $10,000 short for the deposit for the re-mortgage of [Property D] I borrowed money from a friend. I borrowed $10,000 from my friend. He gave me $10,000 in cash. > > 57. On 27 July 2010 I deposited the $10,250 into the NAB Gold Banking - Choice Account. > > 58. I repaid my friend the $10,000 over time. > > 59. From 16 November 2013 I had a redraw loan facility BSB:[redacted], Account Number: [redacted]. I was living off the redraw loan. I would regularly draw down on the loan to pay my personal expenses. I continued to draw down on the redraw facility until it was maxed out. > > 60. After I maxed out the redraw facility the first time, in early 2017 I mortgaged [Property C] for $500,000. > > 61. After I maxed out that redraw loan facility, I sold [Property A]. > > 62. I then continued to draw down on the redraw facility. Again, I maxed out the redraw facility. > > 63.After I maxed out the redraw facility again, I sold my dream home ([Property B]) which paid off the debt and left me with some money. > > ... > > 167. The amount of $10,250 deposited into Gold Banking - Choice was a loan given to me by a friend to re-finance [Property D] for the Company.

1. The Applicant's evidence is that there was a loan arrangement between himself and the Company. The Applicant provided a copy of a Loan Agreement entered into on 30 June 2015 which provides:[96]

(a) for a loan of $97,922.34; > > (b) Interest rate payable on the loan at 5.95%.

2. In his supplementary statement the Applicant elaborated:

14. Between 1 July 2010 and 30 June 2015, the Company made payments into my personal bank accounts via bank transfer. > > 15. I directed the majority of the payments from the Company to my home loan account. The home loan account had a redraw facility where I could withdraw money from the account at any time up to the total of the loaned amount.

1. The Applicant's evidence was as follows:[97]

(a) around 6 March 2009, he transferred $100,000 from his personal home loan account (#0671) to the Company's account #5329 (2009 Loan); > > (b) on the same day he withdrew $140,000 from the company's account #5329 which he then transferred to Audi Centre Melbourne for the purchase of a car registered to the Company; > > (c) his expectation was that the Company would repay him the $100,000; > > (d) around 29 April 2010 he took $144,000 from his account #0671 and transferred it to the Company's account #5329 (2010 Loan); > > (e) on the same day he transferred $170,000 from the Company's account #5329 to Mercedes Benz Melbourne for the purchase of a car registered to the Company; > > (f) his expectation was that the Company would repay him the $144,000; and > > (g) on 16 November 2013 he directed the Company to pay a total of $244,000 to his personal bank accounts as a repayment of the car loans.

1. The Applicant gave the following evidence about the family finance arrangements during the Relevant Years:[98]

(a) the Applicant and his wife kept separate bank accounts, partly because of his wife's poor credit rating; > > (b) family expenses were often paid using the Applicant's credit cards and his wife would pay cash or transfer from her bank accounts to the credit card before the end of the month to avoid high interest and late fees; > > (c) following the 2013 Accident he lived off his wife's income and the redraw loan facility (account #1165) as he was physically unable to do building work; > > (d) since 2017 he has been able to earn some business income in the Company and have been paid wages from the Company; > > (e) for various reasons the Applicant needed to sell Property A and took out a $500,000 mortgage on the gifted Property C; > > (f) subsequently to repay the mortgage and "get out of debt" he sold Property B.

1. In his written statement the Applicant states in or around 2014 the Company received around $400,000 that came in as dividends from a Joint Venture.[99]

1. During the Relevant Years the Applicant's wife operated a small business.
2. The business was sold in 2011 for "around $90,000". It was submitted on day 1 of the hearing that the Business Sale resulted in the receipt of $90,000 in cash which was placed in the family bank account.[100]
3. Since the sale of the business, his wife has assisted the Applicant on a part-time basis with his business ventures.[101]

Etihad Corporate Box[102]/Melbourne Cricket Ground Box[103]

1. In his statement the Applicant stated he leased a corporate box at Etihad Stadium during the Relevant Years. During the hearing this was corrected to the 2010 calendar year because the licence deed put into evidence by the Applicant showed the licence for the Etihad Box was only for that calendar year.[104]
2. The Applicant said he used one of his credit cards to cover all the expenses associated with the use of the Boxes.
3. The Applicant stated he used the Boxes to promote his business and to take his family and friends to events.

1. Between 1 January 2010 to 31 December 2010, the Applicant had a licence to use the Etihad Box.[106]
2. Pursuant to the Etihad Licence:

(a) the licencee was the Company; > > (b) the licence fee was $72,000, plus signage; > > (c) entitled the Applicant to 16 tickets per event; > > (d) in addition to licence fees there were catering fees for each event attended; and > > (e) the Applicant was granted the right to use and occupy the corporate suite during sporting and other event days.

(a) he would offer the tickets to friends and family and in return they would reimburse him in cash for the ticket and any catering services used; > > (b) he would pay the licence fee and then any catering fees per event using his credit card; > > (c) the Etihad Box cost approximately $27,000 per quarter; > > (d) "There were around 40 events per year which works out to be about $2,700 per event plus catering around $6,000 in total divided by 16 people. Each person paid around $400 per head and would pay on the day, some would pay more and some would pay less, there were even some people that didn't pay at all";[107] > > (e) each time the Box was used there were 10 to 16 people using the box; > > (f) Etihad did not accept cash so he would pay on his credit card and his guests would reimburse him with cash; and > > (g) he would put the cash he received into his safe located at his home:[108] > > 126. The money that I received matched the total expenses that were on the Credit Card from using the Box each week. Some months the cash I was paid at the Box was less than expenses on the Credit Cards. Some months the cash I was paid at the Box was more than the expenses on the Credit Cards. Overall, I was never left with an amount that was I couldn't cover each month because the funds from my wife hair dressing would cover it.

4. The Applicant provided some catering invoices/receipts for the Etihad Box. [109] The Applicant was not able to produce every Etihad Box invoice.

1. Between 1 January 2011 to 31 December 2014 the Applicant had a licence to use 50% of a MCG Box (MCG Licence).[111] The other 50% of the MCG Box was licenced by LPPE, a company belonging to Mr K. Mr K gave evidence at the hearing (discussed below from paragraph ‎226).
2. Pursuant to the MCG Licence:

(a) the licence fee for the Applicant was $52,000, and it entitled the Applicant to 8 tickets per event (although on occasions he may have used more or less); and > > (b) the Applicant was granted the right to use and occupy the corporate suite during sporting and other event days.

(a) he would offer the tickets to friends and family and in return they would reimburse him in cash for the ticket and any catering services used; > > (b) he would pay his share of the licence fee and then any catering fees per event using his credit card; > > (c) on top of the licence fee there were catering fees for each event attended; > > (d) when using the MCG Box the expenses were charged to the Applicant's credit card. The Applicant stated that he "would pay for all the MCG Box expenses and then everyone that used the MCG Box to watch an AFL game or event would pay me back in cash on the day"; > > (e) the Box had a 16 seat capacity; > > (f) each time he used the Box he would invite 8 people; > > (g) "Most of the time I paid for the MCG corporate box expenses on my credit card and Mr Aprille gave me cash to cover the expense of the corporate box"; > > (h) he would put the cash he received from family and friends using the MCG Box into his safe located at his home; and > > (i) at the end of the credit card period he would deposit cash from his safe into his credit card accounts.

4. The Applicant provided some catering invoices/receipts for the MCG Box.[112] The Applicant was not able to produce every MCG Box invoice.
5. No written licence agreement for the MCG Box was produced.

1. The Applicant states that between 2011 and 2015 he purchased flights for 27 people using his credit card. The Applicant says those people have repaid him for those purchases and he was generally repaid in cash.[113]
2. The Applicant provided copies of some flight itineraries and emails from airlines as corroboration of his expenditure on flights.[114] The Applicant was not able to produce every itinerary or corroborating document for every flight he purchased on behalf of others. The names on some of the tickets and itineraries had been redacted. The Applicant states this was done by his former tax agent, and he was unable to provide unredacted copies.

1. The Applicant states he also spent $31,898.80 on flights for Mr K's family to travel overseas using his credit card. The Applicant also states he spent money on accommodation and other overseas travel expenses. The Applicant states he paid for these expenses on his credit card and Mr April reimbursed him in cash.

1. The Applicant states he also spent 10,373 in Croatian Kuna[115] on flights for Mr M to travel overseas using his credit card. The Applicant provided copies of the flight itineraries.[116] The Applicant states he paid for these expenses on his credit card and Mr M reimbursed him in cash.

1. The Applicant states he also spent money on flights for a Ms D to travel overseas using his credit card. The Applicant provided copies of the flight itineraries.[117] The Applicant states he paid for these expenses on his credit card and was reimbursed in cash.

1. The Applicant states he also spent money on flights and accommodation for his wife and children.

1. The Applicant states that during the Relevant Years he:

(a) purchased hotel accommodation for family and friends using his credit card; > > (b) friends and family repaid him for those purchases and he was generally repaid in cash;[118] and > > (c) he put the cash he received from family and friends into his home safe.

1. The Applicant states that during the Relevant Years he paid for the use of hire cars for family and friends using his credit card. The Applicant says the cars would generally be hired in his name and the friends and family would reimburse him for half the fee in cash.[120]

(a) in or around May 2011 to September 2011 he paid for overseas flights and accommodation for Mr L and Mr L's family members, Ms D, Ms A and his own family; > > (b) he paid the trip on his credit cards; > > (c) he calculated how much each of his friends owed him and told them the amount they had to pay; > > (d) he was reimbursed by his friends in cash; > > (e) "In or around September 2011, each of my friends paid me in cash the amount of around $10,000 each as repayment for the overseas trip".

(a) a copy of the passenger itinerary receipts; and > > (b) a copy of hotel itineraries.

(a) in 2014 he travelled with his family and mother-in-law Ms T; > > (b) Ms T paid him back in cash for the flights.

2. The Applicant provided a copy of itinerary receipts for Ms T.[124]

1. The Applicant states he sold a property on 23 January 2008 for $360,000 to GBMJ and received a cash deposit of $72,000 to be paid later.
2. The Applicant provided the following documents:[126]

(a) a vendor statement; > > (b) contract of sale; > > (c) particulars of sale; > > (d) certificate of title; and > > (e) property title search.

3. The Applicant states the $72,000 was given to him in cash by Mr P, director of GBMJ. The Applicant stated that for the purpose of the purchase, he had loaned GBMJ $72,000, which he agreed could be repaid in cash. The Applicant states GBMJ paid $288,000 on 18 February 2008. The outstanding balance owing was the amount he had loaned of $72,000. The Applicant states the loan was repaid in cash in 2010 or 2011 and he deposited the money into his safe.

1. In his written statement the Applicant's evidence was:[127]

(a) in early 2009 he sold his wife's Holden Astra to Mr U for $25,000; > > (b) Mr U paid him $1,000 cash per month until around the end of 2010 when he paid a final cash amount of $5,000; and > > (c) he put the cash he received from Mr U into his safe.

1. The Applicant's written evidence was:[128]

(a) in or around end of 2010 (at the hearing this was corrected to March 2010) he sold a Mercedes CLK55 to Mr I for $100,000;[129] > > (b) Mr I paid him in instalments; > > (c) from about December 2010 Mr I paid him approximately $10,000 a month in cash; and > > (d) he put the cash he received from Mr I into his safe.

1. The Applicant's written evidence was:[130]

(a) he purchased the 2008 Jet Ski on 10 October 2008 for $23,250; > > (b) he purchased the 2009 Jet Ski on 23 November 2009 for $28,500; > > (c) he purchased the 2010 Jet Ski on 5 November 2010 for $24,900; > > (d) before November 2010 Mr U agreed to buy the 2008 and 2009 Jet Skis for $40,000 on the following terms: > > > (i) $10,000 as a first payment and the balance of $30,000 in instalments within 12 months; > > > > (ii) he put the cash he received from Mr U into his safe. > > (e) because of the Accident in 2013 the Applicant could no longer use the 2010 Jet Ski; > > (f) at the start of 2014, Mr U agreed to buy the 2010 Jet Ski for $20,000; > > (g) Mr U paid him $20,000 in cash; and > > (h) he put the cash he received from Mr U into his safe.

2. The Applicant provided invoices corroborating his original purchase of the three jet skis.[131]

1. The Applicant's written evidence was:[132]

(a) in early 2012 he sold the Holden Maloo to Mr U for $55,000; > > (b) Mr U paid monthly instalments of $10,000 until mid-2012; > > (c) he put the cash he received from Mr U into his safe.

1. In the 2011 Year the Applicant received $6,878.75 in rental income which was not correctly identified in his ITR. The Applicant sought to voluntarily amend his assessment, through his then-tax agent, with respect to this amount to clarify that it was rental income.[133]
2. During the audit the Applicant's then tax agent, Mr O from ASJR, explained to the Commissioner that the 2015 ITR had an incorrect income source totalling $6,636. Subsequently, when voluntary amendments were prepared and lodged back in February 2018, the amended ITR was overlooked with lodgement. However, this was corrected in May 2018 and lodged with the correct income source, which included the correct rental deposits as listed. The ATO have since rejected the amended ITR.

1. The Applicant gave the following written evidence about his assessable income for the 2011 Year:[134]

163. In my 2011 income tax return I declared income from franked dividends of $50,000 and dividend franking credits of $21,428. > > 164. I did not have any expenses in 2011. > > 165. My total taxable income was $71,428.

1. The Applicant gave the following written evidence about his assessable income for the 2012 Year:[135]

168. In 2012 I received income from franked dividends of $48,000 and dividend franking credits of $20,571. > > 169. I did not have any expenses in 2012. > > 170. My total taxable income was $68,571. > > ... > > 172. On 20 February 2018 [ASJR] lodged an amendment to my income tax return for the year ended 30 June 2012 (2012 Amendment).

1. The Applicant gave the following written evidence about his assessable income for the 2013 Year:[136]

174. In 2013 I received gross income of $100,000. > > 175. I had expenses of $7,020 for managing my tax affairs. > > 176. My total taxable income was $92,980. > > ... > > 178. On 20 February 2018 [ASJR] lodged an amendment to my income tax return for the year ended 30 June 2013 (2013 Amendment).

1. The Applicant gave the following written evidence about his assessable income for the 2014 Year:[137]

180. In 2014 I received franked dividends of $76,000 and franking credits of $32,571. > > 181. I did not have any expenses in 2014. > > 182. My total taxable income was $108,571. > > ... > > 184. On 20 February 2018 [Mr O] from [ASJR] lodged an amendment to my income tax return for the year ended 30 June 2014 (2014 Amendment).

1. The Applicant gave the following written evidence about his assessable income for the 2015 Year:[138]

185. In 2015 I received $6,878 in rental income. > > 186. I did not claim and expenses in my 2015 tax return. > > 187. My total taxable income was $6,878. > > ... > > 189. On 18 May 2018 [ASJR] lodged an amendment to my income tax return for the year ended 30 June 2015 (2015 Amendment).

1. During the relevant Years the Applicant engaged Ms N (and subsequently) ASJR to prepare his ITRs. ASJR also prepared the annual statements for the Company.[139]
2. The Applicant described the relationship and process undertaken with Ms N as follows:[140]

(a) he provided the tax agent with relevant documents and information for them to prepare and file his ITRs. > > (b) he mentioned to Ms N of ASJR that the credit cards were for private expenses; > > (c) he asked whether he should declare the expenses and deposits, to which his accountant said no; > > (d) he asked his accountant about keeping records relating to the MCG Box and his accountant said he could not claim the box as a tax loss and on that advice, he did not keep any records; and > > (e) ASJR did not request additional information from him between 2011 and 2015 and that he understood that ASJR had all the information required to prepare and file his tax returns.

3. In or around 2019 ASJR commenced proceedings against the Applicant in relation to unpaid fees. The matter was settled before hearing. As a result of these circumstances the Applicant stated that he did "not consider my relationship with [ASJR] to be amicable".[141]

1. In 2019 the Applicant engaged Mr Steven Wright from KBB Accountants to prepare his ITRs. The Applicant states that ASJR would not release his tax documentation until early 2020.[142]

1. Mr U has known the Applicant for approximately fifteen years.

1. Mr U's written evidence in his first statement was:

(a) between 2011 and 2015 he used the Applicant's credit card two times per week to buy "drone buggies, remote-control hobby items and other things" because he did not have a credit card of his own; > > (b) the purchases were between $2 and $2,000; > > (c) he repaid the Applicant in full in cash.

2. At the hearing Mr U estimated that the Applicant had bought him approximately $15,000 to $20,000 worth of goods on the Applicant's credit card.[143] He stated that all the purchases were done in person, and he paid the Applicant in cash on the spot.[144]

1. Mr M has known the Applicant for over ten years. The Applicant is a cousin to Mr M's father.

1. Mr M's written evidence in his first statement was that on 15 April 2015 the Applicant purchased a flight from the Gold Coast to Melbourne on his behalf because his credit card did not work. A fulsome explanation was given at the hearing regarding the fact that his age at the time limited his credit limit in conjunction with his coming from overseas.[145]
2. Mr M's evidence was that he always repaid the Applicant in full in cash.
3. In an updated statement dated 12 February 2024, Mr M stated he had become aware of further flights paid for by the Applicant on his behalf. Again, he states he repaid the Applicant in cash. He attached the additional flight itineraries he was able to find to his statement. Some of the itineraries turned out to be duplicates.[146]

1. Mr L has known the Applicant since he was a child. The Applicant is Mr L's first cousin.

(a) he attended the Etihad and MCG Box "around 10-15" times between 2011 and 2015 and partook in the catering supplied; > > (b) he always reimbursed the Applicant each time and paid approximately $300 cash; > > (c) the Applicant told him he paid for the Boxes on his credit card and he could pay him in cash; > > (d) he saw approximately 12 people in attendance when he attended; and > > (e) he would see others paying the Applicant in cash for using the Boxes also.

(a) in 2011 he went on an overseas holiday with his family in a group with the Applicant and others; > > (b) the Applicant purchased Mr L's flights and accommodation totalling approximately $16,000; > > (c) the Applicant purchased Mr L's parents' flights and accommodation; > > (d) the Applicant paid for Mr L's share of the holiday because Mr L had not started work as a plumber yet (which he planned to do when he returned) and because he said he could "get a good deal on the flights though Etihad" because of his Box; > > (e) he repaid the Applicant in full in cash; > > (f) to the best of his knowledge his parents repaid the Applicant.

2. Mr L states the Applicant paid for numerous flights between Gold Coast and Perth on his behalf ranging between $150 to $500. Mr L said he repaid the Applicant in cash.
3. At the hearing Mr L told the Tribunal he did not keep records because there was "trust" between him and the Applicant.[147] He was unable to recall exactly how much he repaid the Applicant each Relevant Year and could only say the payments were not regular and either occurred at his or the Applicant's house.[148] Mr L also said the dates he attended the corporate boxes might be wrong.[149]

1. Mr G has known the Applicant for thirty-five to forty years.

(a) he attended the Etihad Box "multiple times" times between 2011 and 2015 as the Applicant's guest and partook in the catering supplied; > > (b) he always reimbursed the Applicant each time and paid approximately $500 to $1,000 in cash depending on how many people he took to the box; > > (c) he saw approximately 10 people in attendance when he attended; and > > (d) he would see others paying the Applicant in cash for using the box also.

