Case L45
Judges: HP Stevens ChCF Fairleigh QC
JR Harrowell M
Court:
No. 1 Board of Review
J. R. Harrowell (Member): These references concern a medical practitioner in practice on his own account employing his wife as a part-time secretary. The matters relate to the years ended 30 June 1972, 1973 and 1974. In those years the taxpayer claimed deductions which included:
ATC 284
1972 1973 1974
$ $ $
Salary to his wife 3,245 3,417 3,876
Superannuation contribution
in respect to his wife 3,200 3,200 3,200
2. The Commissioner, in the first instance, issued assessments adjusting the taxable incomes as returned as follows:
1972 1973 1974
$ $ $
Taxable income as returned 8,447 7,774 6,073
Superannuation contribution
reduced to 10% of salary allowed in
respect of wife 2,876 2,875 2,875
Salary to wife allowed to extent of
$3,250 167 626
Deduction for rent paid ($1,600)
allowed to extent of 800
------ ------ ------
Amended taxable income $11,323 $10,816 $10,374
------ ------ ------
Date of issue 21.5.73 3.6.75 3.6.75
3. On 14 May 1974 the Commissioner issued an amended 1972 assessment by increasing the deduction for contribution to the superannuation fund from $324 to $400. However a further amended 1972 assessment was issued on 9 September 1975 disallowing the contributions altogether in terms of sec. 82AAC on the grounds that the amount paid ($3,200) had not been paid or set apart by 30 June 1972.
4. On 14 June 1979 the Commissioner issued amended assessments for 1973 and 1974 which had the effect of allowing the salary paid to the wife for those years in full with a consequential increase of $17 and $63 in respect of the superannuation contribution based on 10% of salary. The 1974 amended assessment also allowed the full deduction of $1,600 for rent paid.
5. In due course these matters come before this Board and the issues to be determined are set out in the Commissioner's reg. 35(1) statement as follows:
``(i) The amount of $3,200 claimed to have been paid to the... Superannuation Fund during the year ended 30 June 1972 for the benefit of (the taxpayer's wife) was not set apart or paid by 30 June 1972 as required by sec. 82AAC.
(ii) The Commissioner correctly exercised his discretion in terms of sec. 82AAD in restricting the deduction for superannuation contributions for the benefit of (the taxpayer's wife) to $342 for 1973 and $388 for 1974.
(iii) No special circumstances exist which would justify the Commissioner allowing greater deductions for superannuation contributions for the benefit of (the taxpayer's wife) in any of the years ended 30 June 1972, 1973 and 1974 in terms of sec. 82AAE.''
6. The taxpayer had graduated in medicine in 1941. He enlisted in the Army and saw service in the Northern Territory and the Pacific Theatre during World War II. His wife to be also served in the Pacific Theatre as a lieutenant in the Army in which she served for four years. During that period she was attached to the 2/1st Australian General Hospital and at the end of the war she was attached to a southern New South Wales hospital. Her duties were administrative.
7. She met the taxpayer for the first time at this latter hospital where he was attached as a doctor. She then was posted interstate to a hospital where she carried out duties in the
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Administrative Section of the Repatriation Department.8. In her role as a commissioned officer attached in an administrative capacity to a hospital she became accustomed to medical terminology and the handling of patients. Her duties took her into the wards where she was required to roster the nurses. At that period she was a qualified shorthand typist.
9. She returned from her final interstate posting and she and the taxpayer were married in 1947.
10. Following their marriage the taxpayer did locum work in various country and suburban areas. At the end of 1947 he accepted a position as assistant to a practitioner in a heavily populated area adjacent to Sydney.
11. On 15 August 1949 they moved to their present home in that area where the taxpayer commenced practice on his own account. The house had been built to their requirements. The surgery rooms were at the front with an entrance of their own and the two storeyed five bedroomed residence was at the back with its separate side entrance. The surgery area comprised a consulting room, waiting room, a reception room and later was added an examination room and a secretary's office.
12. During the relevant years the taxpayer saw patients by appointment. Prior to those years the surgery accepted patients as they presented themselves here referred to as ``open surgery''. The change to the appointment system caused patient numbers to drop. Statistic samples taken over the three year period indicate the following weekly average number of patients seen by the taxpayer:
1972 133
1973 132
1974 123
13. No statistical figures on patient numbers were placed before the Board in respect of prior years but the parol evidence of all witnesses supported the view that the average weekly numbers of patients seen by the taxpayer would have been higher than the abovementioned figures.
14. Prior to the introduction of appointments there were three surgeries per day:
- 9 a.m. to 12 noon
- 2 p.m. to 3 p.m.
- 6.30 p.m. to 7.30 p.m.
15. The evening surgery although shown as ending at 7.30 p.m. generally went on until about 9 p.m. in the summer and often as late as 11 p.m. in the winter.
