TOC Processing Pty Ltd and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal reviewed a decision of the Commissioner of Taxation concerning TOC Processing Pty Ltd. The Commissioner had treated certain "unexplained deposits" into the applicant's merchant facility account as assessable income, issuing amended and default assessments for the 2012 and 2013 income years, along with penalties and shortfall interest. TOC Processing contended that these deposits represented payments from an overseas company, South East Horizon Info-Tech (SEHI-T), for which it provided payment processing services for a fee.

The Tribunal was required to determine whether the unexplained deposits to TOC Processing's account constituted assessable income. This involved assessing the weight to be given to the applicant's evidence, particularly the witness statements of its director, Mr. Brett Goldsworthy, which were admitted into evidence but could not be subject to cross-examination due to his ill health. The Tribunal also had to consider the applicant's explanation that the funds were subsequently transferred to other entities to facilitate international payments, as direct international transfers were not possible from the applicant's bank facility.

The Tribunal reasoned that the burden of proof rested with the applicant to demonstrate that the Commissioner's amended assessments were excessive. While the applicant's director provided witness statements detailing the alleged payment processing arrangements with SEHI-T, the Tribunal found these statements lacked sufficient detail and contained inconsistencies, such as differing accounts of his experience in the payment processing industry. Crucially, the applicant failed to produce contemporaneous records to substantiate its claims regarding the commercial arrangements and the nature of the deposits. The Tribunal noted that despite efforts to contact overseas witnesses and the impact of the COVID-19 pandemic, the applicant had not discharged its onus of proof.

The Tribunal affirmed the Commissioner's decision.