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Technical decision summary – Undisclosed cash sales and liability for shortfall penalties

Goods and services tax: Cash sales; Tax Administration Act 1994: Shortfall penalties, onus and standard of proof.

The issues considered in this dispute were:
▪ Whether the unexplained deposits made into the bank accounts of the shareholders and the family trust are undisclosed cash sales of Company X for GST purposes.
▪ Whether Company X is liable for shortfall penalties for evasion under s 141E or, in the alternative, gross carelessness under s 141C or not taking reasonable care under s 141A.

There was also a preliminary issue on the onus and standard of proof

Source: govt.nz

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