(a) between 2011 and 2015 the Applicant purchased several flights on his behalf because the Applicant had organised the trip; and > > (b) he repaid the Applicant in full in cash.

2. At the hearing Mr G said he could not recall the dates he paid the Applicant. He said he would pay the Applicant rather than making a bank transfer because "cash is king".[150]

1. Ms T has known the Applicant for thirty years. Her daughter is married to the Applicant.

(a) she attended the Etihad Box or MCG Box "around 10 times" between 2011 and 2015 and partook in the catering supplied; > > (b) she always reimbursed the Applicant $150 each time; > > (c) her daughter told her the Applicant paid for the Boxes using his credit card; > > (d) she sometimes saw approximately 10-20 people in attendance when she attended; > > (e) she states she saw others paying the Applicant in cash for using the Boxes also.

2. At the hearing Ms T told the Tribunal:[151]

(a) she could not recall dates or events; > > (b) she had no records of her attendances at the Boxes or paying the Applicant; and > > (c) she probably reimbursed him $1,000 to $1,500.

(a) between 2011 and 2015 she asked the Applicant to pay for her approximately thirty flights using his credit card because she understood from her daughter that he could obtain a discount as an Etihad Box owner; > > (b) the Applicant paid for her flights to Perth, the Gold Coast and Europe; > > (c) the flights to Perth cost approximately $395 each way; > > (d) the flights to the Gold Coast cost approximately $100 each way; > > (e) the flights to Europe cost approximately $4,000 each way; and > > (f) she repaid the Applicant in cash.

2. At the hearing Ms T confirmed she could not recall the dates of the flights but that she probably paid him back monthly with whatever she could afford.[152] Ms T said she still owes the Applicant approximately $3,000 for flights paid for on her behalf.[153]

1. Ms T's written evidence was she would use the Applicant's credit card to buy items online. She said she always paid the Applicant back.
2. At the hearing Ms T said the:

(a) purchases were usually valued between $10 to $500; > > (b) she would ask her daughter to ask the Applicant to make the purchase on her behalf; > > (c) she did not use the credit card herself and did not know the number of the card; > > (d) she could not recall how much was spent in total over the period; and > > (e) she paid the Applicant back for the credit card purchases.

3. At the hearing Ms T said she could not recall the exact amount of credit card purchases the Applicant had made on her behalf.[154]

1. Mr C has known the Applicant for twenty-two years and is married to the Applicant's cousin.

(a) he attended the Etihad Box "several" times between 2011 and 2015 and partook in the catering supplied; > > (b) the Etihad Box was always full (approximately 16 people in attendance) when he attended; > > (c) he paid $500 in cash each time to the Applicant each time he used the box, and saw others paying the Applicant in cash for using the box also.

(a) he would have attended 50 matches and two concerts during the Relevant Years; > > (b) those attendances would have cost him approximately $26,000; and > > (c) acknowledged that he could not recall exactly when he attended the Etihad Box but would have been during the AFL season.[156]

3. Mr C said he would collect the cash from others who attended the box on behalf of the Applicant when the Applicant was not present. Mr C was asked what he did with the money he collected to which he responded:[157]

---I just kept it at my house. Yes. > > So you kept it as your own money?---No. > > No. So what did you - so you took it home, is that what you mean?---Yes. > > And then what? What did you do with the cash?---I left it at home. > > Did you give it to GNBF?---No, no, because he wasn't there. > > So did you - - -?---He wasn't around, yes. > > So did you give it to him when he returned?---Yes. > > So you gave it - - -?---I think it - I think I recall, I put it in his safe. > > So you took it home first and then you put it in his safe on another day, is that what you mean?---Yes, that's right. > > Okay. So you didn't give it to him in person, did you? You didn't - - -?---No. > > No, okay. And did you bank it for him?---No. I didn't. Well, you know, like I said from previous - I banked it when, you know, he asked me to. To go to his safe, bank it, and that's it. But when I've - yes. You know? Like. > > Sorry, did you - - -?---Can you repeat the question again? Sorry? > > So you collected cash from other people who went to the - - -?---Yes, that's right. Yes - - - > > GNBF's box?---Put it in his safe. > > You put it in the safe?---That's right. > > And then you're saying that there was that time - - -?---That's right. I didn't, like, put it in his safe and then go and bank it that day. Like, do you know what I mean? Like, as in, didn't put it in the safe and then leave it there, you know, for - you know. Like, I'm just trying to say that I put it in - I got the money, went home, obviously, when I had time - I don't know if it was the next day or the day after. Went to the safe, put it in there, left it there. Do you know what I mean? Got the code, put it in, leave it. > > Yes, so you didn't take it to the bank for him?---No.

4. Mr C could not recall the amounts he collected from others.[158]

(d) between 2011 and 2015 the Applicant purchased approximately $2,500 worth of flights on his behalf because it was easier for him to pay when they travelled together; and > > (e) he repaid the Applicant in cash.

2. At the hearing Mr C acknowledged he had no records of these purchase or repayments.[159]

1. At the hearing Mr C stated that he would collect money from people and put it in the Applicant's safe.[160] He stated that he would bank it if the Applicant asked him to.
2. Mr C was questioned about the following deposits made to the Applicant's bank accounts:[161]

1. Mr C's evidence in relation to deposit #25 was:[162]

(a) he loaned $9,000 to the Applicant; > > (b) he made the cash deposit at the Applicant's request; > > (c) he took $9,000 from the Applicant's safe and deposited the cash into the Applicant's ANZ Frequent Flyer credit card account on 12 August 2011; > > (d) the Applicant had repaid the loan but he did not recall when the Applicant repaid the loan; and > > (e) he had no repayment records.

2. In respect of deposit #26, Mr C said he took $9,000 from the Applicant's safe and deposited the cash into the Applicant's ANZ Frequent Flyer credit card account on 23 August 2011.[163]
3. In respect of deposits #27, #91, #92 and #93, Mr C did not recall making these deposits.[164]
4. None of this evidence was in Mr C's written witness statements.

1. Mr E has known the Applicant for twelve to fifteen years.

(a) he attended the Etihad and MCG Box "approximately 15-20" times between 2011 and 2015 and partook in the catering supplied; > > (b) he always reimbursed the Applicant each time and paid approximately $250 to $300 cash for each person he took to the Boxes; > > (c) he saw approximately 10 people in attendance when he attended; and > > (d) he saw others paying the Applicant in cash for using the Boxes also.

(a) conceded that he could not recall exactly which stadium he attended or in which year he attended either the Etihad Box or the MCG Box; > > (b) could not recall the exact dates he attended the corporate Boxes or paid the Applicant; > > (c) told the Tribunal he had no records or documents of what he paid the Applicant; and > > (d) accepted that on his evidence he must have paid the Applicant upwards of $22,500 for his attendances at the corporate Boxes.

(a) between 2011 and 2015 the Applicant purchased several flights (which he clarified in a supplementary statement to mean "many"); > > (b) the Applicant paid for these flights on his behalf because it was "convenient"; > > (c) during this time he: > > > (i) was regularly flying to Melbourne for work; > > > > (ii) did not have a credit card, only a debit card; > > > > (iii) found it difficult to purchase tickets online; and > > (d) he repaid the Applicant in cash.

(a) acknowledged that, other than one flight itinerary, he had no records of flights and payments to the Applicant; > > (b) estimated he paid the Applicant up to $9,000 in cash each year between 2011 to 2015 for flights;[167] > > (c) said he made his second statement because he remembered there were more flights although he could not produce any itineraries; > > (d) said he obtained the cash to pay the Applicant from work but he had no bank or other records to confirm this; and > > (e) accepted that he did not lodge ITRs during the Relevant Years;[168] and > > (f) could not explain why he had not lodged ITRs during the Relevant Years.[169]

1. Mr B has known the Applicant for eighteen years.

(a) he attended the Etihad Box "12 to 15 times" between 2011 and 2015 and partook in the catering supplied; > > (b) he paid cash of $3,000 to $5,000 each time to the Applicant each time he used the box. Each time he went he saw approximately 8-15 people in attendance; and > > (c) it was "common knowledge that if you used the box you would pay the Applicant back".

(a) said the $3,000 to $5,000 payments were to cover the box hire fee and catering fees; and > > (b) conceded that he could not remember the exact dates of his attendances.

1. Mr I's first statement made no reference to his having attended the Etihad Stadium at the Applicant's request or invitation.
2. In a supplementary statement Mr I recalled that he attended the Applicant's Etihad Box in 2010 to 2012 to see concerts and sports matches. He stated:[171]

(a) he paid the Applicant approximately $1,200 to $1,500 each time he attended depending on the event and catering fees; and > > (b) he reimbursed the Applicant in cash while at the Box as he saw other people doing.

(a) he did not mention the Etihad Box in his first statement because he did not realise the seriousness of the matter;[172] > > (b) he attended the Etihad Box around half a dozen times;[173] > > (c) conceded he could not recall the exact dates he attended;[174] > > (d) he repaid the Applicant around $7,200 to $9,000 in cash for using the Etihad Box.[175]

1. Mr R has known the Applicant for thirty-seven years.
2. A witness statement signed by Mr R had been filed prior to the hearing. The witness statement addressed payments relating to Etihad and MCG Boxes and for flights.

1. Among other things, in the witness statement Mr R stated he used the Etihad Box and MCG Box "a lot", twice per week, between 2011 and 2015 and partook in the catering supplied. The statement provided:

4. [The Applicant] said that the Box cost about $300 per person each time it was used. [The Applicant] said that I could use the Box but would need to pay him back $300 each time I used it. > > 5. [The Applicant] said words to the effect that the Box didn't allow for each person to pay for themselves. [The Applicant] said that he would pay for the Box using his credit card and that the easiest way was for me to pay him back. > > 6. Sometime after 2011 [the Applicant] told me that he also had access to a Box at the MCG and that I could use the MCG Box if I wanted. [The Applicant] said that like the Etihad Box the cost was about $300 per person and that he would pay for the Box on his credit card. I said words to the effect that I would pay [the Applicant] back the $300 each time.

2. At the hearing Mr R told the Tribunal the written evidence about Etihad Stadium was not correct and requested his statement be amended to delete that evidence.
3. Mr R told the Tribunal he did not go to the box twice per week, and that he had never used the box during the Relevant Period.
4. Mr R said he made no payments made to the Applicant during the Relevant Period for any attendances at the MCG or Etihad boxes.

(a) between 2011 and 2015 he flew about 5 times to and from the Gold Coast from Melbourne at a cost of $500 per trip; > > (b) the Applicant told him he got good discounts on flights because he had the Etihad Box; > > (c) the Applicant bought the flights on his behalf because: > > > (i) Mr R "didn't have internet access" and was not confident using a computer; > > > > (ii) the Applicant thought he could get a good price for the tickets; and > > (d) he repaid the Applicant in full in cash.

2. At the hearing Mr R conceded that he could not recall the cost of the flights the Applicant purchased for him on his behalf or the amount he repaid the Applicant.[176]

1. Mr J has known the Applicant for fifteen years.

(a) he attended the Etihad Box "various" times between 2011 and 2015 and partook in the catering supplied; > > (b) he paid cash to the Applicant each time he used the box for his role in arranging the event.

2. At the hearing Mr J said he attended the box between March 2011 and November 2015. One year he recalled attending a few times, but he could not recall the exact number of times or the dates.[177] He did not keep any records but stated he paid the Applicant approximately $500-$600.[178]

(a) he attended the Etihad Box "on many occasions" between 2011 and 2014 and partook in the catering supplied; > > (b) he paid cash each time to the Applicant each time he used the box; > > (c) the box was almost always full (approximately 10-15 people in attendance) when he attended; > > (d) he would see others paying the Applicant in cash for using the box also; and > > (e) the Applicant was the host and hired the box on a full-time basis between 2011 and 2014.

2. At the hearing Mr K gave evidence that:[179]

(a) between 2011 and 2014 he attended a box at least 10 times as a guest of the Applicant; > > (b) he was the director of LPPE which had a licence to a corporate box at the MCG; > > (c) LPPE shared the use of the MCG Box with the Applicant from around 2010 or 2011 until the end of 2014 or 2015; > > (d) LPPE and the Applicant paid the MCG Box licence fee quarterly in advance; > > (e) there were plenty of times when the Applicant used by MCG Box by himself; > > (f) whoever was the host of the MCG Box was responsible for paying for the catering; > > (g) the MCG did not automatically bill the licence holder of the MCG Box at the end of each event. The MCG required payment at the conclusion of the event and did not accept cash payments; > > (h) he did not know whether two credit cards could be used to pay for catering at the MCG Box or whether the MCG would allow split bills; > > (i) he did not recall the caterer at the MCG accepting cash and did not recall paying the caterer at the MCG in cash; > > (j) on one occasion in or around 2012 he and the Applicant sublet the MCG Box to a Mr Q. Mr Q had the corporate box next to theirs at the MCG. Mr K transferred half of the funds he had received from subletting the MCG Box to Mr Q and those funds were likely transferred to the Company's bank account shown to Mr K during cross examination;[180] and > > (k) he paid the Applicant between $200 to $500 in cash each time he used the box as the Applicant's guest.

1. Mr I has known the Applicant for fifteen years.

(a) he agreed to buy a Mercedes Benz from the Applicant in 2010 for $100,000. > > (b) the terms of arrangement were as follows: > > > (i) he would pay the Applicant in instalments - $10,000 deposit upfront and then $10,000 per month; > > > > (ii) no interest was payable; > > (c) there was no written loan agreement, it was a "handshake agreement"; > > (d) no transfer of ownership forms for the car were ever executed; > > (e) he "did not know [he] had to organise documents to transfer the car"; and > > (f) at the end of 2011 Mr I states he sold the car to another person.

2. In an updated statement dated 13 February 2024 Mr I stated he wished to make corrections to the first statement. Those corrections were that he agreed to buy the Mercedes Benz in 2008 not 2010. Mr I did not make any change or clarification to when he commenced paying the Applicant for the car.
3. At the hearing he stated:

(a) he had paid for the car by mid-2009;[181] > > (b) he paid for the car in cash;[182] > > (c) the car was not legally transferred to him[183] and he has no transfer documents;[184] > > (d) he sold the car to Mr F, the father-in-law of a friend;[185] > > (e) the car was not transferred to Mr F.

1. The evidence from Mr U's first statement is set out from paragraph ‎167 above.
2. In April 2023 Mr U provided a further statement regarding the purchase of a motor vehicle and jet skis from the Applicant.

(a) he agreed to buy a Holden Astra from the Applicant in 2009 for $25,000; > > (b) the terms of arrangement were that he would pay the Applicant in instalments - $1,000 per month; > > (c) he paid a final instalment of $5,000 in cash in late 2010; and > > (d) no transfer papers were executed.

(a) he agreed to buy two Seadoo jet skis from the Applicant in late 2010; > > (b) the Applicant told him he was selling the jet skis because he wanted to purchase newer models; > > (c) they agreed on a sale price of $40,000 for both jet skis; > > (d) the terms of arrangement were as follows: > > > (i) he would pay the Applicant in instalments - $5,000 deposit upfront and then the remainder within 12 months; > > > > (ii) he agreed to pay a further $5,000 deposit before he could take the second jet ski and then paid $10,000 every three months; and > > (e) no transfer papers were executed.

2. In 2014 Mr U agreed to buy a third jet ski (a Seadoo RXT) from the Applicant for $20,000 cash. Mr U states he paid for this jet ski in full. No transfer papers were executed.

(a) he agreed to buy a Holden Maloo from the Applicant in early 2012; > > (b) they agreed on a sale price of $55,000 for the Maloo; > > (c) the terms of arrangement were as follows: > > > (i) he would pay the Applicant in instalments - $5,000 deposit upfront and then the remainder within 12 months; > > > > (ii) he paid $10,000 in cash every month; and > > (d) the last instalment was paid in mid-2012.

1. Mr Wright is an accountant and a Member of CPA Australia. He has over twenty years of experience in public accounting and ten years as a Registered Tax Agent of his own practice.
2. Mr Wright became the Applicant's tax agent in 2019.
3. Mr Wright provided his opinion of the Applicant's taxable income for the Relevant Years. There was no instruction letter provided and no details of specifics of the instructions or documents he was provided with to conduct this task.
4. Mr Wright simply stated in his first written statement that his opinion was "based on the information provided [to him] by the Applicant". Mr Wright's assessment of the Applicant's taxable income for the Relevant Years was as follows:

1. The amounts assessed by Mr Wright in his initial statement merely reflect what was in the Applicant's ITRs.
2. Mr Wright later provided a supplementary statement in which he set out the steps he took to determine the Applicant's assessable income. He obtained the lodged ITRs for the Applicant's family trust, the Applicant, and the Company for the Relevant Years.[186]
3. In relation to the Applicant's family trust, Mr Wright noticed the Trust reported losses and made no distributions during the Relevant Years. Mr Wright states the Applicant instructed him that the Trust's ITRs were initiated and agreed to by the ATO.[187]
4. In relation to the Company ITRs, he said understood from a letter sent to the ATO by a representative of ASJR that amendments were required.[188] Mr Wright did not have a copy of the financial statements of the Company and understood from the Applicant that ASJR had refused to provide them.[189] Mr Wright did have a copy of the Company's bank statements for the Relevant Years.[190]
5. In relation to the Applicant's ITRs, Mr Wright stated he understood from a letter sent to the ATO by the representative of ASJR that amendments were required.[191] Mr Wright said the Applicant instructed him as follows:[192]

(a) he was the sole director and shareholder of the Company; > > (b) he had worked in the building & construction industry from 22 May 2003 until the Accident; > > (c) as a result of the injuries suffered in the Accident, he was unable to work in the building and construction industry; > > (d) the money paid by the Company into his Home Loan Account until the Accident was income; > > (e) the money paid by the Company after the Accident was repayment of the 2009 Loan and 2010 Loan (described at paragraph ‎118 above); and > > (f) the 2009 Loan and 2010 Loan were drawdowns from the Applicant's Home Loan Account.[193]

6. Mr Wright states that a review of the Applicant's bank statements indicates that the Applicant received $675,435.69 from the Company as follows (Company Deposits):[194]

1. Mr Wright said the Applicant instructed him that, in relation to the Company Deposits, of the $307,564.27 received by the Applicant from the Company in the 2014 and 2015 income years that $244,000 of this amount was treated as a repayment by the Applicant for the amounts he had loaned to the Company on 6 March 2009 and 29 April 2010.[195]

1. Mr Cerantonio is a Fellow of CPA Australia and has practiced as an accountant for more than 50 years and as a forensic accountant.
2. Mr Cerantonio provided a report and gave evidence at the hearing.
3. Earlier in the Tribunal process the Commissioner had submitted that the Cerantonio Report did not meet the Tribunal's Guideline on Persons Giving Expert and Opinion Evidence (Guidelines), because it did not include:[196]

(a) a copy of all instructions given to him; > > (b) a list of all documents provided to him; > > (c) an identification of the facts and assumptions and sources of information relied upon; and > > (d) the reasons for his opinion or conclusion.

