Payne, Andrew v Commissioner of Taxation of the Commonwealth of Australia [1998] FCA 758

FEDERAL COURT OF AUSTRALIA

INCOME TAX – Allowable deductions within the meaning of s 51(1) of the Income Tax Assessment Act 1936 (Cth) – whether expenses for travel between two places of income production were incurred in gaining or producing the assessable income – Appeal from Administrative Appeals Tribunal – error of law – relevant legal principle to be applied in considering allowable deductions – "essential character of the expenditure" – necessity to consider whole of factual matrix in which expenditure occurred when characterising outgoing – whether there is a distinction between "related" and "unrelated" sources of income derivation in wording of s 51(1) – whether "prerequisite to earning of assessable income" principle of Lunney & Hayley v Commissioner of Taxation of the Commonwealth of Australia (1958) 100 CLR 478 is conclusive where travel between two independent places of income production – relation of travel expenses to whole of earning of assessable income – Whether to remit to Administrative Appeals Tribunal. ADMINISTRATIVE LAW – Procedural fairness – Appeal from Administrative Appeals Tribunal – whether tribunal made its decision on basis of matters outside issues agreed to between the parties – whether existence of agreed issue between the parties.

Income Tax Assessment Act 1936 (Cth) - s 51(1) Administrative Appeals Tribunal Act 1975 (Cth) - s 44 Taxation Ruling IT 2199 Garrett v FCT (1982) 58 FLR 101 – discussed, explained, approved Lunney and Hayley v Commissioner of Taxation of the Commonwealth of Australia (1958) 100 CLR 478 - discussed and distinguished Ronpibon Tin NL & Anor v Federal Commissioner of Taxation (1949) 78 CLR 47 - considered W Neville & Co Ltd v Federal Commissioner of Taxation (1936-37) 56 CLR 290 - referred to Commissioner of Taxation of the Commonwealth of Australia v Smith (1980-81) 147 CLR 578 - considered Federal Commissioner of Taxation v Cooper 91 ATC 4396 - considered Federal Commissioner of Taxation v Green (1950) 81 CLR 313 - considered Commissioner of Taxation v Genys (1987) 17 FCR 495 - considered In Re The Income Tax Acts (1903) 29 VLR 299 - discussed and distinguished Taylor v Provan (Inspector of Taxes) (1975) AC 194 - discussed Case F 43 74 ATC 245 - discussed Federal Commissioner of Taxation v Collings 76 ATC 4254 - cited