Willeroo & Manbullo Ltd v Commissioner of Taxation (Cth) [1964] HCA 51

High Court of Australia Kitto J. Willeroo & Manbullo Ltd v Commissioner of Taxation (Cth) [1964] HCA 51

ORDER Order in each appeal: Appeal allowed with costs. Amended assessment remitted to the Commissioner in order that he may make a further amendment of the assessment by giving effect to the objections dated respectively 30th May 1960 and 9th December 1960.

Cur. adv. vult.

Sept. 4 Kitto J. delivered the following written judgment:—

These two appeals relate to the income tax payable by the appellant upon income derived in the year ended 31st October 1958. The Commissioner issued a notice of assessment on 1st April 1960 and the appellant objected that the assessment was excessive for having allowed too little for depreciation in respect of certain structural improvements described generally as a road train base. By a notice of amended assessment of 17th November 1960 the Commissioner notified an increase of the assessment, and the appellant objected that the amendment wrongly reduced the deduction allowed for depreciation in respect of certain cattle movers and cattle trailers generally called road trains. The question raised by each objection was whether the relevant deduction for depreciation should have been calculated, as the Commissioner considered, solely under s. 54 of the Income Tax and Social Services Contribution Assessment Act 1936-1958 Cth, or, as the appellant contended, under that section and s. 57AB in combination.

Under s. 54 (1) depreciation is an allowable deduction if it is depreciation during the year of income of any property, being plant, which is owned by the taxpayer and used by him during that year for the purpose of producing assessable income. "Plant" is defined by s. 54 (2) to include structural improvements on land which is used for the purposes of pastoral pursuits, other than (inter alia) structural improvements used for domestic or residential purposes except where the improvements are provided for the accommodation of employees, tenants or sharefarmers engaged in or in connexion with those pursuits. But units of property in respect of which depreciation is allowable under s. 54 qualify under s. 57AB for a special and more ample depreciation allowance than otherwise would apply to them if they fulfil either of two descriptions. They must be either (a) structural improvements situated on land in the Northern Territory used during the year of income for the purposes of agricultural or pastoral pursuits and completed after 30th January 1952 or (b) not structural improvements but, during the year of income, used for the purposes of agricultural or pastoral pursuits in the Northern Territory, or installed ready for use for those purposes, and either first used by the taxpayer for the purpose of producing assessable income, or first installed ready for use for that purpose, after 30th June 1952. This provision does not apply to motor vehicles designed primarily and principally for the transport of persons.