16. Following the introduction of the appointment system in 1971 and during the relevant years the taxpayer held two surgeries 9 a.m. to mid-day and 3 p.m. to 6 p.m. on four days of the week. On Thursday he was engaged in surgery (operations) at the local district hospital during the morning and commenced surgery at 2 p.m. going through until 6 p.m. On Saturday morning surgery finished at 12.30 p.m. It presumably commenced at 9 a.m. but the evidence was not clear on this. Saturday morning surgery was discontinued sometime in 1972 or early 1973. However the taxpayer continued to see patients if they sought an appointment but in that later period he did not advertise a regular Saturday surgery.
17. The taxpayer's wife (the wife) has been closely associated with her husband's practice of medicine since their marriage in 1947. However it was not until after they moved to their present home in 1949, with its surgery attached, that she commenced working for him in a full-time capacity. Between 1950 and 1955 she performed the normal functions of a doctor's secretary but without pay. No other secretary was employed during that period.
18. She was paid $1,196 for the year ended 30 June 1955. During that year the taxpayer also engaged a full-time secretary. From then on the wife performed the secretarial functions outside the normal working hours and during normal working hours whenever the secretary was not in attendance.
19. Between 1955 and 1963 five persons held the position of full-time secretary. In 1963 a Miss P was appointed secretary and is secretary today but now on a part-time basis. For the purpose of these references she was the full-time secretary during the relevant years and she gave evidence at the hearing.
ATC 286
20. During the years in question the full-time secretary commenced work at the surgery at 9 a.m. and worked through to 5.30 p.m. with a break between 1 and 2 p.m. for lunch. On Thursdays she commenced at 2 p.m. and worked through to 5.30 p.m.
21. Her duties required her to attend to the telephone, make appointments, receive payments, make out receipts, attend to the banking, write out patients' cards, attend to filing and generally assist the doctor. She was not trained in typing and so correspondence and reports were generally typed by the wife who had the necessary training and experience.
22. The house and surgery had two sets of telephones, one for the practice and one for private purposes. The surgery telephone system comprised three handsets and five locations situated in the hallway, reception, bedroom beside where the wife slept, surgery and rumpus room. The permanent handsets were in the hall and bedroom, the locations used a transportable handset. At non-surgery times the telephone was switched from downstairs to the bedroom upstairs. The private telephone comprised three handsets, one in the kitchen, one in the rumpus room and one in the bedroom.
23. Throughout the relevant years the appointment system was in operation. In common with most general practitioners the taxpayer provided a twenty-four hour service. The service outside normal surgery hours dealt with emergency cases only. It fell to the taxpayer's wife to provide the secretarial assistance during those periods when the full-time secretary was not on duty. It was the doctor's practice to avoid personally answering the surgery telephone other than in an emergency. At no time, certainly after 1949, did he ever install or use a telephone answering service at his home.
24. In addition to the normal work of a general practitioner the doctor, as already stated, performed operations at the hospital on Thursday mornings and he was also an honorary (medical cases) at that hospital, a position he has held for some twenty-five years. Although now not engaged in obstetric work he did have some thirty-six obstetric patients a year during the years before us.
25. His position as an honorary at the local hospital required him to work one week-end in every eight commencing 6 p.m. on Friday night and ending at 6 a.m. Monday morning. Under normal circumstances he was not expected to be in attendance at the hospital during that period of duty, but he was required to be on call.
26. His wife's duties as secretary normally commenced at 5 p.m. when she would take over from the secretary. She would be briefed by the secretary as to appointments for the evening surgery and on pathology results which were collected early that day and rung through in the evening. The last appointment was normally for 6 p.m. but as not all patients were dealt with by the doctor within the quarter hour period allotted the surgery often went on until about 7 p.m. At the conclusion of surgery it was the task of the wife to clean up the consulting room, sterilize the instruments and file patients' cards, etc. Normally she would finish by 8 p.m.
27. On retiring for the night the surgery telephone was switched through to the bedroom telephone. Emergency calls during the night were answered by the wife who would deal with them or refer them to the taxpayer.
28. There was no regular pattern of night calls in regard to the years before the Board. In earlier times when the practice was being established and before the appointment system night calls were more frequent. Night calls tended to arise more when the taxpayer was duty honorary at the hospital and when he was engaged in obstetric work. The point was that the telephone had to be attended even if only to answer one emergency call.
29. In the morning the surgery telephone commenced ringing between 6.30 and 7 a.m. and onwards. Between those times and 9 a.m. the wife would be present to take calls, get out patients' cards for morning surgery, other than Thursday mornings, and put out clean surgery towels. The secretary would take over at 9 a.m. and be briefed by the wife. The secretary would be on duty until 1 p.m. when the wife would be on duty again during the lunch hour.
30. On Thursday mornings the wife would be on duty until 2 p.m. If the taxpayer had no operations that morning he would attend to patients who called.
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31. The wife was on duty for Saturday morning surgery and any emergency work on Sunday.
