Commissioner of Taxation (Cth) v Finn [1961] HCA 61

High Court of Australia Dixon C.J. Fullagar, Kitto, Windeyer JJ. Commissioner of Taxation (Cth) v Finn [1961] HCA 61

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

Oct. 12 Dixon C.J.

The question for decision is whether the taxpayer is entitled to a deduction from his assessable income for the year ending 30th June 1957 of certain costs of travelling abroad.

The claim for a deduction was disallowed by the Commissioner in his assessment, but upon objection and reference to the Board of Review it was decided that the deduction was allowable under s. 51. From the decision of the Board of Review the Commissioner appealed: his appeal was referred to the Full Court by Fullagar J. The appeal was heard by the Full Court before the death of that very learned judge and he in fact was one of the judges forming the Full Court that heard the argument.

The deduction is claimed by a professional officer in the service of the Government of Western Australia. His claim is that he incurred the expenses of travelling in order the better to fit himself to perform the work which the Western Australian Government required of him, and therefore he became entitled to deduct them under the first limb of s. 51 (1) which provides that all losses and outgoings to the extent they are incurred in gaining or producing the assessable income shall be allowable deductions. The second limb cannot apply because it relates to outgoings of a business and "business" is defined by s. 6 (1) in terms which expressly exclude an occupation as an employee.

It will be seen that the question involved in the case is of an important description. For it is indeed important that officers and employees engaged at a salary in the exercise of a skilled profession should not be in a worse position in respect of the costs of better equipping or qualifying themselves in point of knowledge and skill than are those exercising the same profession as a calling remunerated in fees paid by clients or by the members of the public who, under whatever style, enlist their services. But as the legislation stands such cases cannot, unfortunately, be determined by any very broad proposition of law. For the issue must be whether the expenditure was incurred in gaining or producing the assessable income and, although the meaning and application of this phrase have been elucidated judicially, and perhaps may be further so elucidated, in the end the decision often will depend on the facts of the given case.