In the case of Jacob Berghofer v C of T – Mr Berghofer appealed against the tax return lodged by his own accountant – while he lost the case, the significant aspect was that he was appealing against the assessability of grants received as a subsidy from the government due to the introduction of the tree clearing guidelines in QLD – these were determined to be ordinary income.

In the case of Lilyvale Hotel Pty Ltd vs C of T the ATO failed to prove that the taxpayer had failed the same business test to claim losses.  This case presents the matter of agency and the fact that while a business operation may be undertaken under a management agreement by a third party (related or otherwise), the entity that is the principal that issues the management agreement is still seen to be operating the business that is the subject of the management agreement.

In the case Sonntag v C of T, the taxpayer was successful in having penalties reduced from 75% to 25% due to incorrectly reporting PAYG credits on his tax return, due to extenuating circumstances.

In WRBD v C of T, it was identified at the administrative tribunal that a “literal” interpretation of the law is not always appropriate and that it is important to apply the legislation taking into account what the “intention” of its application ultimately is.