Rowsthorn and Commissioner of Taxation (Taxation)

The applicant, Rowsthorn, appealed to the Administrative Appeals Tribunal (AAT) against a decision of the Commissioner of Taxation (Commissioner) disallowing a deduction for capital expenditure incurred in relation to a stallion. The applicant had established a corporate structure through which the stallion was used, and the dispute concerned whether the applicant had used the stallion for a taxable purpose, specifically for the purpose of gaining or producing his assessable income.

The Tribunal was required to determine whether the expenditure incurred by the applicant in relation to the stallion was deductible under the relevant provisions of the *Income Tax Assessment Act 1997* (Cth). This involved considering whether the stallion was used by the applicant for the purpose of producing assessable income, and whether the applicant had maintained adequate records to substantiate any claims for deductions.

Deputy President Forgie P affirmed the Commissioner's decision, reasoning that the applicant had failed to demonstrate that the stallion was used for the purpose of gaining or producing his assessable income as an individual. The Tribunal noted that the applicant had established a corporate structure, and the income generated by the stallion was likely to be that of the company, not the applicant personally. The absence of records regarding the income and expenses of the stallion further supported the conclusion that the applicant had not discharged his onus of proof.