The figures for 1999 were to provide a base line only, the applicants' income in that year not being the subject of any assessment which is presently relevant.
10 As shown in the table, the Commissioner first took a snapshot of the total assets and liabilities of the applicants as at 30 June in each year from 1999 to 2006. That yielded a figure for the net assets of the applicants at each such year-end. In the row labelled "Increase" in the table, the Commissioner calculated the extent to which the net asset figure in a particular year exceeded the net asset figure for the previous year. The Commissioner then subtracted the applicants' non-assessable receipts over the course of the year in question, and added back items of specific expenditure, and outlays for subsistence, of which he was aware. That yielded an income figure for the year by reference to which the applicants were assessed for tax. As shown in the table, the Commissioner was also able to calculate the extent to which the applicants' income, calculated as explained here, had not been disclosed. Finally, the Commissioner "distributed" the total undisclosed income in each year 50/50 as between Mr and Mrs Gashi.
11 The Commissioner's approach as described above was challenged by the applicants at two levels. First, the idea that the Commissioner was entitled to throw a blanket over all of the assets of the Gashi family and to use the movement in those assets as a basis for inferring the existence of a partnership income for Mr and Mrs Gashi was resisted. Secondly, it was submitted that, in adopting this approach, the Commissioner failed to base his calculations of income on the relevant taxing provision of the Income Tax Assessment Act 1997 (Cth) ("the 1997 Act"). It may be one thing, it was submitted, to infer the existence of inflows of some kind from changes in the asset position of the applicants, but that did not justify the Commissioner's assessment unless he identified the provision of the 1997 Act which would treat those inflows as taxable income.
12 The second point mentioned above is answered by reference to the facts of cases. In separate letters to Mr and Mrs Gashi which accompanied his original assessments of 26 March 2010, the Commissioner made it clear that, in each case and in each year, the assessment was of ordinary income pursuant to s 6-5(1) of the 1997 Act. The point must, therefore, be rejected. The first point mentioned above has, in effect, become subsumed in the applicants' own cases on the merits. The availability of the asset betterment method as a tool for use by the Commissioner is well-accepted: see Trautwein v Federal Commissioner of Taxation (1936) 56 CLR 63. In appeals of the present kind, it then becomes the obligation of the applicants, under s 14ZZO of the Administration Act, to prove that the Commissioner's assessments were excessive. They will not succeed in that task unless they can demonstrate that their true taxable incomes in the years in question were less than the income levels by reference to which the Commissioner assessed the tax that was payable by them: Commissioner of Taxation v Dalco (1990) 168 CLR 614. That is to say, it is not enough for the applicants to establish that the Commissioner's estimations were mistaken or erroneous in some or even many respects. It is necessary that they go further and establish what their taxable incomes actually were. If, in the course of that project, they demonstrate that they were not in partnership, and/or that their own incomes did not contribute to accretions in the assets of other members of the family, all well and good. But the bottom line question, as it were, will always be: what were the taxable incomes of the applicants? It is for them to determine how they will go about answering that question. The approach taken, and the assumptions employed, by the Commissioner will not be binding in that arena.
13 Mr Gashi's evidentiary case did not purport to establish what his taxable income was in any of the years 2000-2006. To the extent that that case did have a systematic dimension, it was provided by the evidence of John Kelly, a chartered accountant and registered tax agent. To the extent that his report, dated 13 July 2011, dealt with the position of Mr Gashi, it confined itself to attacking, in accordance with instructions given by Mr Gashi, the Commissioner's asset betterment calculations. Mr Kelly accepted that, from an accounting perspective, he would not use the asset betterment method to calculate the actual income of a taxpayer. He tried to use a more conventional approach to calculate Mr Gashi's income, but the information he was given by Mr Gashi was "copious and confusing", so he resorted to the application of such instructions as he had to attack the task which had been undertaken by the Commissioner.
14 Mr Gashi's own evidence was likewise largely concerned to challenge the Commissioner's asset betterment calculations, or to explain them in ways which would be consistent with him (Mr Gashi) having derived substantial sums from non-income sources. I shall refer to some of the main dimensions of Mr Gashi's evidence in this regard below, but, regardless of whether that evidence would be accepted, it was not of the character that would be necessary to found any, even approximate, conclusions as to the level of his taxable income in each of the years under examination.
