Taxman nod on lEL hunt

Press, 7 September 1989, Page 22

Taxman nod on lEL hunt

AAP Sydney Taxation officers are free to search the premises of Bankers Trust Australia for documents relating to the affairs of Industrial Equity, Ltd (lEL), Mr Justice Einfeld ruled in the Federal Court yesterday. The judge cancelled a temporary injunction which had delayed the search since May 11 this year. lEL and the ' merchant bank had challenged the Tax Commissioner’s decision to conduct the search on the ground that it was an improper use of the power

conferred by Section 263 of the Income Tax Assessment Act. They obtained the injunction the day before the search was to take place at the Bankers Trust premises in the Australia Square Tower. The judge was told the commissioner wanted access to all books, documents and papers relating to transactions conducted with, for or on behalf of lEL for the years ended June 30, 1984, to 1988. The Commissioner was acting on a policy to audit Australia’s top 100 com-

panies. The judge said no objection had been taken to lEL being chosen as one of the top 100. The issue was whether Section 263 could be used for the search on the ground that a general taxation audit was a purpose of the Act. The judge said he was satisfied the conduct of an audit to seek verification of the taxpayer’s liability was one of the Act’s purposes. He dissolved the temporary injunction and ordered lEL and Bankers Trust to pay costs.