Case K9

HP Stevens Ch

RE O'Neill M
CF Fairleigh QC

No. 1 Board of Review

Judgment date: 29 March 1978.

H.P. Stevens (Chairman): I have had the opportunity of reading the reasons of my colleague, Mr. Fairleigh, and, as I am in agreement with the conclusion reached by him, it is strictly unnecessary for me to say anything further. However a brief comment might not be out of place on one particular matter.

2. The taxpayer in his submissions stressed a point that had been made in his grounds of objection, viz., that because he grew vegetables, etc., he was a primary producer. In layman's terms this is correct in the sense that without his efforts there would have been no vegetables, etc., produced. Unfortunately the mere fact of ``producing'' vegetables and fruits does not satisfy the respective provisions of the Income Tax Assessment Act - if it did every home gardener would be a primary producer. What is required is that a taxpayer carry on a ``business'' of primary production. One of the elements to be considered in determining whether a business is being carried on is whether the activities concerned could reasonably ever be expected to result in a profit. Here, despite over 20 years of operations, a profit has never been made nor is one in expectation.

ATC 99

3. As a result, whilst I can appreciate the taxpayer's view that he is a ``primary producer'', I cannot, after a consideration of the evidence as a whole, reach the conclusion that he was carrying on a business of primary production. Accordingly I would uphold the Commissioner's decisions on the objections at issue and confirm the assessments for the years ended 30 June 1973 and 1974 respectively.

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