15 I shall commence with Mr Gashi's (and, in one instance, Mrs Gashi's) real estate investments, the explanation for which is substantially tied up in a narrative of the Gashi family's story both in Australia and overseas. What I state below is taken from the evidence of Mr Gashi and, save to the extent indicated, should not necessarily be taken as representing findings which the court has made, or would make if the facts concerned were dispositive of any of the questions which arise in Mr Gashi's appeal.
16 Mr Gashi came to Australia from Kosovo in 1978 as a political refugee. Six months later, he secured employment as a sheet metal worker, in which position he worked 10, 12, 14 or even 16 hours a day. He worked at least six days a week, sometimes seven. He accepted whatever overtime was available. He was clearing around $450 a week. In 1979 he bought an apartment at 14 Eldridge Street, West Footscray, at a cost of $17,000. It was in that year that Mr Gashi married his now wife Manuela, who had migrated from Portugal.
17 In 1982, Mr Gashi secured employment in a power station in the LaTrobe Valley. He was again employed as a sheet metal worker, but, as I would interpret his evidence, his position was in the nature of a leading hand. There, he worked six to seven days a week if required, and up to 16 hours a day. In 1983, he purchased a property at 16 Tintern Drive, Springvale South for about $58,000. That sum was made up of the proceeds of the sale of the West Footscray property, of Mr Gashi's savings and of a small borrowing. The Gashis lived in the Springvale South property (while they were based in the LaTrobe Valley) for short periods only, such as, for example, during holidays.
18 They returned to Melbourne 1987. Mr Gashi sold the Springvale South property in 1988 for $135,000. He bought a block of land at 26 Lionheart Avenue, Taylors Lakes for around $40,000. Mr Gashi's intention was to build a house there for his family. By then, he was working not as a sheet metal worker but in a bakery. However, Mr Gashi's mother in Europe became ill, and, in late 1988, in order spend some time with his mother, he and his wife went to Germany to live, where they resided with one of Mr Gashi's brothers. Having been in Germany for about six months, they returned to Australia, intending to settle here permanently. However, one of their daughters was diagnosed with leukaemia, and the doctors told them that Germany presented better prospects for her treatment. Thus, in 1989, the Gashis returned again to Germany.
19 Mr Gashi purchased an apartment in Rastatt, Germany, for about DM330,000. Mr Gashi thinks that the rate of exchange at that time was about two Deutschmarks to the Australian dollar. He funded that purchase in part with money left over from the sale of the Springvale South property (after purchase of the land at Taylors Lakes), plus some savings that he had accumulated in his time in the LaTrobe Valley. While in Germany, Mr Gashi worked as a toolmaker, and also had a business enterprise of his own, in which he purchased cars, and car parts, in that country and took them to Albania (then recently relieved of communist control, and thus permitting such an enterprise) for resale. In this activity and in his employment as a toolmaker, Mr Gashi worked about 16 hours a day, earning in excess of the equivalent of $8,000 each month. The Gashis stayed in Germany for about eight years.
20 It was while Mr Gashi was in Germany this time that, according to him, he and his brothers received a substantial inheritance from the estate of his mother (who, I infer, must have passed away at some point in the early 1990's). This was in the form of land in Kosovo. However, at some point, Mr Gashi made it clear to his brothers that he did not intend to return to Kosovo to live. In the result, it was agreed between them that his brother Ali Arif Gashi would buy him out. Although the contract of sale was not executed until March 2004 (at which time the price was expressed in Euros: €335,000), Mr Gashi's evidence was that the consideration was paid to Mr Gashi, in three instalments, well before then. In his oral evidence, Mr Gashi said that the first instalment was in a sum the equivalent of $84,000, and that he lent this money to a person called Rustem Helshani, who was returning to Australia. In his witness statement (tendered on his behalf, without objection), Mr Gashi placed that transaction at about 1995/96. When Mr Gashi later returned to Australia himself, Mr Helshani repaid this loan, without interest. Mr Gashi placed the money into his account with the ANZ Bank.
