The Administrative Review Tribunal has delivered a decision in favour of the Commissioner of Taxation in proceedings brought by a Western Australia-based mining entrepreneur concerning the treatment of amounts alleged to be related party loans and gifts: ZFPR and Commissioner of Taxation [2025] ARTA 572.
The taxpayer, an experienced company director who moved to Australia from China, claimed that the amounts were hongbao or “red packet money” received from friends/family members, and payments referable to investments and loans. The Commissioner contended that the taxpayer engaged in fraud or evasion.
Following an 8 day hearing, the Tribunal rejected the taxpayer’s case and affirmed the Objection Decision under review, which concerned multiple assessments across 9 years.
The Tribunal addressed the burden of proof borne by taxpayers in Part IVC proceedings. The taxpayer’s reliance on the Full Court’s decision in Commissioner of Taxation v Cassaniti [2018] FCAFC 212 was rejected where “the cross examination entirely undermined the ability of the Tribunal to be confident that the books and records were a true reflection of the transactions they purported to record.”
The decision also addresses an adjournment application made by the taxpayer following the first day of the taxpayer’s 3 day cross-examination, on the basis that the taxpayer wished to replace his legal team.
Greg O’Mahoney and Neha Dubey acted for the Commissioner of Taxation.
The decision can be accessed here:
https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/ARTA/2025/572.html