Case A67

Judges:
JL Burke Ch
RC Smith M
RE O'Neill M

Court:
No. 1 Board of Review

Judgment date: 10 October 1969.

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J. L. Burke (Chairman) and R. C. Smith and R. E. O'Neill (Members): In his return of income for the year ended 30 June 1968 the taxpayer claimed as deductions under the heading of education expenses the cost of musical instruments purchased for his daughter (D) (born November 1952) and his son (S) (born April 1954) giving the following statement in support-

``Both my children, as part of their full time education, are enrolled for courses in the... College of Music which they are pursuing contemporaneously with their normal High School education. In the taxation year I had to purchase new musical instruments for each of them and these are claimed as deductions.''

The cost of the clarinet purchased for D was $78, the trumpet for S costing $122. It was agreed at the hearing that subject to fair wear and tear each of the instruments could be expected to have a useful life of ten years. The Commissioner has disallowed the deduction on the ground that the cost of musical instruments is not ``education expenses'' defined in sec. 82J(6) as meaning ``expenses necessarily incurred by the taxpayer for or in connexion with full-time education at a school, college or university or from a tutor''.

2. In the income year in question D was in 3rd and 4th Forms studying for the School Certificate at a High School administered by the N.S.W. Department of Education and S was at the same school but he was in 2nd and 3rd Forms. The syllabus for the first four years under which the school operates provides for the compulsory study of music in an ``appreciation type'' course as a non-examinable subject. However music can be taken at both the School Certificate and Higher School Certificate levels as an examination subject in which case the practical examination at the appropriate level is taken through the Australian Music Examinations Board (A.M.E.B.) and a candidate may be presented at the set level even though he has not passed any of the examinations at the lower levels.

3. For several years prior to 1967/1968 D and S had studied the piano and musical theory privately but from July 1967 they attended part time a School of Music for tuition in the clarinet and trumpet respectively. The instruments the cost of which is the subject of the claim were purchased specifically for exclusive use by D and S; they are used by them for practice and are taken by them to the Music School for lessons. D did not take music as a formal subject in the School Certificate Examination but has not yet decided whether to nominate ``music'' for the Higher School Certificate. S is not sitting for music in the School Certificate Examination to be held in 1969.

4. The Commissioner allowed the taxpayer's claim to deduct the tuition fees paid by the taxpayer to the School of Music ($93 in respect of D and $69 for S) in accordance with a broad policy of treating musical

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studies as part of the full time education of a secondary school student irrespective of whether or not music is taken as an examination subject or as a formal course at the school attended full time by the student. For the purpose of this concession the Commissioner accepts the view taken by Boards of Review that the word ``necessarily'' in the definition of ``education expenses'' has the same meaning that it has in sec. 51(1), viz., appropriate or clearly adapted for the end result in view. In the light of the concession, with which we agree, we find without merit the alternative proposition advanced by the Commissioner's representative that the nexus between the cost of the instruments and ``full time education'' is not sufficiently strong to bring the cost within the meaning of ``in connexion with'' full time education for the purposes of the statutory definition.

5. We turn now to the primary submission of the Commissioner that in the context in which it is found in sec. 82J ``expenses'' is limited to outgoings of a recurring nature and does not extend to capital items such as musical instruments. In the first place we think that sec. 82J should be allowed to stand on its own feet and should not be read down, as was submitted, by reference to other concessional deductions provided for in Subdiv. B, Div. 3 of Part III of the Assessment Act. Secondly we are of opinion that to exclude so called ``capital'' items from the scope of the deduction provided for by the section would be an unwarranted restriction thereon. Turning from music, it would be hard to deny the character of an ``education expense'' to the cost of a slide rule purchased for a student of mathematics and yet, in the sense that it has an indefinite life, the instrument could be classified as a capital item. Turning back to music, classical scores could be said to have capital elements in that they are acquisitions ordinarily meant to last but we would not see the cost thereof as being ruled out on the basis that they were not ``expenses'' within the meaning of the statute. So far as ``capital'' items are concerned we regard subsec. (4) as providing the necessary limitation in that, in accordance therewith, the deduction in respect of any one year of income in relation to the education of any one student shall not exceed three hundred dollars.

6. In the instant case the musical courses being pursued by D and S were part of their full time education. The instruments which were purchased for them were for their exclusive use in the pursuit of their musical studies and in our opinion the cost of the instruments was an ``education expense'' as defined for the purposes of sec. 82J.

7. We would allow the taxpayer's claim within the limits prescribed by sec. 82J(4).

Claim allowed