21 In 1993, Mr Gashi advanced a sum equivalent to $130,000 to friend called Pashk Zalli, who was a builder who had come to Germany, but was returning to Australia. This money came from Mr Gashi's savings from his employment and car trading business in Germany. Mr Zalli was a builder, and the understanding was that he would use the money to build a home for the Gashis on their block of land at Lionheart Avenue, Taylors Lakes. Unfortunately, Mr Zalli used the money not for that purpose but in the purchase of a bakery in Sunshine. In 2003, Mr Zalli sold the bakery to someone called Joseph Gerbino, on vendor's terms. Over the period 2003-2005, Mr Zalli repaid Mr Gashi, with interest - a total of over $200,000. This money was deposited into Mr Gashi's various accounts with the ANZ Bank.
22 Mrs Gashi and the family returned to Australia in 1997. Mr Gashi returned in 1998. He claims to have brought with him, in his luggage (and undisclosed to customs) the sum of $170,000. He had converted the money into Australian dollars at a currency dealer in Albania. He went to the Australian embassy in Berne to renew his passport, and asked one of the officials what he should do with the money. The official said, "Just take it". In his oral evidence, he said that this money represented the second of three instalments paid to him by his brother as consideration for the land inherited from his mother's estate. However, in his witness statement, tendered after he had given his evidence in chief, Mr Gashi said that the money represented his accumulated savings from his earnings as a toolmaker and from the sale of second-cars and parts.
23 From his return to Australia in 1998 to late 2005, Mr Gashi worked, at the same time and for substantially the whole of this period as I understand his evidence, in three bakeries, one in Altona Gate, one in Glenroy, and the third in Altona. Over these three jobs, he worked 16 hours a day, seven days a week, and earned $2,800 per week. He also bought and sold cars, but in a very small way - earning about $30,000 a year from that.
24 At first after Mr Gashi's return to Australia, he and his family lived in rented premises in Keilor Downs. Then they bought a property at 1 Midland Way, Taylors Lakes, for $205,000. This was funded by $85,000 from the sale of the land in Lionheart Avenue, by $80,000 borrowed from the ANZ bank, and the remainder from savings.
25 In late 1999, Mr Gashi's brother Dan Gashi visited him in Melbourne with a delegation of Albanians living in Kosovo, the purpose being to solicit donations from Australians. While staying with Mr Gashi, Dan gave him the third instalment of the consideration for his share of the land which came to them from their late mother's estate, a sum of about $160,000. Mr Gashi lent this money to someone called Vlado Markovski. In early 2003, Mr Markovski repaid this loan, paying Mr Gashi a sum of about $190,000 to $200,000, which included interest. This repayment was by way of several cheques, which were deposited into Mr Gashi's account with the ANZ Bank.
26 In late 2000, Mr Gashi's brother Ali arranged a transfer of $209,500 to Mr Gashi, representing a gift by Mr Gashi's mother to her granddaughter Victoria, to be available to her upon reaching 18 years of age. The funds were deposited with a solicitor for her benefit. The following year, they were used to purchase a property at 3 Bayview Street, Altona, the price of which was $225,000. The property was placed into the name of Victoria and her mother Mrs Gashi (this arrangement being necessary, according to Mr Gashi, on account of Victoria's relatively young age at the time, her mother being a joint owner in the nature of a guardian).
27 The Gashis lived at Midland way until 2001, when Mr Gashi purchased a property at 39 Herbert Street, Parkdale for about $840,000. This was funded by the sale of Midland Way ($320,000), by about $90,000 of savings in an account in the name of his daughter, Victoria (of which account - as became clear during her evidence in court - she was unaware), by about $80,000 of Mr Gashi's own savings, and by $170,000 which Mr Gashi brought from Germany as described above. The balance was borrowed from the ANZ bank. The property was registered in the name of Mrs Gashi.
28 In July 2003, Mr Gashi purchased a property at 14 Palmerston Crescent, Taylors Lakes for the sum of $625,000. Before settlement, Mr Gashi had received the $200,000 from Mr Markovski referred to in para 25 above, and he paid this into the loan account maintained with the ANZ Bank in his and his wife's names. They borrowed about $400,000 from the bank to complete the purchase of Palmerston Crescent. This property became the family home, and the property at Parkdale was rented out.
