Commissioner of Taxation v Day [2008] HCA 53

HIGH COURT OF AUSTRALIA

GUMMOW, KIRBY, HAYNE, HEYDON AND KIEFEL JJ

COMMISSIONER OF TAXATION APPELLANT

AND

SHANE DAY RESPONDENT

Commissioner of Taxation v Day

[2008] HCA 53

12 November 2008

S315/2008

ORDER

Appeal dismissed with costs.

On appeal from the Federal Court of Australia

Representation

D H Bloom QC with K J Deards for the appellant (instructed by Australian Government Solicitor)

M L Brabazon with A H Rider for the respondent (instructed by Leitch Hasson Dent Solicitors)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Commissioner of Taxation v Day

Income tax – Allowable deductions – Respondent taxpayer incurred legal expenses in defending charges under the Public Service Act 1922 (Cth) – Income Tax Assessment Act 1997 (Cth) ("ITAA"), s 8-1(1) allowed deductions from assessable income of losses or outgoings incurred "in gaining or producing … assessable income" – Whether legal expenses incurred "in gaining or producing" assessable income – Connection requisite – What is productive of income.

Public service – Disciplinary procedures – Standards of conduct required of an "officer" of the Australian Public Service ("the Service") – Role and duties of officer of the Service – Relevance of incidents of public office to whether legal expenses incurred in gaining or producing assessable income.

Income tax – Allowable deductions – ITAA, s 8-1(2) provided that losses or outgoings of "private or domestic nature" could not be deducted – Whether legal expenses incurred by respondent of private nature.

Words and phrases – "deductibility", "incurred in gaining or producing … assessable income", "in the course of", "legal expenses", "private or domestic nature".

Income Tax Assessment Act 1997 (Cth), s 8-1.