Federal Commissioner of Taxation v Green [1950] HCA 20

Appl AAT cose 7987, No 11.874 (1997) 36ATR 1007

See. G3), igre LR 158

81 C.L.R.] OF AUSTRALIA.

[HIGH COURT OF AUSTRALIA.]

FEDERAL COMMISSIONER OF TAXATION APPELLANT ;

AND GREEN 3 § 4 5 : 6 RESPONDENT. ON APPEAL FROM THE SUPREME COURT OF QUEENSLAND.

to which they are incurred in gaining or producing the assessable income, or are necessarily incurred in carrying on a business for the purpose of gaining or producing such income "—Tacpayer a director of several companies—Owner of shop premises in country—Investments—Business—Moneys paid to accountant for keeping books and for audit—Moneys paid to daughter for clerical work performed at home—Travelling expenses—Private or domestic nature—Income Tax: Assess- ment Act 1936-1945 (No. 27 of 1936—No. 4 of 1945), s. 51 (1).

The taxpayer, a re

ident of Brisbane, who was a director of several com- panies and the owner of shops in North Queensland, derived his income from director's fees, rent from the shops, interest from Commonwealth loans, dividends from companies and interest on mortgages. He engaged and paid an accountant to keep and audit books, paid his daughter an annual sum for clerical work performed at his home in connection with his affairs, particularly during his absence, and incurred travelling expenses in visits to the shop premises. In respect of these items he claimed deductions from his assessable income, but they were disallowed by the commissioner.

On appeal from the decision of the commissioner Philp J. found that it was reasonably necessary for the taxpayer to keep books and records, to have them audited and to have some person in attendance at Brisbane to deal with matters in his absence and that it was also' reasonably necessary for him to inspect and supervise the shop properties.

Held, that the evidence supported the findings and that in the circumstances the items were allowable deductions under s. 51 (1) of the Income Tax Assess- 'ment Act 1936-1945 as outgoings incurred in gaining or producing assessable income, and that it was immaterial that there might be difficulty in holding that the taxpayer was carrying on with continuity an identifiable business of some particular description.