29 In June 2004 Mr Gashi purchased a property at 8 Pollock Court, Delahey, for the sum of $160,000. This purchase was funded by an advance of $154, 232 from his ANZ Bank loan account. Six months later, he sold the property for $180,000. In his oral evidence, he claimed that he never received this money, "because the guy turned to be a junkie". However, he made no such claim in his witness statement.
30 In 2005, the Gashis purchased a unit for their daughter Samira at 17 Ross Street, Niddrie for the sum of $472,000. Save for the deposit, the purchase was funded by a loan from the ANZ Bank, on the security of the unit itself and the Gashis' property at Palmerston Crescent. Because Mr Gashi considered that Samira was too young to hold property in her own name, his insisted that Mrs Gashi be a joint registered owner. The unit was sold in 2009 for $650,000.
31 In April 2006, Mr Gashi's family company Gashi Nominees Pty Ltd purchased a coffee shop in Niddrie called Sam's Café for the price of $200,000. The purchase was funded by a loan from the ANZ Bank. Thereafter, Mr Gashi worked 16 hours a day, seven days a week, in the shop. Gashi Nominees later borrowed further sums of $150,000 and $10,000 for renovations and working capital.
32 Mr Gashi gave evidence of other property acquisitions and disposals, either in his own name or in the names of members of his family, but they post-dated the period with which this proceeding is concerned, and do not need to be considered.
33 A striking thing about Mr Gashi's evidence, as referred to above, is that it was not calculated to disclose the level of his income in any of the years in question, nor even to disclose particular transactions from which the generation of income should be inferred. Mr Gashi described himself as a property developer, but it is unclear whether that was a statement of his occupation as at the time of giving evidence or as at the times relevant in the proceeding. If it was intended to propose that Mr Gashi's real estate investments referred to above were the businesslike activities of a property developer, no such submission was made on Mr Gashi's behalf. Neither were the variously, manifestly disconnected, dots joined in a way that would reveal the existence of such a business. Rather, the evidence was directed to providing an explanation for the asset movements referred to in the Commissioner's asset betterment statement. As I have said, that approach is not responsive to the demands of s 14ZZO of the Administration Act.
34 As noted in para 19 above, one of the income earning activities in which Mr Gashi engaged in the years in question was buying and selling cars. His evidence that he earned about $30,000 a year from that activity was, however, both a casual and an approximate estimate, unvouched by any documentation. As to the car trading activity, Mr Gashi was examined in chief as follows:
MR PARNCUTT: Now, I need to take you through a [sic] motor vehicles that you sold. Do you recall a Mercedes - a silver Mercedes that you purchased in about 2004?
THE WITNESS: Yes.
MR PARNCUTT: Yes. How much did you pay for that Mercedes?
THE WITNESS: 2004. I think I pay 20. I am not sure. I think I pay 20. I am not sure.
MR PARNCUTT: 20,000?
THE WITNESS: Yes.
MR PARNCUTT: But you're not sure.
THE WITNESS: Because was a damaged car, so I had to repair.
MR PARNCUTT: Do you recall a Mercedes B180E sedan 1993?
THE WITNESS: Yes.
MR PARNCUTT: How much did you pay for that?
THE WITNESS: 16,000, I think.
MR PARNCUTT: And where did you get the money from?
THE WITNESS: That was from my saving and the money that I work with the cars.
MR PARNCUTT: Did you purchase a BMW 320i coupe 2001?
THE WITNESS: 2001.
MR PARNCUTT: It was a blue one?
THE WITNESS: Blue, yes.
MR PARNCUTT: Yes. How much did you pay for that one?
THE WITNESS: I think was 20 or 21. I'm not sure, sir. Was a damaged car.
MR PARNCUTT: Did you repair the car?
THE WITNESS: Yes.
MR PARNCUTT: Well, I will ..... What did you do with the car?
THE WITNESS: I trade it in through my Hilux.
