Bartlett v Commissioner of Taxation; Falcetta v Commissioner of Taxation [2003] FCA 1125

FEDERAL COURT OF AUSTRALIA

Bartlett v Commissioner of Taxation; Falcetta v Commissioner of Taxation [2003] FCA 1125 INCOME TAX – whether the deduction for expenditure incurred of the kind referred to in s 25-5 of the Income Tax Assessment Act 1997 (Cth) should be interpreted in a narrow manner which limits the expression "tax affairs" to income tax as assessed under the Income Tax Act 1986 (Cth) or whether the expression extends to forms of tax which a taxpayer may owe to the Commissioner of Taxation but which are not the subject of assessment and which are not tax imposed under the Income Tax Act 1986 (Cth) – whether expenditure for managing tax affairs is deductible under s 8-1 of the Income Tax Assessment Act 1997 (Cth). WORDS AND PHRASES – "tax affairs" Income Tax Act 1986 (Cth) Income Tax Assessment Act 1936 (Cth) s 226G, s 227(3) Income Tax Assessment Act 1997 (Cth) s 8-1, s 25-5, s 960-100, s 995-1 Taxation Administration Act 1953 (Cth) s 14ZZO Tax Law Improvement Act 1997 (Cth)

Commissioner of Taxation v Clyne (1958) 100 CLR 246 – referred to Commissioner of Taxation v Dalco (1990) 168 CLR 614 – applied Grain Elevators Board (Vic) v Dunmunkle Corporation (1946) 73 CLR 70 – referred to Hooker Rex Pty Ltd v Federal Commissioner of Taxation (1988) 88 ATC 4392 – approved Smith's Potato Estates Ltd v Bolland [1948] 2 All ER 367 – cited Ian Charles Bartlett v Commissioner of Taxation N793 OF 2002 Max Falcetta v Commissioner of Taxation N792 OF 2002 HILL J 21 OCTOBER 2003 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N793 OF 2002

BETWEEN: IAN CHARLES BARTLETT

APPLICANT

AND: COMMISSIONER OF TAXATION

RESPONDENT

JUDGE: HILL J

DATE OF ORDER: 21 OCTOBER 2003

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The appeal be allowed in part. 2. The respondent's objection decision dated 3 June 2002 in respect of the applicant's amended assessment issued on 6 February 2001 for the income year ended 30 June 1999 be set aside. 3. The objection be allowed in part by allowing to Mr Bartlett a deduction in the sum of $3,090. 4. The matter be remitted to the Commissioner of Taxation to be reassessed in accordance with these orders. 5. The applicant and the respondent file and serve submissions on costs within seven days. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.