4. At the hearing the Commissioner did not object to the admission of Mr Cerantonio's report but instead made submissions regarding its value and weight.
5. According to Mr Cerantonio's report he was instructed to:[197]

(a) Review the information and documents provided by [the Applicant] and his Accountant, Steve Wright.

(b) Provide an expert report in accordance with Order 44 of the Supreme Court (General Civil Procedure) Rules 2015 in respect of instructions provided by [the Applicant's then lawyer], in particular to report on the source of income included in the Bank Statements of [the Applicant] that has been assessed by the Commissioner of Taxation as 'Unexplained Deposits" resulting in the ATO relying upon the avoidance of tax due to fraud and evasion to amend the tax returns in years ending 30th June 2011, 2012, 2013, 3014 and 2015

Scope and Purpose

The purpose of this report is to:

(c) Review the documents and material provided by [the Applicant] and his Accountant, Steve Wright including:

(i) Bank Statements and Credit cards in the name of [the Applicant]

(j) Documents received from [the Applicant] and his Accountant Steve Wright.

(k) Provide an assessment as to the source of the "Unexplained Deposits" as determined by the ATO.

(l) Identify the source of the of all deposits in the various [the Applicant] Bank an [sic] Credit Card Accounts

1. Mr Cerantonio made the following "key findings":[198]

• The Etihad contractual arrangements were with [the Company] and not with [the Applicant] (Appendix A)
• All Etihad and MCG Stadium invoices were issued to [the Company] (Appendix B)
• All payments to Etihad & MCG Stadiums were made from the various bank and credit card accounts in the name of [the Applicant] on behalf of [the Company] and incorrectly classified as cash deposits instead of loans to loans to [the Company] (Appendix C)
• All Bank and Credit Card accounts (appendix C) in the name of [the Applicant] recorded;

(i) personal and private transactions of [the Applicant]. > > (j) Acted as a clearing account in relation to the payment of all expenses in relation the hiring a Corporate Box of both the MCG and Etihad stadium; > > (k) Paid all expenses paid on behalf of all box attendees and friends. > > (l) The regular re-imbursement of such expenses paid by the box attendees and friends were deposited in [the Applicant]'s personal safe and regularly banked in payments of just less of $10,000 and classified as cash deposits instead of loans to Company and re-imbursement of expenses paid.

• Bookkeeping and accounting records were not recorded in view that [the Applicant] was not carrying on a business as all transactions were of a private and domestic nature. The Corporate Box was provided for the personal use and enjoyment of [the Applicant]'s attendees and friends, and there was no profit making intention. In view of this we were not able to match the cash deposits with the re- imbursements of such expenses paid by each attendee. This also applied in relation to expenses paid by [the Applicant] on behalf of friends in relation to overseas trips, interstate travel, accommodation and catering costs
• We believe that financial statements for [the Company] were prepared for the financial years ending 30th June 2011, 2012, 2013, 2014 and 2015 but in view that all transactions were of a private and domestic nature and paid from [the Applicant]'s personal Bank and Credit Card account, we concluded that it would not be necessary to inspect the financial reports of [the Company] as the transactions in the clearing account would not have had any impact on the financial statements of [the Company] with the exception of [the Applicant]'s loan account.
• Invoices issued to [LPPE] were payable from the various bank accounts in the name of [Mr K].
• All catering invoices were issued on the day and paid solely by [the Applicant] on behalf of himself (Appendix G) and re-imbursed on the same day by those in attendance together with the portion of the box hire. (Appendix D)
• [The Applicant] on behalf of himself and [the Company] would collect all cash received from those in attendance and deposit into his personal safe. (Appendix M)
• [The Applicant] would deposit the funds in the safe on a regular basis in his various bank and credit card accounts and classified them incorrectly as cash deposits instead of loans to [the Company] and re-imbursement of expenses paid by [the Applicant] (Appendix C)
• [The Applicant] on behalf of himself would pay all the expenses on behalf of those attending all games and events including all hire of vehicles, air flights and accommodation and would be re-imbursed on a regular basis. (Appendix C), (Appendix F- Car Hire), (Appendix E- Accommodation), Appendix I - Travel)

At no stage during the investigation did the ATO representative analyse the bank statements, or credit cards to determine the expenses incurred in relation to the deposit in which the ATO representative classified as assessable income. In view of the close association between the bank deposits and expenses, the ATO's conclusion in classifying bank deposits as "Unexplained Deposits" was in my opinion an error of judgement in view of the ATO definition of fraud and evasion. > > (emphasis added)

1. In the Relevant Years there were electronic and cash payments made into the Applicant's bank accounts and credit cards. The disputed payments made to the Applicant's accounts totalled $765,461.
2. The amount of the Relevant Deposits in each relevant financial year is as follows:

(a) 2011: $195,069.14 > > (b) 2012: $194,454.05 > > (c) 2013: $170,720.00 > > (d) 2014: $147,700.00 > > (e) 2015: $57,517.81 > > (f) Total: $765,461

3. Despite receipt of the Relevant Deposits, the Applicant's ITRs filed for the Relevant Years only identified $366,895 of total taxable income. The Applicant has maintained throughout the audit, objection, and appeal process that the Relevant Deposits do not represent income according to ordinary concepts and are personal transactions.

1. The extent of corroboration required in any given matter is dependent upon a number of factors all of which are case specific. It is true that corroborating documentary evidence is not necessary (see references from paragraph ‎57 above). However, where there is an inherent implausibility, or a significant lack of specificity and detail, corroboration is important in order for an applicant to discharge their onus. The Tribunal heeds the remarks cited from paragraph ‎44 above, in particularly the working hypotheses referred to by Lee J.

1. The Applicant did not identify the "friend" that lent him $10,250. This evidence was unable to be scrutinised.

1. Some of the payments were from the Company to the Applicant. During the Relevant Years the Company transferred the following amounts (as outlined at paragraph ‎248 above):

(a) $464,176.98 into the Applicant's Home Loan Account; > > (b) $4,995 into the Applicant's American Express credit card account; and > > (c) $206,263.71 into the Applicant's ANZ credit card account.

2. The Applicant contends these Company Deposits are not income earned from services rendered to the Company but rather the repayment of the 2009 Loan and 2010 Loan the Applicant made to the Company. The Applicant's evidence on these transactions is set out from paragraph ‎118 above.
3. The issue of substantiation and proof in relation to purported loans arose in the recent decision of Logan J in Anglo American. Anglo American was concerned, among other things, with whether a taxpayer failed to establish on the balance of probabilities that purported loans were made. It was the responsibility of the taxpayer to demonstrate on the balance of probabilities that there was a loan.[200]
4. The evidence before Logan J was oral and written evidence of the taxpayer. There were no substantiating loan documents. Although Logan J noted (at [123]) that the "absence of a document", such as a loan agreement, "evidencing, in this instance a legal relationship occasioning the indebtedness claimed ... is not fatal", it does become problematic in circumstances where there are inconsistencies in the evidence which does exist.
5. The Applicant states that these "loans" were repaid by the Company to him between 1 July 2013 to 30 June 2015. The loans were repaid to either the Applicant's Home Loan account, American Express account, or his ANZ credit card account.[201]
6. The Applicant submitted that his evidence that the $244,000 of loans transferred from his personal account to the Company's bank account (and later purportedly reimbursed to him) was not challenged in cross-examination.[202]
7. The difficulty with treating the $244,000 as loan repayments is that there is no corroborating evidence of a loan.
8. There is a record, from the bank statements, of:

(a) $109,800 being transferred from the Company to the Applicant four months after the Applicant transferred $100,000; and > > (b) $53,300 being transferred from the Company to the Applicant two months after the Applicant transferred $144,000.

9. There was no explanation provided for the timing of these payments. As referred to above (from paragraph ‎264) the typical indica of a loan are not found.
10. Mr Wright could not explain whether these repayments had already been taken into account in calculating a purported loan balance of $244,000 as at the date of the Accident.
11. It is impossible without more information to know how to treat these amounts - are they loans? Are they deemed dividends (Div 7A)? What is the actual amount (if any) of the loan balance?
12. The Applicant's previous tax agent considered this money as income of the Company in ITRs. The Applicant told Mr Wright in March 2023 that ASJR had overstated the Company's income by the $244,000.[203] Why would ASJR have overstated this? In a letter to the ATO the ASJR representative gave the following explanation:[204]

...some amendments were necessary to correct some anomalies, which previously had involved some lesser experienced accountants acting on insufficient information...

13. The representative wrote that the "variations on declared income were as a result of errors, misunderstanding and confusion".[205]
14. No detailed explanation was provided about how the "misunderstanding and confusion" arose other than the Applicant instructed them differently.

1. During the Relevant Years the Applicant engaged tax agents and accountants (ASJR) to advise and assist him in the preparation of financial statements, records and ITRs for himself and the Company in accordance with his instructions and records.[206]
2. No one from ASJR, former or current, appeared at the hearing or gave evidence. The Applicant states this is because he had been in a dispute with them over fees which resulted in settled court proceedings.
3. There are no corroborating documents recording the Applicant's instructions or queries or the tax agent's advice or queries of the Applicant. It is highly unusual for there to be no record of advice given - such as in a letter or email. Given that the advice was supposedly relied upon, why was a copy of that advice not retained? The Tribunal appreciates that over 10 years has passed, and this may explain why there is a lack of contemporaneous material, but this does not mean that the evidence of the Applicant can simply be accepted without question.
4. The Applicant did not say he provided a copy of his credit card statements to ASJR or that any analysis of his records was undertaken by the tax agent prior to giving advice that they were not relevant for tax purposes. It is the expected and prudent course for a tax agent to obtain supporting documents and records if there are any grounds to doubt the information provided or to make reasonable enquiries to satisfy themselves as to the completeness and/or accuracy of that information.[207] The Tribunal does not have the information, but it would be considered careless of a tax agent of reasonable standing to not request additional information from the Applicant before definitively providing the advice the Applicant states he received.

1. During cross-examination the Applicant was taken to various bank account/credit card statements he had supplied and questioned about a sample of activities.
2. It was apparent that the Applicant could not specifically recall each transaction but rather had a general recollection of what he "believes" was the case. He might have or someone else may have taken the money from his safe to physically deposit the cash into his accounts. He does not adequately explain the logistics of how this was done.
3. There was no evidence of any security measures taken for the person "carrying" the cash to the bank. A large number of the Relevant Deposits are in the $9,000 range. On 24 July 2014, $9,700 was deposited onto the Applicant's credit account in cash. If all the money tendered were $50 notes, the person making the deposit would have been carrying 194 $50 notes. There is no evidence of how this money was taken from the safe to the bank - By car? By foot? In what kind of carry case? In July 2014 two deposits were made: $9,700 on 24 July 2014 (deposit number 89) and, five days later on 29 July 2014, a further $9,900 (deposit number 90) totalling $19,600.[208] Why were two separate deposits made so close together? This was not explained. Why was the money deposited not a miscellaneous mixture of bank notes (given it had purportedly been received from miscellaneous reimbursements)? The records available show the deposits were often made up of $100 and $50 notes.[209]
4. One cannot simply avoid their burden of proof by asserting everything was undocumented and all transactions were in cash. There is an inherent risk associated with proceeding in that manner.
5. The Tribunal finds that it is unusual to operate in such a way that you are storing such significant amounts of cash, which is not income, in a safe. It is unusual because, unlike a bank, there are inherent security risks, no interest is earned on the cash, and it may not be covered by insurance.
6. The Applicant did not explain why he first put the cash reimbursements in the safe before depositing the money in the bank.
7. The Tribunal is not satisfied on the balance of probabilities that the Relevant Deposits were personal reimbursements. The Applicant, and other witnesses, on their own oral evidence, were not certain of the purported claims. These difficulties of recollection and in the Applicant's case - his not recalling the transaction or reimbursement at all - does not give the Tribunal sufficient confidence to accept the Applicant's submissions.

1. The Applicant kept no records of reimbursements and monies owed in relation to in excess of $700,000 that he says he was paid by family and friends during the Relevant Years. For most people, lending this amount and having this amount of money outstanding would never be possible. During the Relevant Years the Applicant submits his taxable income was $143,172.82 for the 2011 Year, $175,001.04 for the 2012 Year, $102,981.04 for the 2013 year, $41,667.10 for the 2014 Year and $6,878.75 for the 2015 Year. Given this level of income, how was he in such a position to lend and carry such outlays for others, when he would also have had his own personal expenses (groceries, insurance, fuel etc) to pay? This was not explained.
2. He kept no records of money coming in and out of the safe.[213]

1. The Applicant's evidence regarding monies received from sale of his Wife's business was unpersuasive and unreliable. In the written statement the Applicant stated his wife said to him words to the effect that she sold her business for around $90,000.
2. It was put to the Applicant that the records of LPFH do not show the sale of a $90,000 business and that if they had, it would probably have triggered the need to lodge an ITR. The Applicant responded, "Yes, okay. Maybe I made a mistake then".[214]
3. In cross-examination, when it became apparent that according to ATO records there is no reporting of the sale by the Company in an ITR, he said he did not know if the business had been sold for $90,000 and was unsure whether she had been paid at all.[215]
4. Given this evidence the Tribunal is not satisfied what amount was received by the Applicant in relation to the sale of his Wife's business, whether any payment was received in the Relevant Years, and whether any amount of that money relates to the Relevant Deposits.
5. Given that his wife purportedly sold the business in 2011, it is also not clear how it was that the Applicant lived off his wife's income after 2013 (see Family Finances section at paragraph ‎119).

1. There was some confusion in the Applicant's evidence regarding the Etihad Box. His written evidence was that he had used the Etihad Box throughout the Relevant Years and had been reimbursed by family and friends during those years.
2. However, it is apparent from the Licence Deed that:

(a) the Company, not the Applicant, was the licencee of the Etihad Box; and > > (b) the licence was for only for the 2010 calendar year.

3. The Applicant could not have been reimbursed by family and friends for the use of the Etihad Box during the 2012 to 2015 financial years. As a result of this error by the Applicant it means his evidence as to the likelihood of amounts received and whether and how many people he let use the Box, is unreliable. Further, this "error" by the Applicant appears to have contaminated some of the other witnesses' evidence. Every witness who stated they attended the Etihad Stadium referred to having attended in years following 2010. This is because their written statements had presumed the Applicant had access to the Etihad Box throughout the whole period. Any why had they assumed this? An inference can be drawn that they gave this evidence because that it was the Applicant told them. It makes this evidence of the Applicant and those witnesses questionable and therefore unreliable.
4. Inconsistent with the fact that the Etihad Box was only used by the Applicant for the first half of the 2011 financial year, the Applicant's statement purported to attach "invoices for the Etihad Stadium Box between 1 July 2010 until 30 June 2015".[216] The invoices provided were only for the 2010 calendar year and were addressed to the Company, not the Applicant.
5. In relation to the MCG Box there was also confusion regarding whether the licensor accepted cash payments or credit card payment only. The Applicant's evidence in relation to MCG catering and expenses was that MCG did not accept cash and would only accept a single credit card payment.[217] However, an email from the MCG box caterer to the other licencee of the MCG Box, LPPE, indicated the MCG, at least on one occasion, accepted cash.[218] This creates an element of doubt as to whether the guests attending the box ever paid for their own food and drink using cash. Mr C gave evidence that on occasion he paid the stadium directly for food and drink and that he would pay the stadium using his credit card.[219] If this evidence is accepted the Applicant did not necessarily always receive money from friends and family to cover box catering.
6. The Applicant said_, "[m]ost of the time I paid for the MCG corporate box expenses on my credit card and Mr Aprille gave me cash to cover the expense of the corporate box"_. At the hearing he could not recall Mr K ever giving him cash. He told the Tribunal that this is what was in his statement but he did not remember any of it.

1. The Applicant's evidence was that he purchased flights for at least 24 different people during the Relevant Period; not including his Wife and their two daughters.[225]
2. The Tribunal accepts that the Applicant paid for some flights, miscellaneous items, and other travel expenses. The records produced are sufficient to corroborate this assertion.[226] But that is not the end of the matter.
3. The Applicant took no security from any of the "borrowers". He charged them no interest. He gave them no receipt for the cash payments and no witness said they asked for one. None of the witnesses called produced any records to verify the payments they say they made to the Applicant.
4. Given the evidence, the Tribunal is unsure whether there was any payment received, whether any payment was received in the Relevant Years, and whether any amount of that money relates to the Relevant Deposits.
5. The Tribunal agrees with the Commissioner's submissions that no reimbursement should be allowed for flights or travel expenses in circumstances where:[227]

175.1. where the Applicant cannot establish by evidence that he paid for them, e.g. Appendix B, expense numbers 1, 61, 62, 67, 71 and 72; Appendix C, expense numbers 21, 29, 30 and 31; > > 175.2. to the extent the expenses were incurred by the Applicant for his own use or the use of his immediate family e.g. Appendix B, expense numbers 2, 3, 4 and 23; Appendix C, expense numbers 1, 2, 7, 8, 9 and 10; > > 175.3. where the passenger/recipient cannot be identified e.g. Appendix B, expense numbers 20, 42, 70 and 75; > > 175.4. where the passenger/recipient has not given evidence that they reimbursed the Applicant, e.g. Appendix B, expense numbers 2, 3, 4, 5, 11 and 14; Appendix C, expense numbers 1, 3, 6 and 7; > > 175.5. where the passenger/recipient was [Mr E], because it is submitted that his evidence should not be accepted as reliable, see [134] above, e.g. Appendix B, expense numbers 25 and 26; > > 175.6. where the passenger/recipient was [Ms T] because it was her evidence that she is still repaying the Applicant and she was unable to say how much she repaid during the Relevant Years, e.g. Appendix B, expense numbers 38, 44, 66 and 67; Appendix C, expense numbers 5, 15, 16, 18 and 19;

1. The Applicant states he also spent $31,898.80 on flights for Mr K's family to travel overseas using his credit card. This was not corroborated by Mr K. There is no reference to any flight purchase being incurred for Mr April or his family in Mr K's statement. The Applicant stated he paid for other travel expenses for Mr K on his credit card and Mr April reimbursed him in cash. This was also not corroborated by Mr K.

1. The Applicant states that between 2011 and 2015, he paid for hire cars for and on behalf of friends and family and then was paid back in cash.[228] There are no details or specifics provided. There is no corroborating evidence from any other witness.
2. The Commissioner identified five contemporaneous documents relating to four car hire events in the material before the Tribunal which are summarised in Appendix D to the Commissioner's Closing Submissions.
3. The documents do not reference anyone other than the Applicant. That is, on their face they do not indicate that hire car expenses were incurred on behalf of another. The Applicant claims they were for Ms T but during the hearing Ms T denied ever reimbursing the Applicant for car hire.[229]
4. Given this evidence the Tribunal is not satisfied what, if any payments were received by the Applicant by way of reimbursement for this category of expenditure, whether any payment was received in the Relevant Years, and whether any amount of that money relates to the Relevant Deposits.

