Kho and Commissioner of Taxation

[2007] AATA 1232

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1232

ADMINISTRATIVE APPEALS TRIBUNAL  )        No WT2001/3875-3876                
  )        
TAXATION       APPEALS        DIVISION   )

Re MARK KHO

Applicant

And COMMISSIONER OF TAXATION  

Respondent

DECISION

Tribunal Mr B.H. Pascoe, Senior Member  

Date13 April 2007

PlacePerth

Decision The Tribunal varies the decisions under review to the extent of allowing as a deduction in each of the relevant years so much of the deductions claimed in relation to the Northern Rivers Tea Tree Oil Projects as were represented by actual cash outlays of the applicant which were not of a capital nature with a determination under s 177F of the Income Tax Assessment Act 1936 that the excess over such amounts is not an allowable deduction and the Tribunal remits these matters to the respondent with a direction to issue amended assessments to give effect to this decision.  

.........(Sgd. Mr B H Pascoe).............

Senior Member

INCOME TAX – investment in tea-tree oil farming project – allowable deductions – application of Part IVA – whether Federal Court decision can be distringuished – validity of determination under Part IVA

Income Tax Assessment Act 1936

Re Basten and Others and Commissioner of Taxation [2007] AATA 1128

Re Princi and Others and Commissioner of Taxation [2007] AATA 1119

REASONS FOR DECISION

13 April 2007 Mr B.H. Pascoe, Senior Member  

1.      These are applications for review of decisions of the respondent to disallow objections to amended assessments of income tax in relation to the years ended 30 June 1997 and 30 June 1998.  The amended assessments were issued to disallow deductions claimed for expenses incurred in respect of the planting, cultivation and maintenance of a tea-tree farm and the production of tea-tree oil.  The claims arose from the participation by the applicant in the project known as the Northern River Tea-Tree Project (the project).

2.      Pursuant to s 34J of the Administrative Appeals Tribunal Act 1975 the parties consented to the review being determined without a hearing and the Tribunal having regard to the evidence and submissions in the matter of Re Basten and Others and Commissioner of Taxation [2007] AATA 1128. The Tribunal is satisfied that the issues for determination on the review of the decision can be adequately determined in the absence of the parties.

3.      The applicant’s circumstances and contentions in these applications are identical to those considered by the Tribunal in Re Basten (supra).  Having regard to the evidence and submission in that matter it is appropriate that the decision there should apply to this applicant for the reasons set out therein and the decision in Re Princi and Other and Commissioner of Taxation [2007] AATA 1119.

I certify that the 3 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B H Pascoe, Senior Member.

Signed:         ......(Sgd. Ms R Riberi).................
  Associate

Date of Hearing  Heard on the Papers
Date of Decision  13 April 2007

Solicitor for the Applicant          Mr D Romano

Wilson & Atkinson

Solicitor for the Respondent     Mr T Burrows

Australian Government Solicitor