In one of my earlier blogs I referred to the Commissioner highlighting the difficulty faced by the tax office when attempting to find an acceptable counterfactual in a Pt IV A challenge. Unless such a counter-factual is found, establishing that the taxpayer obtained a tax benefit becomes impossible.
In the case of Commissioner of Taxation v.Axa Asia Pacific Holdings Ltd 2010 ATC 20-224;  FCAFC 134; a similar situation arose and a counterfactual could not be found to establish that the respondent taxpayer had obtained a tax benefit. The court hinted that it may still be possible to prove that another entity related to the respondent had obtained a tax benefit. But there was no assessment raised against the related entity.
In the most recent Decision Impact Statement on the case the Commissioner returns to the problem and favours raising multiple assessments:
“The court’s conclusion on the evidence in this case that a different taxpayer, AXA Health, would have obtained a tax benefit raises implications for future cases. At least in income benefit cases, the Commissioner may need to consider raising multiple assessments. This will depend on the particular facts of a case.”
Are we in for multiple assessments in Part IV A challenges in the future?.