Ready Mixed Concrete (Vic) Pty Ltd v Commissioner of Taxation (Cth) [1969] HCA 12

High Court of Australia Kitto J. Ready Mixed Concrete (Vic) Pty Ltd v Commissioner of Taxation (Cth) [1969] HCA 12

ORDER Appeal allowed with costs. Assessment remitted to the Commissioner to be amended by allowing pursuant to s. 62AA a deduction of $14,899 in respect of the transit mixers referred to in the notice of objection other than No. 196.

Cur. adv. vult.

March 28 Kitto J. delivered the following written judgment:—

This appeal raises questions as to the meaning and application of s. 62AA of the Income Tax Assessment Act 1936-1966, a section which was inserted by the amending Act No. 39 of 1962. By sub-s. (5) of that section a taxpayer is entitled to an allowable deduction from his assessable income of the first year in which certain manufacturing plant is used, as manufacturing plant, for the purpose of producing assessable income. The deduction is of an amount equal to one-fifth of the taxpayer's expenditure on that manufacturing plant, but it is allowable only where the expenditure was of a capital nature and the plant was new plant for use by the taxpayer in Australia for the purpose of producing assessable income.

During the year ended 30th June 1967, the appellant purchased, for sums totalling (after sales tax refunds), $74,494, certain articles called transit mixers for use in producing assessable income in connexion with its business of a producer and supplier of ready mixed concrete. The main element in a transit mixer is a drum resembling a large steel barrel, on its side but tilted towards one end. At the higher end it has an opening and a receiving attachment into which wet concrete or the ingredients for it may be poured. Outside the lower end, which is closed, there is a motor and a chain-drive for rotating the drum. Around the interior surface of the drum and welded to it is a helical blading which will mix the contents when the drum is revolved and move them in a forwards or backwards direction according as the drum revolves one way or the other. The unit includes a gear-box with the necessary levers for regulating the speed and direction of revolution of the drum: it may be made to revolve forwards (at a speed of either two or eighteen revolutions per minute) or backwards so as to eject the contents from the opening at the higher end. The complex is completed by a water tank, a water meter and a hose, by means of which measured quantities of water may be added to the contents of the drum when the consistency, or "slump", of the mixture so requires. The unit is constructed to be mounted on a truck or similar vehicle so that, while doing its work in connexion with the concrete inside, it may be transported from the producer's plant, the "batching plant", to the place where the customer requires it to be delivered. The mixer depends for its operation upon its own motor only.