The Full Court agreed with Lindgren J's analysis that "these subsections, like s 177F, do not make the existence of any particular state of mind of the Commissioner in relation to the making of the determination a condition of the power to make it and, by virtue of subs 177(1), it is not open to the [taxpayers] to make the Commissioner’s state of mind and reasoning processes leading to the making of the determinations under subss 136AD(1), (2) and (4) an issue in the appeals".
Specifically, the Full Court rejected the taxpayers' argument that failure to provide particulars of what the Commissioner took into account in making his determinations resulted in an "incontestable impost" and not a tax. The Full Court held that, in the objection and appeal proceedings, the taxpayers bore the onus of proof of establishing that the arm's length consideration was less than that determined by the Commissioner. If they could do that, the Commissioner's objection decision would by set aside and substituted by a decision allowing the objection. On this basis, s 136AD does not provide for an "incontestable tax".
WR Carpenter Holdings Pty Ltd v FCT  FCAFC 103 (Full Federal Court, Heerey, Stone and Edmonds JJ, 11 July 2007).
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