MR PARNCUTT: You traded it in for a Toyota Hilux?
THE WITNESS: Toyota Hilux.
MR PARNCUTT: Okay. What was the trade in price given to you for the car?
THE WITNESS: 3000, my memory.
MR PARNCUTT: Can you tell me about a VW Golf Tourer.
THE WITNESS: Golf Tourer. A damaged car. $1000, I think I pay. I'm not sure.
MR PARNCUTT: Do you know what year it was?
THE WITNESS: I think was '76, '78. I'm not sure. I can't recall.
MR PARNCUTT: What condition was it in when you purchased it?
THE WITNESS: In a - damaged car.
MR PARNCUTT: And how much did you sell it for?
THE WITNESS: I think I sold for the same money, because I wouldn't be able to fix it or something. I'm not - really, I can't recall. That was too long.
MR PARNCUTT: What can you tell the court about a Nissan Pathfinder 2000?
THE WITNESS: Yes, I bought a damaged car and I fixed it.
MR PARNCUTT: How much did you pay for it?
THE WITNESS: I think I pay about 6000. I'm not sure.
MR PARNCUTT: And what did you do with the vehicle?
THE WITNESS: I have sold the vehicle.
MR PARNCUTT: Did you sell it in the same condition?
THE WITNESS: No, I did fix it and repair it.
MR PARNCUTT: Can you tell the court about a BMW 318i sedan 1995?
THE WITNESS: BMW, 1995.
MR PARNCUTT: The black BMW.
THE WITNESS: Yes, yes, yes.
MR PARNCUTT: Well, can you tell the court about that?
THE WITNESS: I bought it 6000 - $6000 I bought it. Yes.
MR PARNCUTT: And what condition was it in?
THE WITNESS: Not very good. Is just damaged.
MR PARNCUTT: And what did you do with the vehicle?
THE WITNESS: I have sold it, I think, or I don't - I'm not 100 per cent .....
MR PARNCUTT: What did you do with the proceeds from the sale of the BMW 318i?
THE WITNESS: 31
MR PARNCUTT: From that vehicle. What did you do with the proceeds?
THE WITNESS: The black one, yes? I think I sold that vehicle, I'm not sure, or - no, I think I have accident with that. I'm sorry. I apologise.
MR PARNCUTT: What can you tell the court about a Toyota Rav4 five door?
THE WITNESS: I have bought it and sold it to Frank. Rav4, I have bought and sold to Frank.
MR PARNCUTT: And how much did you buy the vehicle for?
THE WITNESS: 20,000.
MR PARNCUTT: And how much did you sell it to Frank Ozbeyhun?
THE WITNESS: Was 36.
MR PARNCUTT: And what can you tell the court about a Nissan Pathfinder 2000?
THE WITNESS: I bought that car and was damaged and fixed it.
MR PARNCUTT: I beg your pardon?
THE WITNESS: I bought the car and I - was damaged and I fixed it.
MR PARNCUTT: And how much did you pay for it?
THE WITNESS: 2000 was, yes, because I have two Pathfinders in that same
MR PARNCUTT: Well, could you
THE WITNESS: 2000 was 6000 and I'm not sure how much I sold it, because I got - I can't recall it. I got short memory, I think.
MR PARNCUTT: Did you use any of the proceeds from the sale of motor vehicles to buy other motor vehicles?
THE WITNESS: Yes, sir. Always I done that.
…
MR PARNCUTT: …, can you state anything to the court about a Mercedes ML?
THE WITNESS: Yes. I bought to through the Mercedes company and I think I pay 75,000 and the sale of both Pathfinder 2002 or 2003 - I'm not sure which one was - that deposit I put it there and the rest of the money I took from my account or borrow, something like that. I can't remember everything.
MR PARNCUTT: Well, do you recall anything about a BMW 2002?
THE WITNESS: Yes.
MR PARNCUTT: What do you recall?
THE WITNESS: That the 2002 was damaged car, then I fixed it and I trade it in to that Hilux.
For a taxpayer seeking to discharge the onus placed on him under s 14ZZO of the Administration Act, this testimony was quite inadequate for that purpose.