1. The Applicant's evidence on this category of expenditure was extremely vague. The Tribunal appreciates some of these transactions may have occurred some time ago. The Tribunal is not satisfied that the Applicant has any recollection of these items.
2. Only two witnesses were called to corroborate this part of the Applicant's evidence. The Tribunal did not find Mr U to be very reliable for reasons outlined below. Ms T appeared credible but was unable to particularise amounts.
3. The overall problem is there is no way of knowing with any sufficient accuracy the amount of the Relevant Deposits which relate to credit card purchases made for friends.
4. Given this evidence the Tribunal is not satisfied what, if any payments were received by the Applicant by way of reimbursement for this category of expenditure, whether any payment was received in the Relevant Years, and whether any amount of that money relates to the Relevant Deposits.

1. In relation to the Holden Astra the Applicant told the Tribunal he had no recollection of the sale and that his evidence was based on what Mr U told him during a telephone conversation. This is contrary to Mr U's evidence that the Applicant reminded him about the cars and jet skis.[230]
2. The Applicant kept no records at the time and said he transferred the vehicle but provided no motor vehicle search records. The Applicant also admitted he did not recall Mr U giving him money.[231] The Applicant stated the Holden Astra was purchased in 2004 and might have been in the Company's name.
3. In relation to the Mercedes Benz the Applicant told the Tribunal he does not recall the sale to Mr I and said Mr I told him that it happened.[232] The Applicant said he purchased the Mercedes Benz in 2009 and registered it in the Company name. The Applicant provided no records and said he did not officially transfer the vehicle to Mr I.[233]
4. At the hearing the Applicant acknowledged he only remembered the details of the jet skis because a search reminded him. He said he did not recall owning two jet skis at the same time and does not recall being paid but knows he would have received the money. The Applicant had no records in relation to a transfer and could not recall transferring the registration of the jet skis to Mr U.[234]
5. In relation to the Holden Maloo, at the hearing the Applicant said he purchased the car in 2008 in the Company's name. He did not remember officially transferring the car registration and admitted not recalling the receipt of any cash payment from Mr U. He acknowledged having no independent recollection of this transaction.[235]
6. There is no documentation of ownership of any of the motor vehicles prior to their purported sale and no evidence of actual transfer of ownership. A motor vehicle register search could have demonstrated this, but nothing was presented to the Tribunal.
7. At the hearing the Applicant told the Tribunal:

(a) he could not recall the sales; > > (b) he could not recall transferring title or registration; and > > (c) he could not recall receiving cash from Mr U or Mr I.[236]

8. The Tribunal finds this evidence does not sufficiently corroborate the Applicant's contentions.
9. Given this evidence, and the findings made regarding Mr U and Mr I, the Tribunal is not satisfied what, if any payments were received by the Applicant by way of reimbursement for this category of expenditure, whether any payment was received in the Relevant Years, and whether any amount of that money relates to the Relevant Deposits.

The Applicant's evidence of the Property Sale was confusing. The contract of sale is dated 23 January 2008.[237] The particulars of sale provide the following:

1. The deposit is stated to be due after the balance, and the deposit and the balance are for the same amount, and do not add up to the sale price. No explanation was given for this during the hearing. When asked if he received $288,000 (i.e. $360,000 less $72,000) he said "I don't exactly recall, but I know it went in there."[238]
2. The Applicant was then asked for the particulars of how that payment occurred. This is the exchange with Ms Lee of counsel:[239]

How did he give it to you?---Hm? > > How did he give it to you?---I don't know how he would have given it to me. > > Did he come to your house?---Probably (indistinct) maybe. > > And you carried $72,000 in cash from his house to yours?---Probably not, because I would have been worried about getting pulled over. > > So what did you do?---No, maybe I did carry the whole lot with me, but no one knew about it. That's the difference. When you deposit it into bank accounts there's a record there showing how much you put in. > > ... > > Did you discuss the payment? Would you agree - sorry, would you agree $72,000 is a significant sum in cash?---Yes. > > Did you discuss how the $72,000 ought to be paid to you?---No, because he would have just given it to me, I suppose, when he had it. > > Did you write him a receipt?---Maybe I would have, yes. > > Do you have it?---No, if I run into him, he would have it. > > Did you keep a copy?---No. > > And on receiving the $72,000, what did you do with it?---Well I would have put it in the safe. > > Why didn't you bank it?---Well it was cash, I put it in the safe. > > Cash is not bankable, sorry?---That's personal money. That's personal money.

3. None of this evidence was credible. It certainly did not describe how two people at arm's length would reasonably be expected to conduct themselves during a substantial transaction.
4. The Applicant told the Tribunal the vendor finance arrangement whereby the Applicant provided $72,000 to the purchaser was undocumented and was a "handshake agreement".[240]
5. This seems unusual given that the parties were prepared to enter a written contract of sale. Why would the purchaser not want this documented? Mr P did not give evidence and when asked why, the Applicant's response was "he just doesn't want to".[241] No reason for why he did not want to give evidence was proffered. It is open to the Tribunal to infer that his evidence would not have been favourable to the Applicant.
6. The Applicant could not recall how the $72,000 was transferred. During cross-examination the Applicant suggested he may have received the entire amount in cash.[242] This seems highly unusual. There is no receipt.[243] There is no evidence from the person who purportedly gave him this large sum in cash. It seems like a very high-risk undertaking that would be outside the realm of a "normal" business dealing. This makes it inherently improbable.
7. There are no contemporaneous records of this payment.
8. Given this evidence the Tribunal is not satisfied what, if any payments were received by the Applicant by way of reimbursement for this category of expenditure, whether any payment was received in the Relevant Years, and whether any amount of that money relates to the Relevant Deposits.

1. The Applicant's evidence in relation to the Mortgage Facility Loan was unpersuasive. The friend was not identified. There was no corroborating statement or documentation.[244]
2. In his statement the Applicant stated he repaid his friend the $9,000 over time.[245] During cross examination he stated:

(a) he remembered making the deposits of $9,000 and $1,250; > > (b) the $1,250 would have come from his safe;[246] > > (c) he borrowed the $9,000 from his friend;[247] > > (d) he repaid the loan of $9,000;[248] > > (e) the loan was not documented because "[w]e don't write document when you lend money off friends. Just tend to remember".[249]

3. When pressed, his memory was not as strong as portrayed in his statement.[250] He could not remember if he made the deposit and he guessed the money came out of his safe.[251] He told the Tribunal he did not know who took the money out of his safe.[252]
4. At the hearing the Applicant said he did not recall how and when he repaid the loan.[253] When asked what the source of the $1,250 was the Applicant stated, "[t]o be honest...I don't remember".[254]
5. The Applicant provided no corroborating documentation of this "loan".[255]
6. Given the evidence the Tribunal is not satisfied what, if any payments were received by the Applicant by way of reimbursement for this category of expenditure, whether any payment was received in the Relevant Years, and whether any amount of that money relates to the Relevant Deposits.

1. The Applicant accepts that the declared rental income was understated by $200 in his 2015 ITR.

1. At the hearing new evidence was given by the Applicant regarding some deposits made into his account. In relation to deposit numbers 25 to 27 totalling $27,870 (referred to above at paragraph ‎199), the Applicant states that Mr C deposited that money into his bank account o[256]is behalf.256
2. The Applicant stated at the hearing that:[257]

(a) deposit numbers 25 to 27 totalling $27,870 did not come from his home safe but from money he borrowed from Mr C or money obtained in relation to the MCG Box; and > > (b) deposit numbers 91 to 93 totalling $19,000 were made by Mr C either as a loan or from the MCG Box.[258]

3. There are no records to substantiate the Applicant's evidence.[259]
4. At the hearing Mr C could not recall:[260]

(a) when the Applicant repaid the loan; or > > (b) making the deposits.

5. Mr C was not someone the Applicant originally stated had access to his safe.
6. Given this evidence the Tribunal is not satisfied what, if any payments were received by the Applicant by way of reimbursement for this category of expenditure, whether any payment was received in the Relevant Years, and whether any amount of that money relates to the Relevant Deposits.

1. At the hearing the Applicant could not confirm whether his written evidence about a joint venture was correct. The 2014 financial statements for the Company show sales of $9,147.06 as the total income.[261] There is no reference to this in the 2015 statement.[262] The Applicant said:

It must be a mistake then, or something. I don't know where I got that from. But I'm sure it wasn't intentional - that amount.[263]

1. During the hearing it became apparent that in the Company bank accounts there is reference to some transactions whereby the Company paid amounts to a credit card ending #3217.[264] The Applicant states this credit card is his and was used for personal expenses. The Applicant states he made attempts to obtain relevant bank statements, but Westpac no longer has copies.[265]
2. Without corroboration this evidence is not accepted. There is a letter from Westpac to the ATO dated 6 October 2016. In that letter Westpac identified the credit cards and account held in the Applicant's name. There is no reference to a credit card #3217.[266] It was accepted by the parties that the letter was incorrectly dated.[267]
3. The Applicant told the Tribunal an employee of Westpac Bank told him that he had a Westpac credit card account ending 3217 but he was unable to name the employee. The note produced by the Applicant, purportedly prepared by the Westpac employee, was handwritten on the back of a page with the header 'Branch record' and the Westpac logo. The note does not state its author or the name of the account holder.[268]
4. The Applicant did not inform Mr Wright of this account when he was preparing his statement. The likely inference for this is because it was not his personal credit card. As a result Mr Wright did not treat transfers from the Company's account #1165 to account #3217 as transfers to the Applicant.

The Applicant's Overall Lack of Recollection/Other Issues

1. At the ATO audit interview on 9 October 2017, the Applicant admits he did not recall all the airfares, corporate box catering, hotels, and general expenses that he paid for between 2010 to 2015 using his credit cards.[269] The Applicant wants the Tribunal to accept he now does have that recollection. The basis for his remembering was not explained. The audit interview was in 2017, only several years after the Relevant Years, when these transactions took place.
2. Other issues which chip away at the reliability of the Applicant's evidence are:

(a) his inability to explain the information contained in the Company's loan accounts; > > (b) his questioning of the accuracy of his own witness statement on at least two occasions;[270] > > (c) his subsequent discovery or recollection of a different credit card number; > > (d) the evidence from Mr R that the Applicant wrote (or caused to be written) his statement. It is correct that this was not put to the Applicant, by virtue of the timing of the evidence, however, Mr R stated that a number of paragraphs in his statement were simply factually incorrect, a matter of which he was clearly adamant of at the hearing. The Commissioner identifies that the impact of the deleted paragraphs is significant[271] - the statement referred to some $124,800 of purported cash reimbursements being paid by Mr R to the Applicant. Mr R said he did not make these payments because he never attended the Boxes. Therefore, the statement evidence cannot be used to corroborate $124,800 of the Relevant Deposits.

3. When the Applicant's evidence is scrutinised and tested, it is unreliable.
4. The Applicant's evidence was vague and general in nature and lacked any specificity. There were no contemporaneous records of the reimbursements.
5. The Tribunal doubts the veracity of the Applicant's evidence given the inconsistencies in the evidence as already outlined concerning:

(a) the Etihad Box; > > (b) whether the Boxes accepted cash payments; > > (c) who paid what and when; > > (d) who made deposits into the Applicant's accounts from money taken from the safe; > > (e) Whether "deposit numbers 25 to 27 totalling $27,870 and 91 to 93 totalling $19,000 have been sourced from MCG box reimbursements" in circumstances where there is no evidence the Applicant, rather than the Company, paid the invoices.[272] Further, it is unclear what MCG invoices the deposit numbers 25-27 would have related to - "MCG catering invoices in 2011 were incurred from 28 August 2011 ie. after 23 August 2011 when the deposits totalling $27,870 were made)";[273] > > (f) who had access to the safe; > > (g) the unlikelihood of the Applicant carrying $72,000 in cash from the Property Sale when his evidence was he believed that it was illegal to carry $10,000 or more of cash; > > (h) the Applicant's own representations of taxable income. In his witness statement the Applicant stated his total taxable income in the 2011 Year was $71,428. This is contrary to the income amount he declared in a loan application. In a loan application he declared his income was approximately $400,000.[274] The only "explanation" the Applicant offered for this apparent disparity was "this is what I thought I was making".[275]

6. In these circumstances the Applicant's evidence is unreliable and is rejected. There is also serious doubt as to whether the witness statements of Mr U, Mr I and Mr E were fabricated by the Applicant. The evidence of those three witnesses was also unreliable as outlined above.
7. Only the Applicant could possibly give direct evidence of the receipt of the reimbursements and the Relevant Deposits and the link between the two.
8. The Applicant conceded at the hearing he had no independent recollection of the events. His evidence was as follows:[276]

I don't recall that way back. I go by - everything that I wrote in my statements is going by what I found online, on paper. It's not because I remember any of it. It's because I've seen it on paper and I - that's how I come to the conclusion of all the - whatever I wrote in my statement

9. If the Applicant cannot be sure of the source of the Relevant Deposits, how can the Tribunal be satisfied.

1. Mr U's evidence was unconvincing.
2. When pressed about how he could afford to spend so much money (i.e. how did he pay the Applicant), he said he got the money from his mother. Mr U told the Tribunal his mother has since died. One of the items Mr U states the Applicant purchased for him was a drone costing $2,000 to $2,500.[277] There are no corroborating records of this purchase, no photographs of the drone. Mr U said his mother thought he was using the money he borrowed from her for the drone to buy car parts, admitting he was not always truthful.[278]
3. Mr U kept no records of his purchases, payments to the Applicant or any other material which would corroborate his evidence.[279]
4. Mr U presented no records or explanation of his mother's financial situation which enabled her to give this money to her son. It was clear from the evidence that Mr U would not be able to repay his mother. Mr U lived with his mother at the time so presumably she would have seen the items purchased and been aware that Mr U had purchased a drone.
5. Mr U told the Tribunal he was illiterate and had the Applicant write his first statement. He said he told the Applicant what to write.[280] Mr U said he did not include any reference to the purchase of the jet skis and motor vehicles in his first statement "because GNBF didn't tell [him] what to write the first time".
6. The Tribunal finds Mr U's evidence unconvincing.

1. The Tribunal found Mr M to be a credible witness. Mr M gave consistent evidence to his written statement during cross-examination.[281]
2. He appeared to provide what records he still had to indicate at least some of the flights he states the Applicant purchased for him. The flight records provided clearly indicate they were emailed to the Applicant. The Tribunal accepts that on the balance of probabilities this was because the Applicant arranged and paid for the flights.
3. At the hearing the reason he gave for the Applicant arranging these flights for him was because he had exceeded his credit card limit and was staying with the Applicant at the time. He stated that he repaid all of the flight purchases before he left to go home in April 2015.
4. Some of the records provided by Mr M were duplicates - for example, Annexures 3, 4, 8 and 9 to his witness statement.

1. Mr L's evidence regarding his attendances at the Box cannot be correct because it became apparent at the hearing, and was accepted by the Applicant, that the Etihad Box was only hired during the 2011 financial year. When Mr L was informed of this at the hearing he stated he does not recall exact dates.[282]
2. Even if he did attend during the 2011 financial year, the evidence about how many times he attended was vague.
3. Mr L presented no records to show any payments were made to the Applicant for flights or amounts withdrawn from his bank account to pay for the Box attendances. At the hearing Mr L could not recall how many flights the Applicant paid for on his behalf.
4. Mr L did not recognise a redacted Virgin Blue reservation Tax Invoice and Travel Plan dated 2 July 2010 claimed by the Applicant to be his.[283]
5. Mr L sought to give evidence regarding whether to the best of his knowledge his parents also paid the Applicant back in cash. This can be given little weight given it is hearsay evidence and not corroborated by his parents.
6. The Tribunal finds little weight can be given to Mr L's evidence in total.

1. Mr G's evidence regarding his attendances at the Etihad Box cannot be correct because it became apparent at the hearing, and was accepted by the Applicant, that the Etihad Box was only hired during the 2011 financial year.
2. When informed that the Applicant only had access to the Etihad Stadium for the 2010 calendar year he responded that he might have got the dates wrong. He said the dates and number of times he attended the Box as set out in his statement was "all ballpark". He said:[284]

I can't tell you how many times I've been there, exactly what day I went there and what day I didn't go there.

3. Mr G conceded he could not recall specifics although he said he generally attended during the AFL football season.
4. Mr G presented no records showing any payments were made to the Applicant for flights or amounts withdrawn from his bank account to pay for the box attendances. When asked why he paid cash instead of transferring the money he said, "cash is king".[285]
5. The Applicant did not provide any travel documents purporting to relate to Mr G.
6. The Tribunal finds Mr G's evidence is of little probative value.

1. Ms T is the Applicant's mother-in-law.
2. Ms T's evidence regarding her attendance at the Boxes was vague and uncertain.
3. When she was informed that the Applicant did not have the Etihad box after 1 January 2011, she said:[286]

Well, I must've got it wrong... I know I went a couple of times, yes.

4. In relation to flights and accommodation, she was unable to recall dates. Given the passage of time this is understandable.
5. The Tribunal considers it is plausible, given she was the mother of the Applicant's wife that the Applicant may have on occasion paid for her flights and travel expenses. But there is an insufficient lack of detail and a lack of persuasive evidence linking these expenditures to the Relevant Deposits.
6. In relation to the Applicant's evidence that Ms T had access to the Safe, the Tribunal notes that Ms T did not know the Applicant had a safe, let alone have access to it to make deposits into bank accounts on the Applicant's behalf.[287]
7. Ms T presented no records to show she made any payments to the Applicant.
8. The Tribunal finds Ms T's evidence is of little probative value.

1. Mr C's evidence regarding his attendances at the Etihad Box could not have been correct. He said he attended 50 AFL matches and two concerts over the Relevant Period and had paid the Applicant approximately $26,000.
2. When Mr C was informed that the Applicant did not have the Etihad box after 1 January 2011, he said:[288]

3. Even if he did attend during the 2011 financial year, there is no clear evidence about how many times and how much he paid the Applicant for those attendances.
4. The Tribunal finds Mr C's evidence regarding what he paid the Applicant unreliable given it is unclear how many times, if any, he attended the Etihad Box.
5. Regarding the access to the safe, the Tribunal is sceptical of Mr C's evidence. Mr C made no reference to the Applicant's safe in his written statement and the Applicant made no reference in his written evidence to Mr C either having access to his safe or banking money on his behalf. Mr C's name seemed to be proffered on the run by the Applicant when questioned about who made the cash deposits from his safe given that he and his family were overseas.
6. The Tribunal finds that this evidence from Mr C is unreliable and appears to have been given to assist the Applicant by attempting to corroborate the Applicant's oral evidence regarding the deposits of cash from his safe.

1. Mr E's evidence regarding his attendances at the Box cannot be correct because it became apparent at the hearing, and was accepted by the Applicant, that the Etihad Box was only hired during the 2011 financial year.
2. Even if he did attend during the 2011 financial year, the evidence about how many times and how much he paid the Applicant was vague or non-existent.
3. In terms of the amount he purportedly paid the Applicant, according to his evidence Mr E paid $3,750 to $6,000 over the Relevant Years. Mr E presented no records showing any payments were made to the Applicant for flights or amounts withdrawn from his bank account to pay for the Box attendances.
4. The Respondent tendered ITR lodgement records of Mr E on the basis that it records the income declared for the Relevant Years,[289] which are probative to whether he was working and whether he potentially had the income to pay the Applicant as claimed. The ATO records indicate that Mr E did not lodge an ITR between the 2011 and 2014 financial years, and that for the 2015 financial year, an ITR was not necessary.
5. Mr E was asked about the source of his cash to pay the Applicant in light of this, and declined to answer on the ground of privilege against self-incrimination.[290]
6. The Tribunal finds Mr E's evidence is of little probative value.

