Commissioner of Taxation (Cth) v Western Suburbs Cinemas Ltd [1952] HCA 28

High Court of Australia Kitto J. Commissioner of Taxation (Cth) v Western Suburbs Cinemas Ltd [1952] HCA 28

ORDER Appeal allowed. Decision of the Board of Review set aside and the commissioner's decision restored. Respondent to pay the costs of the appeal.

Cur. adv. vult.

J Kitto delivered the following written judgment:—

June 11 Kitto J

In this case the Commissioner of Taxation appeals against a decision of a Board of Review upholding an objection lodged by the respondent company against an assessment of the income tax payable by it in respect of income derived during the year ended 30th September 1947.

The company carries on business as a motion picture exhibitor in six suburban theatres, including the Melba Theatre, Strathfield. The company's return of income of that year included a profit and loss account in which there was a debit of £4,463 3s. 4d., described as "Major repairs written off: Repairs as per Architect's Certificates vide Schedule "B" ". Schedule B was a document headed "Dissection of Architects Certificates Herewith", and it showed a total sum of £4,463 3s. 4d. in respect of repairs as distinguished from improvements, that total sum including £1,509 9s. 0d. in respect of the Melba Theatre, Strathfield. With Schedule B was an architect's certificate dated 1st December 1947 which certified that of a total sum of £15,066 10s. 11d. expended on account of work carried out at the Melba Theatre, Strathfield, a number of items which in fact total £1,509 9s. 0d. were expended on repairs and replacements, the balance being attributed to certain "other works". Amongst the items totalling £1,509 9s. 0d. was an item of £603 0s. 0d., which appeared thus:—"The existing Celotex ceiling was in a bad state of repair, and it was found that the cost was not warranted as the work would be unsatisfactory in the way of repairs so a new fibro ceiling was installed. To have carried out repairs including scaffold to the old ceiling we estimate the cost would have been £603 0s. 0d."