35 The other admitted income earning activity in which Mr Gashi engaged was in his three bakery jobs. He said that he earned $2,800 per week in these employments, but no single contemporaneous documentary record of that income was produced. He said that he had not been provided with group certificates by one of the relevant employers, but he likewise pointed to no other evidence such as might have assisted in the quantification of that income (such as bank deposits, for example). Mr Gashi's estimate that he earned $2,800 per week in these employments represents a much higher income than that which he returned in the years in which he did lodge a return. I do not accept it. As with his income from trading in cars, to provide a single weekly estimate of income by way of conventional wages over a seven-year period, unvouched by any record, is a completely inadequate way of making good the case which s 14ZZO of the Administration Act requires. I would add that no other witness was called to support Mr Gashi's evidence in these respects - neither the employers concerned, nor the two accountants which Mr Gashi engaged over the relevant period.
36 There is also some other, limited, evidence which suggests that Mr Gashi may have had remunerative activities in one of the years in question in addition to those which he was prepared to admit. On 6 February 2001 in the Magistrates Court of Victoria at Melbourne, Mr Gashi pleaded guilty to one charge of being in possession, custody or control of excisable goods, namely, a quantity of tobacco leaf, upon which excise duty had not been paid, contrary to s 117 of the Excise Act 1901 (Cth). The offence had been committed on 7 July 2000, at or near Craigieburn. On that day, Mr Gashi was apprehended while driving a hired station wagon, the rear compartment of which was wholly occupied by a large bale of tobacco leaf. The quantity and circumstances were such that the tobacco would not have been for Mr Gashi's own use, and he did not claim that it was. Rather, he said that the other occupant of the car had organised the collection of the tobacco from an address near Seymour (from where the tobacco had in fact been collected) and that he, Mr Gashi himself, had merely gone along for the ride. His mistake was, it was said, to be in the wrong place at the wrong time. I do not accept that evidence. When giving it, and when responding to questions about the tobacco generally, Mr Gashi was hesitant, evasive and manifestly uncomfortable. I find that he hired the car and used it to collect the tobacco from Seymour. As he pleaded in the Magistrates Court, he was in possession of the tobacco when apprehended. The inference that he had received, or would receive, payment for the tobacco, or remuneration for his efforts, is very readily available, and I have no hesitation in drawing it. The fact that the tobacco as such was seized by the police and later forfeited to the Commonwealth does not weaken the inferential case that Mr Gashi's mission was an income-earning one. Because he gave no truthful evidence about the circumstances, Mr Gashi was in no position to assert, and he did not assert, that the non-delivery of the tobacco to its intended recipient deprived him of any remuneration for his efforts.
37 Much of the trial was concerned with sums which the Commissioner included in the specific expenditure row of the table in para 9 above, namely, "funds sent overseas". The Commissioner had a schedule of many such transfers, each usually just below the $10,000 reporting threshold, from which, in the Commissioner's case, the existence of substantial unexplained income should be inferred. In his modifications to the Commissioner's asset betterment calculations, Mr Kelly included these transfers only to the extent that the customer ordering them was Mr Gashi (ie according to the bank records which the Commissioner had obtained). During the cross-examination of Mr Gashi, counsel for the Commissioner put to him that he had also been responsible for many more transfers, ostensibly made in the name of others. Mr Gashi denied it, and there was no evidence that he had been so responsible. In the result, a very considerable amount of the cross-examination of Mr Gashi ultimately came to nothing in terms of admissible, useful, evidence.
38 Mr Gashi did not claim complete ignorance of the many transfers which were on the Commissioner's schedule but of which he was not the ordering customer. His ability to have claimed complete ignorance would no doubt have been compromised by the circumstance that, in many of those cases, the international recipient of the funds was his brother Dan. Mr Gashi understood that Dan's reputation as a reliable point of destination for charitable donations made by members of the Albanian expatriate community in Australia had grown since the visit to which I referred in para 25 above. While I found Mr Gashi's explanations of the matters unconvincing, the fact is that he denied what was put to him during cross-examination, and the Commissioner led no admissible evidence on the subject.