1. If Mr B's evidence was accepted, he would have paid the Applicant between $36,000 to $75,000 for his Etihad Box attendances between 2011 and 2015. This cannot be correct because it became apparent at the hearing, and was accepted by the Applicant, that the Etihad Box was only hired during the 2011 financial year.
2. Mr B presented no records showing the withdrawals of $3,000 to $5,000 cash from his accounts that he would have made in order to pay the Applicant.[291]
3. The Tribunal finds that this evidence from Mr B's is unreliable and appears to be fabricated to assist the Applicant by attempting to corroborate what was in the Applicant's written statements.

1. Mr I's evidence was that he estimated he attended the Etihad Box six times a year across 2010 to 2012 paying the Applicant $1,200 to $1,500 each time being $7,200 to $9,000 per year.[292] When told the Applicant did not have the Etihad box after 1 January 2011, he said he did not recall exact dates.[293]
2. Mr I presented no records showing any payments were made to the Applicant.
3. The Respondent tendered ITR lodgement records of Mr I on the basis that it records the income declared for the Relevant Years,[294] which are potentially probative of whether he was working and whether he had the income to pay the Applicant as claimed. The ATO records indicate that Mr I did not lodge, or was not required to lodge, an ITR during the Relevant Years.
4. Mr I was asked about the source of his cash to pay the Applicant, Mr I declined to answer on the ground of privilege against self-incrimination.[295]
5. The Tribunal finds Mr I's evidence is of little probative value.

1. It is not a common occurrence for a witness to present at a hearing only to "walk away" from their written evidence. However, it is the correct thing to do under oath if that evidence was false.
2. Mr R told the Tribunal he had not read his statement before he signed it.[296]
3. It is apparent that the written statement filed in the Tribunal on Mr R's behalf was prepared by the Applicant and that the Applicant did so in an attempt to bolster his contention that the Relevant Deposits were in part made up of cash payments from family and friends who attended the Boxes. The evident similarity between all of the lay witness statements suggests one person was involved in their preparation. This inevitably resulted in most witnesses admitting during cross-examination they could not recall when, how much or how often they attended corporate Boxes or paid the Applicant, casting doubt on all of the witnesses' evidence regarding the corporate box arrangements. Mr R was the only witness to go further and say he did not attend the Box or pay the Applicant.[297] The Tribunal accepts this evidence.

1. Mr J's evidence regarding his attendances at the Box cannot be correct because it became apparent at the hearing, and was accepted by the Applicant, that the Etihad Box was only hired during the 2011 financial year.
2. Even if he did attend during the 2011 financial year, the evidence about how many times and how much he paid the Applicant was vague or non-existent.
3. The Tribunal finds Mr J's evidence is of little probative value.

1. Mr K's evidence regarding the length of time the Applicant had hired the box was incorrect. It was accepted at the hearing by the Applicant that the Etihad Box was only hired during the 2011 financial year. When told the Applicant did not have the Etihad box after 1 January 2011, he did not revise the evidence he gave.[298]
2. Even if he did attend during the 2011 financial year, the evidence about how many times and how much he paid the Applicant was vague or non-existent.
3. In relation to the MCG Box, shared with the Applicant, Mr K thought the Applicant paid his share of the licence fee directly to the MCG but was unable to say definitively whether that was the case.[299] Mr K did not recall paying the Applicant cash for use of the MCG Box.[300]
4. The Tribunal finds Mr K's evidence is of little probative value.

1. Mr I presented no records showing any payments were made to the Applicant.
2. The difficulty with the cash reimbursements is that there is no contemporaneous bank account entry or transfer to reconcile them with. The Tribunal was not satisfied that the witnesses, in particular Mr I, were about able to demonstrate that he had the funds to make the cash payments to the Applicant.
3. Mr I's answer to the source of his funds during the Relevant Years was an unidentified "sugar mumma" who paid him for his "time".[301] Mr I then said he could not remember when this sugar mumma arrangement took place nor how much he was paid.[302] The Tribunal is not satisfied with the lack of particularity of this evidence and considers it reliable.
4. Mr I also changed his evidence as to the year he bought the Mercedes, from 2010 in his statement, to 2008.[303]
5. In his updated statement dated 13 February 2024 Mr I stated he agreed to buy the Mercedes Benz from the Applicant in 2008. This is inconsistent with the Applicant's evidence that the Applicant only bought this car a year later in 2009. Mr I's response to this information was he could not give exact dates. Despite being sure of dates on 13 February 2024, by 22 February 2024 he was unsure. He also did not explain why he did not commence paying the Applicant for the vehicle until 2010 if he agreed to buy it in 2008.
6. Despite the lack of legal transfer from the Applicant, Mr I told the Tribunal that Mr F, who did not give evidence, was able to trade the Mercedes for another Mercedes at a car dealership.[304] This is uncorroborated and simply unbelievable. The Tribunal seriously doubts a Mercedes Benz dealership would trade-in a car from someone who could not prove ownership.
7. Ultimately Mr I said he did not know if it was the same vehicle.[305]
8. For the 2011, 2012, 2013, and 2014 financial years Mr I declared to the ATO he was not required to lodge an ITR.[306]
9. When asked again about the source of the cash given his ITR declarations he declined to answer on the grounds of privilege against self-incrimination.

1. There is no mention in Mr U's second statement regarding why he did not refer to the car and jet ski purchases in his first statement. At the hearing Mr U acknowledged that he had the Applicant write his supplementary statement for him but disagreed when asked if the Applicant told him to what write in his statement. Mr U stated he simply "forgot" about the cars and jet skis.[308] The Tribunal find this evidence implausible and unconvincing. The alleged amount Mr U paid the Applicant between 2009 and 2014 for the cars and jet skis combined was $140,000. This is not an insignificant sum of money, particularly for someone who could not afford to buy his own hobby items and a drone for $2,500. No explanation for why he needed to buy the vehicle, or three jet skis was given.
2. There are no records or documents confirming Mr U's ownership of the vehicles or payment for the vehicles. He said no-one told him to bring documents. He did not say if he could have brought any documents.[309]
3. There was no explanation in any of the written statements regarding where he obtained the cash to make these purchases. At the hearing, he gave different answers to how he came to have sufficient funds to pay for the car and jet skis. First, he said he had the money from selling bikes or borrowing from his mother. There is no corroborating evidence of this evidence. Then later he said he got the money from "work",[310] or from a friend who purchased one of the jet skis.[311] There is no corroborating evidence of what "work" Mr U was undertaking and how much he was earning for such work. No ITRs were lodged by Mr U during the Relevant Years.[312]
4. In his second statement, he said there were no transfer papers, yet at the hearing under cross-examination, he asserted the papers were done at a later time. There is no record of this.[313] "Recreational vessels" such as jet skis must be registered under the Marine Safety Act 2010 (Vic). Changes of ownership of motor vehicles must be notified to VicRoads within 14 days of the sale.

103 Exception: cross-examination as to credibility > > (1) The credibility rule does not apply to evidence adduced in cross-examination of a witness if the evidence could substantially affect the assessment of the credibility of the witness. > > _(2) Without limiting the matters to which the court may have regard for the purposes of subsection (1), it is to have regard to - _ > > (a) whether the evidence tends to prove that the witness knowingly or recklessly made a false representation when the witness was under an obligation to tell the truth, and > > (b) the period that has elapsed since the acts or events to which the evidence relates were done or occurred.

15. All parties acknowledge that the Tribunal is not bound by the rules of evidence and may inform itself on any matter in such manner as it thinks appropriate.[324] However, Perry J identified in Commissioner of Taxation v Rawson Finances Pty Ltd [2023] FCA 617 at [93] that:

...that does not mean that the common law rules of evidence may not guide an administrative tribunal in making findings of fact based upon material which is logically probative, bearing in mind that the rules of evidence are generally founded upon principles of common sense and fairness: Sullivan at [82]-[97] (Flick and Perry JJ).

16. Mr U is not on trial here, so to speak. Mr U has not made himself available to the Tribunal to be embarrassed or shamed by events in his past which occurred outside the Relevant Period. As a result the Tribunal only permitted a redacted version of the County Court judgment to be tendered which does not identify the nature of the crime or other matters other than Mr U's reported employment and fiscal status during the Relevant Years. A key issue in this matter is whether the Tribunal is persuaded that a portion of the Relevant Deposits comes from cash received from Mr U for the purchase of many items, most considerably vehicles. One way to be satisfied of the source of the deposits is to determine whether, on the balance of probabilities the person purporting to have reimbursed the Applicant had the means to do so. For that purpose, the Tribunal considers the redacted version of the County Court judgment admissible and may affect the reliability of Mr U's evidence.
17. The County Court judgment sets out that during the Relevant Years:

(a) Mr U worked odd jobs but had been mostly unemployed; > > (b) lived with his parents but his parents provided him with no money; and > > (c) by the end of 2014, he had a substantial debt.

18. This evidence substantially confirms the Tribunal's assessment of the unreliability of Mr U's evidence concerning his financial means and access to money.

1. At the hearing, Mr Wright confirmed that he did not look at any accounts or business records in making his assessment.[325] Mr Wright did not consider it relevant to look at any records and based his initial opinion on the Applicant's instructions and a letter from the Applicant's former accountant to the ATO.[326]
2. This demonstrates that Mr Wright has not brought any independent observation and assessment to the question of what the Applicant's assessable income was during the Relevant Period. Mr Wright simply relied on the Applicant's instructions that the deposits were personal in nature. Mr Wright acknowledged at the hearing he could not say whether the Relevant Deposits constituted assessable income or not.[327]
3. Mr Wright was asked several times in cross-examination why he did not amend his first statement when he later became aware of monies received by the Applicant from the Company.
4. Mr Wright was also asked why it was that in his second statement he no longer referred to the receipt of dividends despite financial records showing dividends were paid to the Applicant.[328] Mr Wright said those records were not available at the time he prepared the second statement. He said he assumed the reference to the approximately $86,000 transferred from the Company to the Applicant in the 2011 year included the dividends paid but he could not confirm as he did not have the general ledgers. There was no explanation for this assumption, nor was it clarified in his second statement. At the hearing he conceded that he did not know if he had accounted for the dividends in the assessment of the Applicant's income in his second statement.[329]
5. Mr Wright acknowledged he was not provided with any general ledgers in order to create loan accounts.[330]
6. In relation to the car sales Mr Wright accepted that:

(a) if a car had been owned by the Company (as the Applicant's evidence revealed), it should have been accounted for by the Company; and > > (b) if the Applicant used cash proceeds from sale of a company car to pay his own personal credit cards, those proceeds should have been taken into account in the calculation of the Applicant's actual taxable income.[331]

7. Mr Wright conceded at the hearing that he could not be certain that none of the Relevant Deposits are assessable as income in the Applicant's hands.[332]
8. Given the lack of independent assessment, the lack of attention to any relevant records and the fact that he simply accepted the Applicant's instructions that the Relevant Deposits (except deposit numbers 96 to 99) were not assessable income,[333] the Tribunal takes little guidance from Mr Wright's opinion.
9. At the hearing he accepted his calculations of actual taxable income were incorrect and he does not know the Applicant's actual income.[334]
10. During final submissions the Applicant informed the Tribunal that given that additional information had come to light since the preparation of Mr Wright's statements, they rely on what is set out in their submissions as to their assessable income and not Mr Wright's evidence.[335]
11. For the reasons outlined Mr Wright's evidence can be given little weight and did not assist the Applicant in discharging his burden in respect of the excessiveness or otherwise of the Amended NOAs, the Applicant's actual assessable income, or the nature and source of the Relevant Deposits.

1. It is for the Tribunal to make findings of fact. It is for the expert to provide opinions based on instructions and identified assumptions.
2. The Administrative Appeals Tribunal's Guidelines provide that an expert owes a duty to the AAT:

3. Duty to the AAT > > 3.1 A person giving evidence based on his or her special knowledge or experience in an area: > > has an overriding duty to provide impartial assistance to the AAT on matters relevant to the person's area of knowledge or experience; > > is not an advocate for a party to a proceeding.

3. Paragraphs 4.1 to 4.5 of the Guidelines set out the requirements for expert reports (which is essential the same as those set out in the Federal Court Rules, rule 23.13).
4. Mr Cerantonio's report did not follow the Guidelines.
5. Little weight can be given to Mr Cerantonio's report for the following reasons:

(a) it did not contain a letter confirming the instructions given to him and by whom; > > (b) it did not adequately detail the facts and assumptions relied on; > > (c) it did not adequately express the basis for his opinion - he provided no analysis.

6. As with Mr Wright, Mr Cerantonio determined "it would not be necessary to inspect the financial reports" of the Company given that the Applicant told him the transactions were personal in nature.
7. Mr Cerantonio simply accepted the Applicant's instructions.[336] Mr Cerantonio accepted during cross-examination that he could not vouch that:

(a) the Applicant had been "reimbursed" for expenses paid for others;[337] nor > > (b) any cash collected was deposited into a safe.[338]

8. Mr Cerantonio admitted the task of providing a forensic report in this matter was very difficult. He said:[339]

...it was an unusual task because of the lack of information, the unavailability of the information because over the strong period of time, and also the comments made by his previous accountants that there was no records kept because he considered it to be of a private and domestic nature. And therefore, it was very difficult to compile a forensic report with limited documentation for me to investigate or to vouch > > (emphasis added)

9. Mr Cerantonio told the Tribunal "[i]t was an unusual report because of the lack of information and supporting evidence available".[340]
10. It became apparent at the hearing that some of the work done in his report was actually prepared by members of his staff based on instructions his staff had obtained from the Applicant.[341] There are no records of these instructions or which items in his report had been prepared this way. When asked about some obvious errors or duplications, he could not, as a result, explain how they occurred.[342]
11. Mr Cerantonio's role was to form an independent expert view of the situation, not simply accept the instructions of the Applicant.
12. Mr Cerantonio has not brought any independent observation and assessment to the matter. Mr Cerantonio could only rely on the Applicant's instructions that the deposits were personal in nature.[343] The difficulty for Mr Cerantonio is that as he put it there was a "lack of information and supporting evidence".
13. At the hearing he acknowledged there were no general ledgers or financial records, other than bank statements, provided by the Applicant.[344] Despite his reported "findings", he acknowledged in cross-examination that he could not say whether the Relevant Deposits constituted assessable income or not.
14. Mr Cerantonio conceded he was:[345]

...not able to match the cash deposits with the re-imbursements of [corporate box] expenses paid by each attendee. This also applied in relation to expenses paid by [the Applicant] on behalf of friends in relation to overseas trips, interstate travel, accommodation and catering costs

15. In relation to the sale of the Mercedes, Maloo and Astra, Mr Cerantonio was informed at the hearing that the Applicant's evidence was that the cars had been owned by the Company, not the Applicant. Mr Cerantonio told the Tribunal that it affected his opinion because if the car was owned by the Company the money should have gone to the Company and not to the Applicant.[346]
16. The Federal Court in Glencore Investment Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia [2019] FCA 1432; 272 FCR 30 explained the issue that arises when experts make assertions of facts (at 129):

It is not the role of the expert to be an advocate for the party calling them nor to express views or speculate on matters about which the expert does not have specialist knowledge. An expert should make it clear when a matter falls outside his or her expertise. Experts need to exercise particular caution to avoid making assertions of fact which have no foundation, otherwise they are seen to be advocating a case rather than providing objective and impartial assistance. Unfounded or speculative reasoning may also undermine or diminish the persuasiveness and cogency of the opinions expressed by the expert on matters on which she or she is qualified to give an opinion, eroding confidence in the accuracy, reliability and objectivity of such opinions. > > (emphasis added)

17. There were also numerous errors within Mr Cerantonio's report (these have been set out in paragraphs 148 - 150 of the Commissioner's closing submissions), including recording Etihad Box expenses as being incurred after the 2010 calendar year despite it only being licenced for the 2010 calendar year.[347] Clearly this arose because Mr Cerantonio relied on the instructions of the Applicant rather than a source document such as the Licence Deed.
18. Mr Cerantonio acknowledged he could not vouch for reimbursements or repayments from the Company to the Applicant.[348]
19. At the hearing, when Mr Cerantonio was taken to the list of Relevant Deposits,[349] he told the Tribunal he could not vouch for the source of the money.[350] Mr Cerantonio also admitted he did not cross-reference travel booking confirmations, or licence fee invoices against the bank statements he was provided.[351]
20. In relation to the car sales, Mr Cerantonio said he was not instructed that the cars were registered in the Company's name and had simply accepted that proceeds from their sale should not be accounted for by the Applicant.[352]
21. For the reasons outlined Mr Cerantonio's evidence can be given little weight and therefore did not assist the Applicant in discharging his burden in respect of the nature and source of the unexplained deposits.
22. During final submissions, the Applicant informed the Tribunal that they rely on what is set out in their submissions as to their assessable income and not on Mr Cerantonio's report.[353]
23. It is not the obligation of the Tribunal to undertake forensic examination and interpretation of accounting material unassisted.[354] The abandonment of Mr Cerantonio's report for understandable reasons, and the fact that Mr Wright's report is of limited value, leaves the Tribunal in a position where it is solely left with the Applicant's evidence and submission as to the source and provenance of the Relevant Deposits. The Tribunal has found that many of the witnesses' evidence, including the Applicant's, was unreliable or at the very least insufficiently persuasive.

1. The Commissioner submitted that Jones v Dunkel inferences (Jones v Dunkel  [1959] HCA 8; 101 CLR 298) could be drawn from the fact that the following persons were not called by the Applicant to give evidence:

(a) the Applicant's wife; > > (b) Ms N or Mr O from ASJR; > > (c) the "friend" who loaned the Applicant $10,250; > > (d) Mr P; > > (e) others from whom the Applicant received reimbursements for personal expenses.

2. In Commissioner of Taxation v Rawson Finances Pty Ltd [2023] FCA 617; 116 ATR 458 Perry J explained the rule in Jones v Dunkel and its application as follows:

[83] The rule in Jones v Dunkel is also based on common sense, namely, that an unexplained failure by a party to call a witness may, in appropriate circumstances, give rise to an inference that the evidence of that witness would not have assisted that party's case:  Jones v Dunkel at 308 (Kitto J), 312 (Menzies J) and 320-321 (Windeyer J). While the rule may make certain evidence or the inferences which may be drawn from the evidence more probable, it cannot fill gaps in the evidence, or convert conjecture and suspicion into inference: Jones v Dunkel; Schellenberg v Tunnel Holdings Pty Ltd  [2000] HCA 18; (2000) 200 CLR 121 at [53] (Gleeson CJ and McHugh J). As, for example, Newton and Norris JJ held in O'Donnell v Reichard [1975] VicRp 89; [1975] VR 916 at 929 in explaining the proper manner in which the rule may be applied: > > ... where a party without explanation fails to call as a witness a person whom he might reasonably be expected to call, if that person's evidence would be favourable to him, then, although the jury may not treat as evidence what they may as a matter of speculation think that that person would have said if he had been called as a witness, nevertheless it is open to the jury to infer that that person's evidence would not have helped that party's case; if the jury draw that inference, then they may properly take it into account against the party in question for two purposes, namely:  > > (a)           in deciding whether to accept any particular evidence, which has in fact been given, either for or against that party, and which relates to a matter with respect to which the person not called as a witness could have spoken; and > > (b)           in deciding whether to draw inferences of fact, which are open to them upon evidence which has been given, again in relation to matters with respect to which the person not called as a witness could have spoken. > > > > > > > > > > > > > > > > > > > > > > (Tribunal's emphasis added)

1. The Applicant referred to Ms D and Mr H in his evidence as persons who attended the Etihad Box and for whom he purchased flights.
2. The Applicant also gave evidence (see paragraphs ‎121 and ‎293 above) regarding his Wife and the sale of her business.
3. Neither the Applicant's Wife, Ms D nor Mr H gave evidence at the hearing.
4. In relation to Ms D, there is no corroborating evidence before the Tribunal that:

(a) Ms D attended the Etihad Box and/or paid the Applicant for any attendance; > > (b) Ms D repaid the Applicant in cash for domestic flights he purchased on her behalf.

