Ermelinda Kovacs, instructed by the Australian Government Solicitor, successfully appeared for the Commissioner of Taxation in the recently decided WCVB v Commissioner of Taxation [2024] AATA 1259.

The Tribunal found that the taxpayer, a special purpose vehicle in a large property development group:

– failed to discharge its onus of proving that it had not constructively derived income under s 6-5(4) of the ITAA 1997 in connection with a contract it was not a party to;

– failed to discharge its onus of proving that it was entitled to a deduction for construction costs it contended it had “incurred” within the meaning of s 8-1 of the ITAA 1997; and

– failed to discharge its onus of proving that the penalty assessed by the Commissioner for recklessness, with an uplift for obstruction, was excessive.

This case turned on the cross-examination of the controller of the corporate group about the taxpayer’s dealings with: (a) multiple entities within the group; (b) various financiers of the group; and (c) entities with which the group proposed to enter into a joint venture.

A copy of the decision may be found here.