Doonan and Bradshaw

In *Doonan and Bradshaw*, the parties were the applicants, Doonan and Bradshaw, and the respondent, the Commissioner of Taxation. The dispute concerned the Commissioner's assessment of income tax against the applicants for the 2015 and 2016 income years. The applicants sought to object to these assessments, but their objection was disallowed by the Commissioner. Consequently, the applicants lodged an application with the Administrative Appeals Tribunal (AAT) to review the Commissioner's decision.

The primary legal issue before the Tribunal was whether the applicants had established that the Commissioner's decision to disallow their objection was incorrect. This required the Tribunal to consider the nature of the income received by the applicants and whether it constituted assessable income under the *Income Tax Assessment Act 1997* (Cth). Specifically, the Tribunal had to determine if certain payments received by the applicants were in the nature of income or capital.

The Tribunal's reasoning focused on the characterisation of the payments. It applied the established legal principles for distinguishing between income and capital, considering factors such as the regularity of payments, the intention of the parties, and the source of the funds. After analysing the evidence, the Tribunal concluded that the payments received by the applicants were of a capital nature and therefore not assessable income. The Tribunal found that the Commissioner had erred in treating these payments as income.

The Tribunal set aside the Commissioner's decision and substituted its own decision, allowing the applicants' objection. This meant that the income tax assessments for the 2015 and 2016 income years were to be recalculated without including the disputed payments as assessable income.