5. In relation to Mr H, there is no corroborating evidence before the Tribunal that Mr H attended the Etihad Box and/or paid the Applicant for any attendance.
6. The Applicant's Wife could have given evidence regarding the Business Sale and the use of the family safe. The Applicant explained that he had separated from his wife and was in the process of becoming divorced. There was no suggestion that this was not the case. In those circumstances it is understandable that she would not want to appear and give evidence, therefore no Jones v Dunkel inference ought to be drawn by her failure to appear. Despite not drawing any negative inference in relation to failing to call Mrs Applicant, the Tribunal finds inferences do not need to be drawn to damage the Applicant's case. The evidence that could have been given by these witnesses simply highlights the deficiencies in the Applicant's evidence and in the evidence before the Tribunal.
7. The Applicant's evidence is that he relied on advice from ASJR.[355] By contrast to this assertion, the letter from ASJR to the ATO in response to the audit states it was the Applicant's opinion the Relevant Deposits were not income. The tax agent does not state it was his opinion:[356]

The Applicant was and is of the opinion that personal transactions, those of the credit cards, being the reimbursement of his credit card expenditure by family and friends is not reportable in taxation returns, the transaction were not of a Business or lncome earning nature ... > > His comments to his accountant, was that we need not worry about his Credit Card Statements, it was all personal, non-business related.

8. The failure to call the tax agent leaves the Applicant's evidence/contention unable to be scrutinised (see Cassaniti, at [88]) and tested.
9. It is clear that there was a breakdown in the Applicant's relationship with his former tax agents which culminated in legal proceedings. The Tribunal will not draw an adverse inference from their failure to be called.
10. In relation to the "friend" who loaned the Applicant $10,250, the Applicant told the Tribunal, "he doesn't remember lending that to me".[357] In circumstances where the friend is not even identified, the Tribunal draws an adverse inference from the failure to call corroboration of the "Loan from a Friend".
11. In relation to the assertion that Mr P of GBMJ paid the Applicant $72,000 in cash for the reimbursement of a loan given by the Applicant for the deposit for the Property Sale:[358]

(a) there is no witness statement filed from Mr P; > > (b) the explanation given for his failure to be called or summonsed to give evidence was unsatisfactory.

12. Given the inherent implausibility of the Applicant's evidence, it would have been prudent to produce evidence from Mr P. An adverse inference can be drawn from the Applicant's failure to call this witness. The Applicant stated he does not talk to Mr P because he owes him money, but no particulars of this loan were given - how much, purpose, when, what attempts have been made to recoup the loan?
13. In relation to others from whom the Applicant received reimbursements for personal expenses, the Tribunal understands that there is no obligation on the Applicant to call every witness (see Allied Pastoral Holdings at 615). The problem for the Applicant is that the Tribunal has found the evidence of a number of the witnesses who were called unreliable and unpersuasive.
14. Where there are no records available, the evidence provided orally still must be scrutinised: Cassaniti, at [88].
15. The matters under consideration date back some ten to fourteen years. It is understandable that perhaps not all records are able to be located or that memories have faded, or at least that every detail may not be able to be recalled.
16. In Re Hillsea Pty Ltd [2019] NSWSC 1152 Black J noted (at [16]) one should have regard to "the fallibility of human memory" when assessing affidavit and oral evidence. Black J quoted from Watson v Foxman [1995] NSWCA 497; (1995) 49 NSWLR 315 (at 319), where McLelland CJ in Equity observed that:

... human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions of self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. > > (emphasis added)

17. The criticisms levelled at questions being asked of the witnesses about events occurring so long ago, may be justified. However, this serves to highlight the utility of contemporaneous material.
18. In Fox v Percy [2003] HCA 22; 214 CLR 118 (at 129), Gleeson CJ, Gummow and Kirby JJ (at [31]) observed that:

...in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical. > > (emphasis added)

ARE THE AMENDED NOAS EXCESSIVE/HAS THE APPLICANT DEMOSTRATED HIS ACTUAL INCOME?

1. In QQRK and Commissioner of Taxation (Taxation) [2023] AATA 3493 the Tribunal noted that although a taxpayer's evidence is evidence, this does not mean it will be sufficient to "persuade without corroboration":

[11]... The Tribunal will look carefully at self-serving testimony that is not corroborated in circumstances where one would ordinarily expect records or other documentation or testimony from another witness to be available, or where the taxpayer's testimony is unusual or unlikely on its face or inconsistent with other probative evidence.

2. For the reasons outlined above, the Tribunal is not satisfied on the balance of probabilities that, on the evidence available, the Amended NOAs are excessive.
3. The contemporaneous material does not shed light on the Relevant Deposits.
4. The Applicant provided various tables in closing submissions. The submissions were said to be an estimate of what the Applicant received by way of reimbursements from various witnesses and were broken down into total summary of evidence as well as amounts for category. This may have provided some guidance if the Tribunal had accepted the witnesses' evidence or found it persuasive. But, as outlined, the Tribunal was not satisfied about the majority of this evidence.
5. The issue of being required to make an estimate upon inexact evidence does not arise here.[359]
6. There was an absence of contemporaneous records, and no reliable forensic analysis.

Contentions/Consideration Regarding Deficiencies

1. Evidence can be accepted even if it is uncorroborated (see Cassaniti). As per the approach set out in Gestmin, little reliance can be placed on witnesses' recollections in the circumstances outlined below. Following scrutiny of the evidence of all witnesses, few factual findings can be determined. Certainly the facts that can be found are insufficient to discharge the Applicant's burden of proof.
2. There were deficiencies in the evidence.
3. Some of the evidence, as discussed at, for example, paragraphs ‎293, ‎300, ‎359, ‎360, ‎400, ‎411, ‎488 was unreliable.
4. The Applicant contended that he produced "extensive" evidence,[360] yet in the end there was very little in the way of persuasive corroborative documentation or oral testimony.
5. Some witnesses had no independent recollection of the relevant transactions. None of the witnesses called produced any of their own bank accounts or financial records to verify the purported payments they made to the Applicant. The only witness that specified exacts amounts paid was Mr U in relation to the motor vehicles and jet skis. As already explained above, the Tribunal was not convinced by Mr U's evidence.
6. The Applicant provided the Tribunal with an estimate of the amounts spent by him in relation to the corporate Boxes. The estimate of the number of attendances are just best-case scenarios based on the number of events held per year. That is the estimate presumes a certain number of people in attendance at each match or event held at the stadium. Estimates must have a sufficient evidentiary basis, otherwise they are simply speculations. The first problem with this estimate is that the Applicant did not give evidence that he attended every event at both boxes. So, it is already an amount over and above what he could have been reimbursed. It is a matter of public record that there were 51 AFL Games and up to 11 A-League Games at Etihad Stadium between 1 July 2010 and 30 June 2011. The Tribunal accepts that, but it does not follow that the Applicant filled the Etihad box with 16 people, all of whom reimbursed him, at every one of those events. Nor is the evidence sufficiently clear as to the amounts each attendee would have paid. The catering fee is different for each occasion and, as expected, dependent on what people chose to eat and drink. The Tribunal does not have all invoices before it to make an "educated estimate".

[109]...Much depends on the nature of the transaction and whether it is of a kind that would result in retention of documents in the circumstances. This is not a case where a taxpayer has been assessed because they have failed to produce a supporting record in respect of a single isolated deposit which might have been explained by private transactions some time ago for which records are inherently unlikely to have been retained, and are potentially unobtainable when the time comes to establish their character and provenance some years after the event. The evidence, or lack of it, in the present matter needs to be seen in the context of the pattern of conduct, the manner in which Mr Buzadzic conducted his affairs, the number of discrepancies, the size of the discrepancies (bearing in mind that the Commissioner did not seek explanations for and did not question transactions of less than $1,000) and the period over which the discrepancies were identified. The present circumstances include three trusts and 16 companies with which Mr Buzadzic was associated, repeated intermingling of substantial volume and value of business transactions with private arrangements, repeated intermingling of funds of separate businesses and their owners and an apparent reluctance to do what the group's external accountants usually ask of their clients. The deposits and credits to loan accounts that have been the subject of scrutiny were all in excess of $1,000 and were all unexplained. > > (emphasis added)

10. As in Buzadzic, this matter does not concern an isolated deposit, it concerns 99 deposits totalling more than $750,000 over a five-year period. The witnesses who were called were all friends, or family of the Applicant, no-one independent or at arm's length from the Applicant gave evidence about any of the transactions. The written statements appeared to have been templated. When tested under cross-examination the witnesses either downplayed the written evidence, gave a less accurate recollection or in one instance were adamant the evidence was not in fact their evidence. This evidence does not meet the requisite standard of proof.
11. Even where evidence is "unchallenged" it can still be rejected in circumstances where it was inconsistent with other accepted evidence or where it is "inherently incredible".[363]

1. It is trite to say that the Commissioner does not bear the onus of proving or disproving the Applicant's contentions. However, the evidence must be tested and challenged in order to assist the Tribunal in its determination of whether to either accept or reject it, or to determine what weight should be given to it.
2. This matter concerns transactions and events that occurred 9 to 14 years ago. Some of the matters one would expect a person to remember in detail, such as who had access to the safe which contained thousands of dollars. The particulars of other, not so important, or commonplace matters may not be recalled.
3. The Applicant often appeared frustrated with the Tribunal process and the questions he was asked during cross-examination. He also appeared cavalier and unconcerned with the seriousness of the matter. He was asked direct questions and more than a dozen times and in response said "I don't know" or that he didn't remember, or on a couple of occasions suggested the matters under examination were "irrelevant".[364] The Applicant wants the Tribunal to accept his evidence which at its highest is a series of generalised statements of categories of expenses he incurred for people.
4. The Applicant's version of events was contradicted by several witnesses.
5. The evidence about who else had access to the safe was confusing. At first, he said only himself and his wife has access.[365] Then he said his daughter might have had access as well.[366] Later, during the hearing the Applicant stated Mr C also had access to the safe.[367] The Applicant said:[368]

Who are these - - -?---We needed more money and I asked if he could put it in. The guy looking after the box while we were away. > > So who is that?---Using the box I'm pretty sure, from memory around that time. > > Who is - - -?---[Mr C]. > > [Mr C]?--- [Mr C]. One of the witnesses, you can ask him about that information. > > What's [Mr C]'s surname please?---[C]. I don't remember exactly if it was him, but it could have been a number of things. But it just proves the card was getting paid by the end of every month to make sure I avoid the high interest. > > So you didn't mention this yesterday?---I didn't think of it. > > Okay. And - - -?---I just realised now > > ... > > MS LEE: Thank you, Mr Associate. So GNBF, it's your evidence that [Mr C] made those three payments?---Yes, it would've - yes, he would've. I think it would've been him, unless he got someone else to do it, yes. I - - - > > Who would that someone else be?---I don't know. Maybe his wife, my cousin. She's my cousin, his wife, so. > > So your evidence is that [Mr C] paid into your accounts over the course of 11 days just short of $30,000? Is that your evidence?---Yes, looks like that, yes. > > ... > > Was it from your safe?---I don't think so. > > No. Okay. So - - -?---It might've been > > ... > > Which box?---2011, I'm not sure if what year - did I have Etihad that year? I think I - it was MCG, yes. Well then Joe would've been in charge of the box. But I'm sure Branko used, like, my half, if you know what I mean. > > I don't, really, but - - -?---Yes, well, my 50 per cent - I put him in charge of my 50 per cent. > > Do you have any documents or records of you putting him in charge?---No, it's verbal. Personal nature. > > So he would invite his guests to use your half of the MCG box? Is that correct? > > And the charges - - -?---I'm guessing. > > > > > > > > (emphasis added)

6. Later again he said Ms D may have had access to his safe.[369] Given the amount of money purportedly being stored in the safe, the Tribunal considers it unusual to not be able to recall who had access to it. But that is the extent of the evidence the Tribunal is left with. The Applicant acknowledged he was guessing.
7. In terms of who made deposits his original evidence was it was either him, his wife, Ms T, or Ms D. During the hearing it became apparent that on 23 August 2011 when money was deposited, the Applicant, his wife, Ms T and Ms D were all overseas.[370] When presented with this information the Applicant stated, after a brief adjournment, that Mr C would have made the deposit.[371]
8. At one stage during cross-examination the Applicant proffered that his daughter may also have known the combination to the safe. This is unlikely given his daughter would have only been 14 years old at the time. The Applicant changed his evidence to say she probably would not have had access to the safe and then later "she could've had access...I'm not sure".[372] Neither the Applicant's Wife nor his daughter gave evidence so there is nothing to corroborate this aspect of the Applicant's evidence. This highlights the unreliability of the Applicant's evidence.
9. The Applicant said the question of who had the combination to the safe was a "very hard question to answer".[373] The Tribunal finds it hard to accept that the Applicant would not have known who had access to a safe which purportedly contained significant amounts of cash.
10. Although the bank accounts of other witnesses are not strictly speaking necessary, it would have assisted here because of the inherent implausibility of the evidence.
11. Mr Wright's and Mr Cerantonio's evidence was honest but, for the reasons already outlined, unhelpful.
12. The Tribunal finds that the Applicant has not shown, on the balance of probabilities, the deposits were from non-income sources.
13. The Tribunal finds that the Applicant has not established:

(a) his actual taxable income for each of the Relevant Years; and > > (b) the Commissioner's Amended NOAs were excessive.

14. As the High Court held in Trautwein (at 87):

In the absence of some record in the mind or in the books of the taxpayer, it would often be quite impossible to make a correct assessment. The assessment would necessarily be a guess to some extent, and almost certainly inaccurate in fact. There is every reason to assume that the legislature did not intend to confer upon a potential taxpayer the valuable privilege of disqualifying himself in that capacity by the simple and relatively unskilled method of losing either his memory or his books.

15. There is little reliable evidence that the Applicant was reimbursed by the people he chose to call to give evidence. The unreliability of some witnesses casts further doubt in relation to the claimed basis for the cash deposits made to the Applicant. There is no way to know when, or if, people reimbursed the Applicant, and no corroborating or contemporaneous evidence regarding the movement of money in and out of the Applicant's safe.
16. The Applicant stated he kept no records of:

(a) what money went into the safe;[374] > > (b) who owed him money and how much in relation to the corporate Boxes;[375] and > > (c) any cash payments made to him.[376]

17. The Applicant also told the Tribunal it was "impossible" to provide particulars of the source of the cash.[377] If it is impossible for the Applicant, it is certainly impossible for the Tribunal. The Tribunal, unlike the Applicant, "is a stranger to transactions forming the taxable facts".[378]
18. Even if the Tribunal accepted the Applicant regularly assisted friends and family with flights, internet purchases and Box invites, the Tribunal is not satisfied on the evidence that the Relevant Deposits represent the reimbursements of these expenditures.

1. The Commissioner can only amend the NOAs if it is found that the Applicant's conduct amounted to evasion: Subsection 170(1) item 5 ITAA 1936_._
2. The onus is on the Applicant to disprove evasion. If he does not do so, the Tribunal must affirm the Amended NOAs.

1. The Applicant contends there has been no evasion for the purpose of section 170(1) item 5 of the ITAA 1936.[379] The Applicant submits he:

(a) engaged a registered tax agent at all times; > > (b) supplied the registered tax agent with necessary and relevant information; > > (c) has not engaged in blameworthy conduct which would warrant a finding of evasion; > > (d) believed the undisclosed income was not assessable income.

2. The Applicant submitted there are "unique factors" which distinguish his position from other evasion cases. Those factors being:[380]

(a) the extent of the documentary evidence produced, the 12 lay witnesses and 2 accounting witnesses that gave evidence in support of the Applicant's position; and > > (b) the use of registered tax agent ASJR in each of the Relevant Years.[381]

3. The Applicant submits these factors support his case that the Tribunal should exercise its powers to allow the Objections on the basis that the Applicant did not engage in evasion in each of the Relevant Years.

1. The Commissioner submits "the Applicant has not discharged his burden of establishing that there was no omission of income; or that if there was, the omission was not caused by evasion".[382]
2. The circumstances which demonstrate evasion include:[383]

(a) the Applicant receiving income from unexplained sources that was not declared in his ITRs; > > (b) the Applicant paying less income tax as a result of not declaring all assessable income; > > (c) the Applicant deliberately and consistently omitted assessable income from his ITRs "without credible explanation"; and > > (d) the "cash deposits made into the Applicant's credit card accounts made omission of this income more difficult to detect".

3. The Commissioner referred to Nguyen v Federal Commissioner of Taxation [2018] FCA 1420; 265 FCR 355 where the Federal Court noted that in a case such as this one:[384]

[154]...to discharge the onus of proof regarding fraud and evasion the taxpayer would need to provide evidence as to the source of the unexplained funds, being evidence that was accepted by the Tribunal. > > (emphasis added)

4. The Commissioner contends the Applicant has not discharged his burden of establishing that there was no omission of income; or that if there was, the omission was not caused by evasion.[385]

1. It is not in dispute that the Commissioner was out of time to amend the NOAs unless he formed the view that there had been fraud or evasion. We are not concerned with fraud here, only evasion.
2. On review in the Tribunal, the burden of disproving evasion rests with the Applicant.[386]
3. The leading authority is Binetter v Commissioner of Taxation [2016] FCAFC 163; 249 FCR 534 (Binetter). In Binetter the Full Court explained the burden of proof for evasion and the power to amend out of time pursuant to section 170(1) item 5 of the ITAA 1936 as follows:

[91]... It is also well established that satisfaction of the requirements of s 170(2) of the ITAA 1936 (and its cognate provisions) is a matter going to substantive liability, so that a taxpayer challenging the authority of the Commissioner to make an amended assessment bears the onus of proving that the statutory requirements for the authority to amend the assessment were not satisfied: McAndrew v Federal Commissioner of Taxation [1956] HCA 62; (1956) 98 CLR 263; Dalco at 622; WR Carpenter Holdings Pty Ltd v FCT [2008] HCA 33; (2008) 237 CLR 198 at [6]. > > ... > > [93]... Although the Tribunal re-examines whether, on the evidence before it, there was an avoidance of tax due to fraud or evasion, and is able to substitute its opinion for that of the Commissioner, the issue for the Tribunal is whether the taxpayer has discharged the onus of showing that the opinion that there was fraud or evasion should not have been formed, and therefore, that the statutory condition for the power to amend is not satisfied. Unless the taxpayer discharges that onus, the assessments are not shown to be excessive and the effect of s 14ZZK is that the Tribunal must affirm the amended assessments, such assessments having been made by the Commissioner in compliance with the statutory requirements: McCormack v Federal Commissioner of Taxation [1979] HCA 18; (1979) 143 CLR 284 at 303; Millar v Commissioner of Taxation [2015] FCA 1104; In Millar Griffiths J correctly held that on a merits review before the Tribunal, the onus of proof imposed by s 14ZZK places on the taxpayer the burden of disproving fraud or evasion. > > (emphasis added)

4. The Commissioner referred to the decision of Deputy President O'Loughlin in LDGL v FCT [2017] AATA 2779 (LDGL). In LDGL (at [53]-[54]) Deputy President O'Loughlin discussed the practical effect of Binetter was that it was "difficult, if not impossible" to accept the taxpayer has disproved evasion in circumstances where he or she has not demonstrated their actual income and that the assessments imposed by the Commissioner are excessive.
5. Evasion is the most serious of allegations that can be made against a taxpayer and is not to be lightly inferred: Practice Statement Law Administration PS LA 2008/6 Fraud or evasion.
6. In Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66 the High Court said:

...a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. As Dixon J. commented in Briginshaw v. Briginshaw ((7) (1938) 60 CLR, at p 362; and see, also, Helton v. Allen (1940) 63 CLR, at p 711): > > "The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved ...".

