Toomaroo Pty Ltd v Commissioner of Taxation (Cth) [1954] HCA 67

High Court of Australia Webb J. Toomaroo Pty Ltd v Commissioner of Taxation (Cth) [1954] HCA 67

ORDER Appeal dismissed with costs.

Cur. adv. vult.

Webb J delivered the following written judgment:—

Nov. 22 Webb J

This is an appeal by a taxpayer, a pastoral company, from the decision of the Board of Review which affirmed the disallowance by the Commissioner of Taxation of an objection by the taxpayer to the refusal by the commissioner to allow a deduction of £1,081 as depreciation of "plant" in the assessment of the income of the taxpayer for the year ended 30th June 1951. The plant was actually a building in Toowoomba which for part of the income year was used by the taxpayer in connection with the administration of its pastoral business. The taxpayer was one of a group of five pastoral companies all of which had the same managing director and secretary. The members of the staff of all these companies were on the same pay-roll. They shared the same office, and the cost of running the office in any year was apportioned between all the companies on the basis of turn-over in the previous year. The office was in the city of Toowoomba, but the pastoral holdings or properties were in the Cunnamulla-Thargomindah district several hundred miles away. The administration of the pastoral properties was conducted from the Toowoomba office, and included not only accountancy, but also purchases of foodstuffs for station hands and of the plant and equipment for the stations, and arrangements for the reconditioning of plant and equipment. Machinery already or about to be reconditioned or repaired was sometimes parked in the office yard on its way to or from the pastoral properties.

During the year 1949 the taxpayer purchased this building and made structural improvements. Some of the improvements were made during the income tax year in question. However, there were tenants in the building when it was purchased, and the last of these tenants did not vacate the premises until May 1951. Meanwhile, members of the taxpayer's staff began to work in the building as it became available for office use following the departure of the tenants and the necessary structural alterations.