13 May 1414 Partial success for property developer on re-hearing - Thorpe
A property developer and former solicitor has been partially successful on the re-hearing of his review by the Administrative Appeals Tribunal. The Tribunal allowed some further deductions on the evidence, but decided that an amount of money advanced to the taxpayer by a client was a loan, and repayment of that amount was not deductible.
The Commissioner had issued amended assessments to the taxpayer, substantially increasing his assessable income in the relevant years and imposing a penalty on the basis that the taxpayer had been reckless in not disclosing income from a real estate development. The taxpayer objected, the Commissioner allowed the objections in part, and reduced the taxable income, with a proportional reduction in penalty. The matter went to the Tribunal, which handed down a decision in September 2011: Re Thorpe and FCT  AATA 638.
The taxpayer’s appeal to the Federal Court was allowed by consent, and the matter remitted to the Tribunal, differently constituted, to be heard and decided again with the hearing of further evidence: Thorpe v FCT  FCA 997.
The Commissioner consented to those orders on the basis that it conceded the Tribunal erred in law in substantially reproducing the Commissioner’s submissions as its reasons, without attribution.
On re-hearing, the Tribunal commented that the taxpayer’s business records appeared to have been less than accurate, and quite unconventional. Nevertheless, on the evidence before the Tribunal, certain further expenses incurred in the real estate development were found to be deductible. However, again on the evidence, the Tribunal found that a sum of money advanced to the taxpayer by a client was a loan to him, and repayment of the money was not deductible. The penalty was affirmed, subject to adjustment in the light of the further allowable deductions.
Re Thorpe and FCT  AATA 210 (Ms G Ettinger, Senior Member, 10 April 2014).