7. The Respondent submitted that Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336 (Briginshaw) has no application to the Applicant discharging his burden under section 14ZZK in respect of an evasion finding under item 5 of subsection 170(1) of ITAA 1936.
8. The Tribunal notes there has been some debate about the strict applicability of Briginshaw in the Tribunal context given that it reflects an evidentiary rule or principle and the Tribunal is not bound by the rules of evidence.[387] This Tribunal will not enter the fray on this issue suffice it to say that the Full Federal Court in McDonald v Director-General of Social Security [1984] FCA 59; 1 FCR 354 noted that despite the lack of being bound by strict rules of evidence the Tribunal still has to grapple with the practicalities of weight to be given to admitted evidence, and with the consideration of natural justice and is more likely to find the answer in the statute under consideration here. Here simply put the Applicant bears the onus of proving his conduct does not amount to evasion on the balance of probabilities.
9. As in Buzadzic v Commissioner of Taxation [2023] FCA 954,[388] there were clear deficiencies in the records provided to the Tribunal - there were no records of the reimbursements either from the party making the reimbursement or the Applicant. The only records (which were incomplete) were those showing that the Applicant had incurred expenses. The explanations were in the form of generalisations and lacked sufficient particularity.
10. The Tribunal is not satisfied that the Applicant has shown what the source or sources of money reflected in the Relevant Deposits was or were. All that is known for certain is that:

(a) various amounts of cash were deposited throughout the Relevant Years (a total of 99 times) into the Applicant's credit card and bank accounts; > > (b) the cash deposits were always for an amount of $10,000 or under.

11. The bank statements do not identify the source of the deposits.
12. The evidence does not demonstrate that the deposits were not attributable to amounts of undeclared income derived by the Applicant from an unidentified source.
13. The Tribunal does not accept the unsupported and unreliable explanations for the deposits proffered by the Applicant. The Tribunal considers the Applicant's oral evidence concerning the deposits to be speculative and unreliable.
14. As a result, the Tribunal cannot be satisfied that all assessable income has been reported by the Applicant.
15. In two of the five income years under review the Applicant did not file an ITR within time.
16. The Applicant seeks to place the blame on his former accountant and contends he relied on them for advice. The evidence is insufficient and self-serving. There is no evidence of instructions given or of advice received. However, if ASJR proceeded, as Mr Wright and Mr Cerantonio, simply by accepting the Applicant's instructions about his income and explanations that the deposits were personal in nature, how can the Applicant be said to have relied on the accountant? If he had requested advice, he should have allowed his tax agent to review the transactions and advise him accordingly. There is no evidence this occurred.
17. The Tribunal finds this submission precarious. The letter from ASJR to the ATO during the audit specifically states:[389]

...no credit card information was provided to his accountants for their professional assessment in preparing Tax returns or Audit review for the periods 2011through to 2016

18. For the Applicant to attend the hearing and tell the Tribunal that he sought advice on his credit card information in light of this statement in his tax agent's letter was foolhardy.
19. Following Binetter and Nguyen, the Tribunal, for reasons outlined above, does not accept the Applicant's evidence or submissions regarding the source of the income. As a result, the Applicant has not discharged the onus of proof regarding evasion.
20. Therefore, the statutory condition for the power to amend his NOAs is satisfied.

1. The Tribunal has found that the Applicant has not established his actual income or that the assessed income was excessive. In these circumstances the Applicant has failed to prove his conduct did not amount to evasion within the meaning of item 5 of subsection 170(1) of the ITAA 1936 for the Relevant Years.[390]

1. Administrative penalties can be imposed pursuant to section 284-75(3) of Schedule 1 to the TAA in the following circumstances:

(a) you fail to give a return, notice or other document to the Commissioner by the day it is required to be given; and > > (b) that document is necessary for the Commissioner to determine a tax-related liability (other than one arising under the Excise Acts) of yours accurately; and > > (c) the Commissioner determines the tax-related liability without the assistance of that document. > > Note: You are also liable to an administrative penalty for failing to give the document on time: see Subdivision 286-C.

2. The base administrative penalty is 75% of the relevant tax related liability.[391] The base penalty is increased by 20% if the taxpayer "took steps to prevent or obstruct the Commissioner from finding out about a shortfall amount, or the false or misleading nature of a statement, in relation to which the base penalty amount was calculated".[392]
3. Pursuant to section 298-20 of Schedule 1 of the TAA the Commissioner has the power to remit all, or part of the penalty amount calculated.
4. The ATO issues practice statements pursuant to authority of the Commissioner. These practice statements are used by the ATO to provide instructions on the way in which the tax law should be administered. Practice Statement Law Administration PS LA 2012/5 Administration of the false or misleading statement penalty - where there is a shortfall amount (PS LA 2012/5) explains the circumstances in which a taxpayer will become liable to a penalty pursuant to section 284-75(1) to Schedule 1 of the TAA and how that penalty is assessed including any remission.
5. PS LA 2012/5 sets out what matters should and should not be taken into account in considering whether to remit a penalty:

16F. Relevant matters to consider in making a remission decision include:

• that the purpose of the penalty provision is to encourage entities to take reasonable care in complying with their tax obligations
• that the penalty regime also aims to promote consistent and equitable treatment by reference to specified rates of penalty; this objective would be compromised if the penalties imposed at the rates specified in the law were remitted without just cause, arbitrarily or as a matter of course, and
• that the amount of the penalty rate alone is not a valid reason for remission, in the absence of specific reasons why it would be unjust in the taxpayer's particular circumstances.

16G. Matters that you should not usually consider include:

• behaviour or situations unrelated to the relevant statement, such as the entity or registered agent becoming ill at the time of the examination, well after the statement was made
• that there is 'no harm to the revenue', such as when a refund has been stopped before issuing or a credit was available in another accounting period
• where GST was 'not included' in working out the selling price for the transaction, because the entity could not or would not collect the GST on that supply from the purchaser, or
• whether there is a capacity to pay the penalty (except in relation to determining whether a trustee or beneficiary is the more appropriate entity to bear their penalty).

1. The Commissioner has issued a ruling, Taxation Ruling TR 94/7 Income tax: tax shortfall penalties: guidelines for the exercise of the Commissioner's discretion to remit penalty otherwise attracted (TR 94/7). TR94/7 provides relevantly:

[2] The discretion to remit penalty otherwise attracted under a shortfall section should be exercised in only those exceptional cases where, having regard to all of the circumstances, the application of a particular shortfall section and/or the rate of penalty prescribed under that section would provide a clearly unreasonable or unjust result. > > (emphasis added)

1. Division 284 of Schedule 1 of the TAA sets out when a person is liable for a penalty in relation to a false or misleading statement and the amounts of those penalties.
2. Section 284-75(1) provides:

You are liable to an administrative penalty if: > > (a) you make a statement to the Commissioner or to an entity that is exercising powers or performing functions under a taxation law (other than the Excise Acts); and > > (b) the statement is false or misleading in a material particular, whether because of things in it or omitted from it.

You are not liable to an administrative penalty under subsection (1) or (4) if: > > (a) you engage a registered tax agent or BAS agent; and > > (b) you give the registered tax agent or BAS agent all relevant taxation information; and > > (c) the registered tax agent or BAS agent makes the statement; and > > (d) the false or misleading nature of the statement did not result from: > > (i) intentional disregard by the registered tax agent or BAS agent of a taxation law; or > > (ii) recklessness by the agent as to the operation of a taxation law. > > (emphasis added)

4. The burden of establishing that the exception applies rests on the Applicant: section 284-75(7).

1. Section 284-80 sets out when there is a shortfall amount:

284-80 Shortfall amounts > > (1) You have a shortfall amount if an item in this table applies to you. That amount is the amount by which the relevant liability, or the payment or credit, is less than or more than it would otherwise have been.

You have a shortfall amount in this situation:

A tax-related liability of yours for an accounting period, or for a taxable importation, or under the Superannuation (Unclaimed Money and Lost Members) Act 1999, worked out on the basis of the statement is less than it would be if the statement were not false or misleading

You are not liable to an administrative penalty under subsection (1) or (4) for a statement that is false or misleading in a material particular if you, and your *agent (if relevant), took reasonable care in connection with the making of the statement.

2. A false or misleading statement is a statement that is objectively incorrect. It matters not the intention, or lack thereof, of the taxpayer in making the statement. Where a shortfall is found in the amount of assessable income, it inevitably means that a false or misleading statement has been made in the ITR lodged and declared by the taxpayer to be true and correct.

1. Base penalties are worked out in accordance with section 284-90. Base penalties may be imposed if the recklessness or failure to take reasonable care was due to the taxpayer or the taxpayer's agent.
2. Section 284-90 relevantly provides:

284-90 Base penalty amount > > The base penalty amount under this Subdivision is worked out using this table and subsections (1A) to (2), and section 284-224 if relevant:

You have a shortfall amount as a result of a statement described in subsection 284-75(1) or (4) and

the amount, or part of the amount, resulted from intentional disregard of a taxation law (other than the

You have a shortfall amount as a result of a statement described in subsection 284-75(1) or (4) and the

amount, or part of the amount, resulted from recklessness by you or your agent as to the operation of a taxation law (other than the Excise Acts)

You have a shortfall amount as a result of a statement described in

subsection 284-75(1) or (4) and the amount, or part of the amount, resulted from a failure by you or your agent to take reasonable care to comply with a taxation law (other than the Excise Acts)

(a) intentional disregard attracts a 75% penalty; > > (b) recklessness attracts a 50% penalty; > > (c) failure to take reasonable care attracts a 25% penalty.

2. The graduated base penalty scheme increases or decreases the penalty percentage based on the gravity of the taxpayer's conduct.
3. The Commissioner's taxation ruling, MT 2008/1 Penalty relating to statements: meaning of reasonable, care, recklessness and intentional disregard (MT 2008/1) provides some guidance also. MT 2008/1 is a public ruling and an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. It sets out the Commissioner's interpretation of the concepts 'reasonable care', 'recklessness' and 'intentional disregard' as used in Subdivision 284-B and 'intentional disregard' and 'recklessness' as used in section 286-75(1A) of Schedule 1 to the TAA. It provides:

Meaning of intentional disregard of a taxation law > > [110] The adjective 'intentional' means that something more than reckless disregard of or indifference to a taxation law is required. > > [111] ... the test for intentional disregard is purely subjective in nature. The actual intention of the entity is a critical element. > > [112] Intentional disregard means that there must be actual knowledge that the statement made is false. To establish intentional disregard, the entity must understand the effect of the relevant legislation and how it operates in respect of the entity's affairs and make a deliberate choice to ignore the law. > > [113] Dishonesty is a requisite feature of behaviour that shows an intentional disregard for the operation of the law. This is another significant difference between this type of behaviour and behaviour that shows a want of reasonable care or recklessness where dishonesty is not an element. > > [114] Evidence of intention must be found through direct evidence or by inference from all the surrounding circumstances, including the conduct of the entity. > > ... > > Meaning of recklessness as to the operation of a taxation law > > [99] ... 'recklessness' connotes conduct that is more culpable than a failure to take reasonable care... > > [100] ... conduct that falls short of the standard of a reasonable person ... dishonesty is not an element of establishing recklessness. The actual intention of the entity is of no relevance. > > [101] Behaviour will indicate recklessness where it falls significantly short of the standard of care expected of a reasonable person in the same > > ... > > Meaning of reasonable care > > [27] ... Taking 'reasonable care' in the context of making a statement to the Commissioner or to an entity within the meaning of subsection 284-75(4) means giving appropriately serious attention to complying with the obligations imposed under a taxation law. > > > > > > (emphasis added)

4. An intentional disregard of a taxation law will be found where there has been dishonesty; where there has been a cognisant decision, an awareness on the part of the taxpayer, to make a false statement, and to leave that statement uncorrected.
5. A finding of dishonesty is not required for "recklessness" and intention of the taxpayer does not play a role. However, something more than a failure to take reasonable care is required.

1. The base penalty amount may be increased by 20% in the following circumstances (section 284-220 to Schedule 1 of the TAA):

(1) The *base penalty amount is increased by 20% if: > > (a) you took steps to prevent or obstruct the Commissioner from finding out about a *shortfall amount, or the false or misleading nature of a statement, in relation to which the base penalty amount was calculated; or > > (b) you: > > (i) became aware of such a shortfall amount after a statement had been made to the Commissioner about the relevant *tax-related liability; or > > (ii) became aware of the false or misleading nature of a statement made to the Commissioner or another entity after the statement had been made; > > and you did not tell the Commissioner or other entity about it within a reasonable time; or > > (c) the base penalty amount was worked out using item 1, 2 or 3 of the table in subsection 284-90(1) and a base penalty amount for you was worked out under one of those items previously; or > > (ca) the base penalty amount was worked out using item 3A, 3B or 3C of the table in subsection 284-90(1) and a base penalty amount for you was worked out under one of those items previously; or > > (d) the base penalty amount was worked out using item 4, 5 or 6 of that table and a base penalty amount for you was worked out under that item previously; or > > (e) your liability to a penalty arises under subsection 284-75(3) and you were previously liable to a penalty under that subsection.

1. The Commissioner may remit all or part of a penalty (section 298-20 of Schedule 1 of the TAA).

1. The Applicant submits no penalty should have been applied. He states he did not intentionally disregard the taxation law in preparing and lodging his assessments for the period 1 July 2010 to 30 June 2015 and further, that he relied on his tax agent to lodge his ITRs based on his taxable income.[393]
2. Further or alternatively, the Applicant states he acted with reasonable care in preparing and filing his ITRs for the 2011 to 2015 income years.[394]
3. If, as the Tribunal has found, penalties are applicable, the Applicant submits they should be remitted in whole or in part under section 298-20 of Schedule 1 of the TAA because the penalties are harsh in the circumstances.[395]
4. The Applicant submits there should be no uplift of the base penalty because either:

(a) there is no shortfall amount, or alternatively, > > (b) no base penalty should be imposed.

5. In addition to the fact that he engaged a registered tax agent, the Applicant submits he should not be liable to an administrative penalty because he acted as a reasonable person would have been expected to act in the circumstances. The Applicant stated he believed the Relevant Deposits were personal in nature and therefore did not have to be disclosed in his ITRs.[396]
6. The Applicant submits that the Commissioner should have exercised its general discretion to remit the failure to lodge penalty in full for the 2011, 2012 and 2015 years as he did for the 2013 and 2014 income years.[397]

1. The Commissioner contends that the Applicant has not discharged his burden of proving that the penalty assessments in the Relevant Years are excessive because:[398]

(a) the Applicant has made materially false and misleading statements in his ITRs by failing to declare amounts which represented amounts of assessable income, the outcome of which has resulted in a shortfall as defined in section 284-80(1) of Schedule 1 to the TAA; > > (b) the Applicant should have been aware, as the sole account holder, of the frequent deposits being made into his accounts and reported them accordingly.

2. The Commissioner submits the Applicant's behaviour amounts to an intentional disregard and that therefore the appropriate penalty amount is 75% in accordance with section 284-75(1) of Schedule 1 of the TAA.[399]

1. Here there is a shortfall in the amount of declared assessable income in each of the Relevant Years.
2. The base administrative penalty applied is 75% of the relevant tax related liability.[400] The base penalty is increased by 20% if the taxpayer "took steps to prevent or obstruct the Commissioner from finding out about a shortfall amount, or the false or misleading nature of a statement, in relation to which the base penalty amount was calculated".[401]
3. Pursuant to section 298-20 of Schedule 1 of the TAA the Commissioner has the power to remit all, or part of the penalty amount calculated.
4. The ATO issues practice statements pursuant to authority of the Commissioner. These practice statements are used by the ATO to provide instructions on the way in which the tax law should be administered. Practice Statement Law Administration PS LA 2014/4: Default assessment penalty (PS 2014/4) explains the circumstances in which an entity will become liable to a penalty pursuant to section 284-75(3) of the TAA and how that penalty is assessed including any remission.
5. Paragraphs 5K and 5L of PS 2014/4 goes on to provide that the discretion to remit penalties should be approached in a fair and reasonable way and sets out that a remission, either in full or in part will generally occur, as follows:

5K. The remission decision should be approached in a fair and reasonable way. Remission, in full or in part, is generally appropriate when: > > • an entity has a genuine, yet mistaken, belief that lodgment was not required as opposed to an indifference to, or a rejection of, its obligation > > • an entity understood the obligation to lodge but circumstances beyond its control affected its ability to lodge > > • the amount of penalty imposed by law causes an unjust result in the circumstances, or > > • there were credits (such as PAYGW) available to offset the amount of the tax-related liability payable which have not been taken into account in determining the penalty. > > 5L. Remission may be appropriate where an entity went beyond what was asked or expected to assist us during an examination.

