W Thomas & Co Pty Ltd v Commissioner of Taxation (Cth) [1965] HCA 54

High Court of Australia Windeyer J. W Thomas & Co Pty Ltd v Commissioner of Taxation (Cth) [1965] HCA 54

ORDER Appeal allowed. Case remitted to the Commissioner to re-assess tax in accordance with the finding of the Court.

Cur. adv. vult.

The following written judgment was delivered:—

Nov. 3 Windeyer J.

This is an appeal from the Commissioner of Taxation who disallowed the taxpayer's objection to an amended assessment in respect of the year of income ended 31st October 1961, a period adopted by this taxpayer in lieu of that ending on 30th June. The taxpayer lodged its return on 31st January 1962 and an assessment was issued on 28th February 1962 on the basis of a taxable income of £50,901. This amount was arrived at on the assumption that an amount of £5,082 10s. 1d., claimed to have been incurred for repairs to part of the taxpayer's premises, was an allowable deduction. The tax so assessed was paid. Later, namely on 12th March 1963, the Commissioner, after some correspondence with the taxpayer in the meantime, issued his amended assessment on the basis that the deduction for repairs ought not to have been allowed.

The expenditure in question was incurred for work done upon a building called the Berry Building, which the taxpayer company had purchased during the year in question. Two questions arise. One is whether the expenditure was "expenditure for repairs not being expenditure of a capital nature" within the meaning of s. 53 of the Income Tax and Social Services Contribution Assessment Act 1936-1962 Cth. The other is whether the Commissioner had any power to amend his original assessment. The taxpayer's contention, duly raised by its notice of objection, is that it had in its taxation return made to the Commissioner a full and true disclosure of all the material facts necessary for his assessment and that therefore, by virtue of s. 170 (3), no amendment was permissible except to correct an error of calculation or a mistake of fact. It is not said that there was an error of calculation or mistake of fact. The Commissioner has expressly said there was not. Counsel for the taxpayer put in the forefront of his case reliance upon the sufficiency and the truth of what was told to the Commissioner as to the work done upon the building. But the onus being upon the taxpayer to bring its case within s. 170 (3) (McAndrew v. Federal Commissioner of Taxation [1] ) counsel, after some discussion, recognized the need to call evidence of the nature of that work so that I might judge of the sufficiency and truthfulness of the description of it. The other question is whether, apart from any question of the truth or sufficiency of the taxpayer's statements, the expenditures in question were or were not in fact of such a nature as to be allowable deductions under s. 53. The Commissioner's attitude is that the whole of the sum of £5,082 10s. 1d., represented by expenditure on different items, was wholly outside s. 53. The taxpayer's contention is that the whole amount is allowable.