J McCarthy & Co Pty Ltd v Commissioner of Taxation (Cth) [1953] HCA 71

High Court of Australia Taylor J. J McCarthy & Co Pty Ltd v Commissioner of Taxation (Cth) [1953] HCA 71

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgment was delivered by:—

Nov. 9. Taylor J.

The taxpayer, which is a company carrying on business at Alexandria near Sydney, was, in 1945, required by a requisition or direction of the Department of Labour and Industry of the State of New South Wales to provide certain facilities or "amenities" for its employees. It was not possible to provide these facilities in the company's existing premises and, accordingly, it caused a new building to be erected on its land, the construction of which was completed prior to May, 1946. The building contains a men's and women's dining-room, rooms with locker accommodation for male and female employees and washing and changing rooms.

In its returns of income for the income years ended 30th June 1946, 30th June 1947, and 30th June 1948, respectively, the company claimed as deductions from its assessable income depreciation calculated on the cost of the construction of this building and the provision of the fittings and equipment therein contained. The deductions claimed in relation to the income of the years referred to was respectively £1,115, £1,272 and £1,287. Deductions of these amounts were, however, not allowed but after some correspondence between the parties deductions in relation to the income of these years were allowed to the extent of £272, £541 and £448 respectively. These amounts represented the appropriate deductions for depreciation in respect of various items contained in the building such as furniture, lockers, plumbing, toilet equipment and internal partitions, all of which the commissioner was prepared to treat as plant for the purposes of the relevant provisions of the appropriate Acts. But the company claims that the commissioner should also have allowed deductions in respect of the cost of erecting the building itself. The differences between the amounts claimed in each year as a deduction and the amounts which were allowed are it is agreed, the appropriate additional amounts which should be allowed in each year if the company's contentions are correct.