6. There are shortfall amounts for each of the Relevant Years: section 284-80(1), Schedule 1, TAA.
7. By underreporting his assessable income, the Applicant is liable to the administrative penalties assessed because the underreporting resulted in false statements being made in his ITRs.
8. The Tribunal finds penalties were appropriately imposed. The issue is the appropriate amount of penalty.
9. The Applicant's behaviour amounts to intentional disregard because:

(a) he is not an inexperienced taxpayer - he operates a company and a family trust and has engaged a number of tax agents over the years to assist him with the preparation of financial statements and ITRs; > > (b) during cross-examination when it was identified that the 2014 financial statements of the Company prepared by the ASJR showed the Applicant earned $100,000 in director's salary, the Applicant stated ASJR prepared them incorrectly:[402] > > Okay. So you're saying that they got it wrong. So when they say director's salary, you're saying that that's wrong?---Yes. They would have got it wrong, yes. How can I work if I'm injured? > > So did you - have you seen this before?---No. I don't know. I'm not sure. > > It's exhibited to your witness statement?---Yes. Well, they made a mistake obviously. > > Did you raise this with them?---Pardon? > > Did you raise the mistake with them?---I didn't notice it. I think I actually said it. I don't know why they'd done it that way because I remember distinctly saying, 'it's classed as salary until that day, the day I had the accident'. I distinctly remember telling them that. So if they got it wrong - - - > > (c) And again: > > ...under currently liabilities, so these are liabilities owed by the company, I understand owed to you because you're the sole director. Now, I'm not able to answer why it's referred to as a director's loan 2015 because these are 2014 accounts. Are you able to explain to the tribunal that labelling?---No. Sorry. This is all numbers that my accountant would know. > > Now, could I just get you to look across the page, right. It shows that in 2013 - I'm going to use round numbers, sir, but you'll see the exact numbers on your screen - year 2013, $65,000. That was owed by the company to you. And then 2014 there was $32,000 owed by the company to you. So that's a difference of, what, $33,000?---Yes. I'm not sure. > > So I put to you that's already taken into account, that the - - -?---I'm not sure. If that's from [ASJR] - can't rely on them. > > (emphasis added) > > (d) And again:[403] > > No. Okay. If I could please take you to - so the page before, 2,447. It should be headed 'current assets'. I'm after 'receivables', which is at about 20 point 3 of the page. GNBF, it says, 'director's loan 2015' and there's an amount of $97,922.34. Do you see that?---M'mm. > > > > > > > > > > > > > > > > > > > > > > (emphasis added)

10. There are decisions where the engagement of, and reliance upon, a tax agent and/or solicitor have supported a contention that the taxpayer had acted with reasonable care. See Thomas v Commissioner of Taxation [2015] FCA 968; 101 ATR 576 (Thomas) at 666 [584] and Barakat and Ors and Commissioner of Taxation [2007] AATA 1564; 68 ATR 283 (Barakat).
11. In Barakat, a factor in that case that indicated the Applicant had taken reasonable care was the engagement of a tax agent and lawyer, and the taxpayer's reliance on professional advice. In Thomas, Greenwood J took into account that the taxpayer had acted on the advice of his solicitor in assessing whether he had taken reasonable care.
12. The Tribunal cannot be not satisfied that the Applicant took reasonable care. It is unclear what instructions were given to the accountant or what advice was given.
13. The Tribunal acknowledges that a taxpayer should be able to rely on their tax agent and accountant, but this does not relieve the taxpayer of the requirement to take reasonable care.
14. A similar issue regarding reliance on advisers arose in Fowler v Federal Commissioner of Taxation [2013] FCAFC 69; 212 FCR 149 (at [128]) where the Full Court noted that the primary judge had found the taxpayer's evidence was "general, limited and vague". The Full Court set out some of the evidence given by the taxpayer and held the primary judge was correct in describing the evidence in this way:

In those circumstances, did you make any inquiries concerning the tax treatment of the options that were issued to you?---I believe so, yes. There would have been, obviously recalling events back then is a long ago, but I would have spoken to people like Brendan Brown, who was advising the company. But in my personal circumstances I had an account, obviously, with my tax agent. So all tax matters I would discuss, at some point, with them. > > Okay. Brendan Brown was advising the company, you say?---Yes. > > Were you given advice - on what basis did you form the decision not to include an amount in your assessable income?---On the basis of the view of mine at the time, which forms a basis of the case, I guess, your Honour, in that I agreed to salary sacrifice from 1 July. So I take myself out of the company. I mean, this is about me as a tax payer. And had a commitment and financial risk from that point onwards by sacrificing my salary for options in the company. So if those options, for instance, had have gone the other way, as they did in the following year, my remuneration would have been nil. > > And you made inquiries to that effect?---I believe I did, yes. > > [129] Having referred to that evidence her Honour set out her reasons for concluding that the appellant had not discharged the onus of showing that the Commissioner had erred (at [130]): > > Having regard to Mr Fowler's position as a company director and the nature of agreement pursuant to which the options were granted, a reasonable person in the circumstances of Mr Fowler would be expected to have made some reasonable enquiries concerning the tax treatment of the options under the relevant tax law - here Division 13A of the ITAA 1936 Act. Indeed, given that Mr Fowler had agreed to forego cash fees that were undeniably in the nature of assessable income in his hands, a reasonable person in his position would have expected his agreement to forego cash for options in lieu would have some income tax consequences. Such a person would have foreseen, as reasonably likely, that the failure to include in his assessable income an amount in respect of the options would result in a shortfall amount. The lack of cogent evidence that Mr Fowler made any relevant enquiries and his failure to keep basic records relating to the grant of the options justified the imposition of administrative penalty for failure to take reasonable care. > > (emphasis added)

15. The Full Court found no error in the primary judge's reasoning.[404]
16. The Applicant has not, for the reasons outlined earlier, established that he and his agents did not act with intentional disregard. There is no evidence from anyone other than the oral evidence of the Applicant on this issue.
17. The Applicant maintained no records of the circumstances surrounding the Relevant Deposits. His understatement of his income was not insignificant and occurred across a five year period.
18. The Applicant sought to blame his accountant several times stating he felt "set up".[405] Why would the Applicant's accountant want to set him up?

1. It is for the taxpayer to appropriately and fully inform and instruct their tax agents.
2. There is no indication that the Applicant had any real appreciation of whether his ITRs were false and misleading. There is no evidence before the Tribunal from the tax agents addressing whether reasonable care was taken in the preparation of the Applicant's ITRs. The impression from the Applicant's evidence is that he acted with intentional disregard.
3. We know from the evidence of Mr Wright and Mr Cerantonio that an accountant acting reasonably based solely on the Applicant's instructions, without regard to source documents and analysis, could not say whether the Relevant Deposits were assessable in the hands of the applicant.
4. The Tribunal finds a base penalty of 75% for intentional disregard behaviour was correctly imposed.

Does the "Safe Harbour" Apply in the 2010 - 2013 Income Years?

1. The Applicant submits that the safe harbour in subsection 284-75(6) of Schedule 1 of the TAA applies in each of the Relevant Years in which there was a shortfall amount with the result that the Applicant is not liable to an administrative penalty in that income year.
2. Subsection 284-75(6) of Schedule 1 of the TAA provides:

(6) You are not liable to an administrative penalty under subsection (1) or (4) if: > > (a) you engage a *registered tax agent or BAS agent; and > > (b) you give the registered tax agent or BAS agent all relevant taxation information; and > > (c) the registered tax agent or BAS agent makes the statement; and > > (d) the false or misleading nature of the statement did not result from: > > (i) intentional disregard by the registered tax agent or BAS agent of a *taxation law (other than the *Excise Acts); or > > (ii) recklessness by the agent as to the operation of a taxation law (other than the Excise Acts). > > (7) If you wish to rely on subsection (6), you bear an evidential burden in relation to paragraph (6)(b).

3. PS LA 2012/5 provides the following in relation to the safe harbour provision:

11E. The safe harbour exception will only apply if the entity provides their registered agent with all relevant taxation information about a particular matter. > > 11F. Whether or not all the relevant taxation information was provided needs to be considered objectively. It does not matter if the entity genuinely believed they provided all relevant information. The exception will not apply if the entity omitted or did not supply any part of the relevant information, or gave incorrect or conflicting information. > > 11G. Registered agents are not required to view all source documents, and it is often impractical for them to do so. > > 11H. An entity may provide some information to their registered agent in a summary and the registered agent may reasonably rely on that for preparation of the statement. However, a summary which is incorrect or omits material information will not meet the requirement to provide all relevant taxation information, even if reasonable care for a registered agent would have involved querying the information. > > 11I. The entity has the burden of proof to establish that they provided all relevant taxation information. The standard of proof required is 'on the balance of probability' or 'more likely than not'. If the probability either way is equal, then the standard is not satisfied. > > 11J. You would usually need to contact the registered agent if the entity is claiming the safe harbour exception to the penalty. Without doing so, it would be difficult to assess their actions and whether they exercised reasonable care or know what information they requested from their client. > > (emphasis added)

4. The Applicant engaged ASJR to prepare and lodge his ITRs.
5. The burden is on the Applicant to prove he gave ASJR "all relevant taxation information" (see from paragraph ‎582 above).
6. The Applicant's evidence was as set out from paragraphs ‎163 above.
7. The Applicant has not proven that he provided his tax agent with "all relevant taxation information". In fact, the evidence points to a finding that he did not provide the tax agent with all relevant information.
8. The Tribunal finds that the Applicant has not established that the safe harbour provisions apply. There is insufficient evidence to establish, on the balance of probabilities, that the tax agents were provided with all relevant taxation information. There are no corroborating records. One of the only records available is the letter from the tax agent to the ATO which confirms that:[406]

(a) it was the Applicant's "opinion that the Credit Card transactions were of a personal nature", not the tax agent's; > > (b) "no credit card information was provided to [the Applicant's] accountants for their professional assessment in preparing Tax returns or Audit review for the periods 2011through to 2016".

1. Because there has been a penalty imposed for the 2011 Year, the further issue of whether an uplift is applicable now arises.
2. The Federal Court in Bosanac v Commissioner of Taxation [2019] FCAFC 116; 267 FCR 169 (Bosanac FC) held (at [144]) that section 284-220(1)(c) is to be constructed as meaning that the additional penalty amount applies where the shortfall amount arose for a previous tax liability.
3. Derrington J confirmed in Ross (at [198]) (relying on Bosanac FC at [143], [149]) that the uplift applies automatically and is not a matter of discretion for the Commissioner.
4. The SIC amount was greater than 20% of the tax shortfall amount for the 2011 to 2013 income years, and less than 20% of the tax shortfall amount for the 2014 to 2015 income years.[407]
5. Therefore an uplift of 20% for the 2012 to 2015 income years under s 284-220(1)(c) of Sch 1 to the TAA is automatically imposed.[408]

1. Penalties were also imposed for failing to lodge his ITRs for the 2011, 2012 and 2015 Years on time pursuant to section 286-75(1) of Schedule 1 to the TAA.
2. The Tribunal is not aware of any basis to remit these penalties.

Should the Penalties be Remitted in Whole or Part Having Regard to the Taxpayer's Particular Circumstances?[409]

1. The Commissioner submitted there was no basis to remit any of the administrative penalties under section 298-20 of Schedule 1 to the TAA. The Commissioner referred to the decision of Griffiths J in Sanctuary Lakes v Federal Commissioner of Taxation [2013] FCAFC 50; 212 FCR 483, where Griffiths J held at [249] that:

the question [of the remission of penalty under s 298-20 of Sch 1 to the TAA] is ... whether the decision-maker is satisfied having regard to the taxpayer's particular circumstances that it is appropriate to remit [the] penalty in whole or in part. > > (emphasis added)

2. The Tribunal may exercise a broad discretion to remit based on the specific circumstances of the case.[410] One example where circumstances would indicate that a penalty should be removed is where the outcome would otherwise be "unreasonable or unjust (and therefore inappropriate)".[411]
3. In considering whether to exercise the discretion to remit the penalties in whole or in part, the Tribunal notes in the submission that the penalties are "harsh" but there is no explanation as to why, in the Applicant's circumstances, they should be remitted has been identified.
4. The Tribunal does not consider in light of the matters addressed in this decision that it is appropriate to remit the penalties imposed.
5. In circumstances where the Tribunal has found the Applicant has acted with intentional disregard it is not appropriate to remit the 20% uplift in relation to the 2012 to 2013 Years.[412]
6. The Tribunal affirms the Penalty Decisions for the Relevant Years.

1. The Applicant submits the Tribunal should exercise the discretion to remit SIC applied to the 2011 to 2013 income years in full or in part because it is fair and reasonable to do so given:[413]

(a) it could be expected that the Commissioner would have commenced an audit of the Applicant's tax affairs by halfway through the Relevant Period; > > (b) it is still appropriate to consider remission in an evasion case on a case-by-case basis; > > (c) the unremitted SIC in each of the 2014 and 2015 years is less than 20% of the shortfall for those income years; > > (d) the interruption of COVID-19, an event outside of the Applicant's control; and > > (e) the Commissioner's delay in commencing the audit in 2017.

1. Pursuant to section 280-170 of Schedule 1 to the TAA 1953 a taxpayer may only object under Part IVC against a decision of the Commissioner not to remit an amount of shortfall interest charge payable on an additional amount of income tax if the amount of the charge that was not remitted is more than 20% of the additional amount.
2. As a result of section 280-170, the discretion to remit the SIC is only applicable to the 2011, 2012 and 2013 income years, because the unremitted SIC for the 2014 and 2015 years was less than 20% of the shortfall amounts for those years.
3. The Commissioner submits that the Applicant has not demonstrated that the Tribunal should exercise the discretion to remit any shortfall interest charge in the 2011 to 2013 Years.[414]

1. Section 280-170 of Schedule 1 to the TAA states that a taxpayer can only object to the decision not to remit SIC if the SIC amount is not more than 20% of the additional amount.
2. Practice Statement PS LA 2006/8 Remission of shortfall interest charge and general interest charge for shortfall periods (PS LA 2006/8) sets out circumstances in which the Commissioner should consider remitting interest charges that are imposed on shortfalls and accrue during the shortfall period.
3. PS LA 2006/8 provides that generally in a case involving evasion, the shortfall interest charges should not normally be remitted. This is because the taxpayer would have been aware of the potential shortfall and could have taken steps to reduce their exposure to interest charges.

The following table in the Commissioner's submissions sets out the amount of SIC for each Relevant Years:[415]

1. For the 2014 and 2015 income years, the SIC amount is less than 20% of the tax shortfall amount and therefore cannot be objected to by the Applicant in this Tribunal as part of a Part IVC TAA review. Therefore, the Tribunal has no jurisdiction to consider the remittal of SIC for the 2014 and 2015 income years.
2. In relation to the 2011 to 2013 income years the Tribunal is not satisfied a discretion should be exercised to remit any of the SIC imposed, particularly in circumstances where the Applicant lodged ITRs late, and where there has been a finding of evasion. The Applicant has not established that the timing of the audit was unreasonable and has not explained the relevance of the COVID-19 pandemic to the Applicant's circumstances.

I certify that the preceding 657 (six hundred and fifty-seven) paragraphs are a true copy of the reasons for the decision herein of Senior Member D K Grigg

..........................[SGD]................................

19, 20, 21, 22, 23, 27, 28 February 2024, 14 March 2024 and

[1] Exhibit 1, T-Documents, T2: Reasons for decision, p 21; T90: Letter from the Respondent to the Applicant enclosing Reasons for Decision dated 8 August 2018, p 2076; T83: Audit position paper, p 1604.

[2] Exhibit 5, Respondent's Amended Statement of Facts, Issues and Contentions dated 31 July 2023 (RSFIC), p 11; Exhibit 1, T-Documents, T2: Reasons for decision, p 21; T90: Letter from the Respondent to the Applicant enclosing Reasons for Decision dated 8 August 2018, p 2076; T83: Audit position paper, p 1604.

[3] Exhibit 1, T-Documents, T69: Letter from the Respondent to the Applicant advising of audit commencing for the 2012 to 2015 financial years, p 1459; T80: Letter to the Applicant from the Respondent advising that the audit period has been expanded, p 1580. The audit initially covered the 2012 to 2015 years and was later extended to include the 2011 year: Exhibit 6, Applicant's Statement dated 23 August 2022 (Applicant's First Statement), Annexure 38, Tab 42 of Tribunal Book.

[4] Tab 43 of Tribunal Book, Annexure 39 to Applicant's First Statement.

[5] RSFIC, p 10; Exhibit 1, T-Documents, T90: Letter from the Respondent to the Applicant enclosing Reasons for Decision dated 8 August 2018, pp 2082, 2128, 2130, 2132, 2134-2138.

[6] Respondent's Closing Submissions dated 12 April 2024 (Respondent's Closing Submissions), Annexure A, pp 63-65. An amended version of the Annexure was tendered at hearing and marked 'Exhibit 30'.

[7] Exhibit 1, T-Documents, T90: Letter from the Respondent to the Applicant enclosing Reasons for Decision dated 8 August 2018, p 2072.

[8] Exhibit 1, T-Documents, T29-T33: Notices of Amended Assessment for the Relevant Years.

[9] Exhibit 1, T-Documents, T34-T38: Notices of Amended Assessment of shortfall penalty for the Relevant Years.

[10] Exhibit 1, T-Documents, T83: ATO Audit Position Paper, TB2115, at [231].

[11] RSFIC, p 15; Exhibit 1, T-Documents, T23, T24, T25, T27, T28, T29, T30, T31, T32, T33, T34, T35, T36, T37, T38, T90, pp 365, 367, 369, 373, 375, 379, 383, 387, 391, 395, 399, 407, 415, 2073.

[12] Exhibit 1, T Documents, T95: Objection form - for taxpayers lodged by the Applicant for the years ending 30 June 2011 to 30 June 2015, pp 2150-2154; T97: Objection form - for taxpayers lodged by the Applicant for the years ending 30 June 2011 to 30 June 2015, pp 2246-2247.

[13] Exhibit 1, T-Documents, T100: Objection Notice of Decision.

[14] Exhibit 1, T-Documents, T2: Reasons for decision.

[15] Exhibit 1, T-Documents, T1: Application for review dated 19 May 2021.

[17] Section 14ZZ(1)(a)(i), Taxation Administration Act 1953 (Cth).

[18] See also Hayes v. Federal Commissioner of Taxation [1956] HCA 21; 96 CLR 47 at 55; Federal Coke Co Pty Ltd v Federal Commissioner of Taxation [1977] FCA 3; 34 FLR 375 at 402 per Brennan J.

[20] PS LA 2007/24 Making default assessments: section 167 of the Income Tax Assessment Act 1936, [3]

[21] Guardian Ait Pty Ltd ATF Australian Investment Trust v Commissioner of Taxation [2021] FCA 1619; 114 ATR 136 at [3]. See also section 140, Evidence Act 1995 (Cth) and McCormack v Federal Commissioner of Taxation [1979] HCA 18; 143 CLR 284 at 301 per Gibbs J.

[22] Rejfek v McElroy [1965] HCA 46; 112 CLR 517 at 521, citing, amongst other cases, Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336 at 362.

[23] At 140, [3]. The appeal from this decision was partly dismissed: Commissioner of Taxation v Guardian AIT Pty Ltd ATF Australian Investment Trust [2023] FCAFC 3; 115 ATR 316.

[24] (1990) 168 CLR 614 at 624, citing Gauci v Federal Commissioner of Taxation [1975] HCA 54; 135 CLR 81 at 89.

[25] See Condon v Commissioner of Taxation [2023] FCA 561 at [29].

[26] Upheld on appeal: Bosanac v Commissioner of Taxation [2019] FCAFC 116; 267 FCR 169; Bosanac v Commissioner of Taxation [2019] HCA 41; 93 ALJR 1327 (Nettle J) at [10].

[27] [1989] FCA 135; 20 FCR 288 at 309 citing Federal Coke Co. Pty. Limited v Federal Commissioner of Taxation [1977] FCA 3; 34 FLR 375 per Bowen CJ at 385.

[28] Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; 161 ALR 599 at [15].

[29] Helton v Allen [1940] HCA 20; 63 CLR 691 at 712.