De Simone v Commissioner of Taxation

[2009] FCAFC 181

FEDERAL COURT OF AUSTRALIA

De Simone v Commissioner of Taxation [2009] FCAFC 181

TAXATION – income tax – partnership – finding by Administrative Appeals Tribunal of scheme to obtain deduction – purpose of scheme – whether taxpayer must have relevant purpose

ADMINISTRATIVE LAW – Administrative Appeals Tribunal – lengthy adjournment granted to enable applicant to issue summons for attendance of witness – applicant aware that summons not properly served – witness fails to appear at resumed hearing – further adjournment refused – whether request for further adjournment reasonable – whether applicant given reasonable opportunity to present case – whether denied natural justice

Administrative Appeals Tribunal Act 1975 (Cth) s 44(1)
Administrative Appeals Tribunal Regulations 1976 (Cth) reg 15
Income Tax Assessment Act 1936 (Cth) s 92
Income Tax Assessment Act 1997 (Cth) s 8‑1

Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 cited
Calder v Federal Commissioner of Taxation 2005 ATC 5050 applied
Commissioner of Taxation v Consolidated Press Holdings Pty Ltd (2001) 207 CLR 235 applied
Federal Commissioner of Taxation v Cooke 2004 ATC 4268 applied
Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 applied
Price Street Professional Centre Pty Ltd v Federal Commissioner of Taxation (2007) 243 ALR 728 cited
Sullivan v Department of Transport (1978 20 ALR 323 cited

GIUSEPPE DE SIMONE and SERAFINO DE SIMONE v COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

VID 405 of 2009

SUNDBERG, STONE AND EDMONDS JJ
22 DECEMBER 2009
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 405 of 2009

ON APPEAL FROM THE FEDERAL COURT

BETWEEN:

GIUSEPPE DE SIMONE
First Appellant

SERAFINO DE SIMONE
Second Appellant

AND:

COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
Respondent

JUDGES:	SUNDBERG, STONE AND EDMONDS JJ
DATE OF ORDER:	22 DECEMBER 2009
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The appellants pay the respondent’s costs of the appeal.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 405 of 2009

ON APPEAL FROM THE FEDERAL COURT

BETWEEN:

GIUSEPPE DE SIMONE
First Appellant

SERAFINO DE SIMONE
Second Appellant

AND:

COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
Respondent

JUDGES:	SUNDBERG, STONE AND EDMONDS JJ
DATE:	22 DECEMBER 2009
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

BACKGROUND

1. In the 1999 year of income the appellants were investors in a proposed theatrical production called “Jolson – The Musical”. Investment in the production was promoted by Michael Brereton, a lawyer experienced in the entertainment industry. The financing of the production involved a partnership in which investors would be the partners. Their capital contributions would provide the initial finance, with subsequent funding to be derived from the revenue generated by the staging of the production.

2. Each partner was to contribute $500,000 to the partnership. The partnership would be managed by…