39 By leading evidence from Mr Kelly which accepted the relevance of the overseas transfers ordered by himself, Mr Gashi effectively conceded that his income in the years in question included at least the sums there involved. But that limited concession went no way towards establishing what Mr Gashi's income in fact was in any of the relevant years. It went no further than to recognise that, from the unproven level of income that he did have, he made certain outlays.
40 In the result, I am left with no alternative but to find that Mr Gashi has fallen well short of establishing the amount of his assessable income in any of the years 2000-2006. He has, therefore, failed to show that the Commissioner's assessments were excessive within the established jurisprudence under s 14ZZO of the Administration Act. His appeal in relation to assessments of taxable income must be dismissed.
41 The Commissioner's case with respect to Mrs Gashi was neatly encapsulated in the following paragraph of submissions made on his behalf:
The Commissioner may, in forming his judgment of the assessable income of a taxpayer, include income derived by other entities associated with a taxpayer: see for example, Dalco at 626-7; Eldridge v. Federal Commissioner of Taxation 90 ATC 4907. The Commissioner may identify a total amount of income and divide it equally between taxpayers: Eldridge v. Federal Commissioner of Taxation 90 ATC 4907 at 4911. Where this occurs it is not necessary for him to show that the taxpayers were engaged in a partnership for the purposes of section 92 of the ITAA 1936. The division of identifiable income merely forms part of the Commissioner's process of estimation and assessment. It remains incumbent on each taxpayer to establish that the assessment issued to him or her is excessive.
That is all very well so far as it goes, and there is no suggestion that the Commissioner was not entitled to make an assessment by reference to that approach. But the present question is whether that assessment was excessive and, in relevant respects, whether Mr and Mrs Gashi were in partnership or in receipt of income jointly. That question is not answered conclusively against Mrs Gashi by reference only to the jurisprudence which is applicable at the level of the Commissioner. Let it be accepted that Mrs Gashi would not have discharged her onus of proof under s 14ZZO of the Administration Act merely by challenging particular aspects of the Commissioner's assessment (as Mr Gashi has done), the fact is that she has gone further and led evidence that she was not in partnership with her husband.
42 Mrs Gashi's evidence, and that of Mr Gashi, was that she was a housewife only, and played no role in whatever her husband's business dealings might have been. She accepted that she derived income from two properties, one of which was in her name, and the other of which (in Germany) was held jointly with her husband. The Parkdale property was also, it seems, made available as security for some other property investments which Mr Gashi made. However, it is quite clear that Mrs Gashi simply co-operated in whatever her husband sought of her, whether it be lending her name to a bank account, making her property available as security, or anything else. With respect to Mr Gashi's broader income-producing activities, whatever they may have been, I find that he and Mrs Gashi were not carrying on business as partners, and were not in receipt of income jointly.
43 Mr Kelly took an approach to the calculation of Mrs Gashi's income very different from that which he had taken in the case of her husband. In Mrs Gashi's case, he considered that he had sufficient information to calculate her actual income over the relevant years. He took into account social welfare receipts, rent and interest. The rent related both to the apartment in Germany which Mrs Gashi owned jointly with her husband and to the property at Herbert Street, Parkdale. Mr Kelly's report with respect to Mrs Gashi was tendered by her without objection. In final submissions made on his behalf, the Commissioner sought to criticise Mr Kelly for not having accompanied his report with all of the primary documents to which he had had reference, as required by para 2.4 of Practice Note CM 7. That was a valid criticism, but it was made too late. Not only was the report, and the details of Mrs Gashi's income which it contained, received into evidence without objection, Mr Kelly was not challenged on the correctness of those details while under cross-examination. Indeed, in one respect cross-examining counsel proceeded in a way that implied acceptance of the details: in criticising the approach which had been taken in the case of Mr Gashi, he held out the approach taken in the case of Mrs Gashi as an instance of how things should have been done.
44 Mr Kelly's calculations of Mrs Gashi's assessable income over the years in question yielded the following results:
• 2000 - $14,607.88
• 2001 - $16,416.93
• 2002 - $27,971.36
• 2003 - $25,822.08
• 2004 - $44,182.53
• 2005 - $63,112.68
• 2006 - $58,520.85