Auckram and Commissioner of Taxation (Taxation)

This matter concerned an appeal by the Applicant, Mr. Auckram, against an assessment of assessable income issued by the Commissioner of Taxation. The dispute centred on whether a franked dividend received by the Applicant from a company was assessable income, and relatedly, whether the company had ceased to exist at the relevant time. The decision was made by Linda Kirk SM in the Administrative Appeals Tribunal.

The primary legal issues before the Tribunal were: (1) whether the franked dividend payment constituted assessable income to the Applicant under subsection 44(1) of the *Income Tax Assessment Act 1936* (ITAA 1936); and (2) whether the company from which the dividend was paid existed during the 2016 income year, as contended by the Applicant, or had ceased to exist earlier due to a prior decision concerning social security legislation. The Tribunal was also required to consider whether allegations of fraud or misconduct by the Applicant were sufficient to discharge his burden of proof.

The Tribunal reasoned that the Applicant bore the burden of proving that the Commissioner's assessment was excessive or incorrect. It found that the Applicant's allegations of misconduct or fraud did not discharge this burden. Applying subsection 44(1) of the ITAA 1936, the Tribunal was satisfied that the franked dividend payment of $40,415 received by the Applicant, as the sole shareholder of the company and an Australian resident, was assessable income for the 2016 income year. Regarding the company's existence, the Tribunal noted that under section 601AD of the *Corporations Act 2001*, a company ceases to exist upon deregistration. As the company was deregistered on 21 July 2019, it clearly existed throughout the 2016 income year. The Tribunal rejected the Applicant's argument that a prior decision under the *Social Security Act 1991* had transferred the company's assets to him and caused the company to cease to exist as a separate entity, finding this argument misconceived.

Consequently, the Tribunal was not satisfied that the Applicant had discharged the onus of proof under section 14ZZK of the *Taxation Administration Act 1953* to demonstrate that the assessment was excessive or incorrect. The reviewable decision of the Commissioner was affirmed.