32. In the taxpayer's notice of objection the wife's hours of work in a normal week were summarized as follows:
Number
of days Hours
Hours per week per week
7.30 a.m. to 9 a.m. 4 6
1 p.m. to 2 p.m. 5 5
7.30 a.m. to 1 p.m.*
(Thursdays) 5 1/2
5 p.m. to 8 p.m. 5 15
7.30 p.m. to 12.30
p.m. (Saturdays) 5
---
36 1/2
---
* In evidence the time of 1 p.m. was corrected to 2 p.m.
33. In addition to the abovementioned hours the taxpayer was in telephone attendance as already stated.
34. Whenever the secretary was absent her place would be taken by the wife. In 1964 the secretary had a thyroid operation and was away for some time, in about 1969 she broke her hip and was off for six months and in October 1978 she broke a leg and was off for a further six months and now works only on Mondays and Tuesdays. The wife now works for the rest of the week.
35. Neither the taxpayer nor his wife took regular holidays. Since 1962 she has had three or four holidays but in 1975 she and the taxpayer went overseas for six months. She has had no holiday break since 1975. Occasionally the taxpayer has taken a fishing holiday, a locum taking his place. The wife remained at the surgery to advise the locum on patient background information. Both the taxpayer and the secretary in evidence paid tribute to the wife's detailed knowledge of the patients and their history.
36. A superannuation fund was established by a deed dated 27 June 1972 naming the taxpayer and his wife as trustees. Clause 1 of the deed provided that the fund would come into operation on or before 30 June 1972. The deed laid down that the taxpayer as the employer could pay to the trustees such periodical contribution to the fund as he in his absolute discretion shall from time to time decide upon. When making the relevant contribution the employer had the right to allocate the same between the members (employees) of the fund.
37. Clause 7 gave the trustees wide powers of investment.
38. Under the rules of the fund male members could retire at 65 and female members at 60. However a member not retiring on reaching the stipulated age he or she could continue membership as if the normal retiring age had not been reached.
39. Rule 2 provided for application for membership of the fund to be made in the form prescribed by the trustees.
40. The deed, after one small amendment had been effected, was approved by the Commissioner for the general purposes of sec. 23F by letter dated 6 January 1975.
41. On 29 June 1972 the trustees passed the following resolution:
``RESOLVED that the sum of $3,200 be received from (the taxpayer) as contribution for the year ended 30th June 1972 in respect of (the taxpayer's wife).''
42. As a result of this resolution the wife became a member of the fund although no evidence could be produced to show that she had applied in terms of rule 2 supra. In fact there was nothing to indicate that the trustees had prescribed a form of application in the terms of that rule. Notwithstanding that omission the wife, as trustee, attended the meeting which passed that resolution so that she was well aware of the fact that she was now a member of the fund and that $3,200 had been contributed to her credit.
43. The contributions made by the taxpayer to the trustees in respect of the years 1972, 1973 and 1974 may be summarized as follows:
* The actual amounts of these cheques were $3,432.50 and $3,696.00, the differences of $232.50 and $496.00 being interest paid in respect of deposits lodged by the fund with a corporation related to the taxpayer.
44. At all relevant times the wife was the only member of the fund and in terms of the resolutions passed by the trustees the three contributions of $3,200 each were credited to her in the fund together with the income of the fund for those years less expenses.
45. In arriving at the quantum of the annual contribution of $3,200 the taxpayer had cognizance of a circular issued to tax agents by the Commissioner in March 1970. Based on his agent's interpretation of that circular the taxpayer had tendered the following calculations:
Date of Birth: 19 June 1920
Anticipated Date of Retirement: 19 June 1980
Year Ended Year Ended Year Ended
30 June 1972 30 June 1973 30 June 1974
Salary 3,250 3,417 3,876
Growth in Salary @4% 1,040 957 930
------ ------ ------
Salary 1980 $4,290 $4,374 $4,806
------ ------ ------
7 x Salary 1980 30,030 30,618 33,642
Less, Benefits provided
(earnings rate - 5%) - 4,728 9,138
------ ------ ------
To be provided $30,030 $25,890 $24,504
------ ------ ------
Maximum Annual
Contribution $3,145 $3,180 $3,603
------ ------ ------
Contribution Made $3,200 $3,200 $3,200
------ ------ ------
46. The following figures compare the benefits derived by the wife from the practice, by way of salary and superannuation contributions, with the doctor's own income from the practice:
1972 1973 1974
Net income from medical practice before
charging salary and superannuation
contributions in respect of wife $17,344 $16,597 $15,001
------ ------ ------
Less Salary --- wife 3,245 3,417 3,876
Superannuation contribution --- wife 3,200 3,200 3,200
------ ------ ------
6,445 6,617 7,076
------ ------ ------
Net income of taxpayer
from practice $10,899 $9,980 $7,925
------ ------ ------
Division of net income (percentage) % % %
Wife 37.16 39.87 47.17
Taxpayer 62.84 60.13 52.83
------ ------ ------
100.00 100.00 100.00
------ ------ ------
ATC 289
47. The secretary, Miss P, the other employee of the taxpayer, was not invited to become a member of the fund nor did she expect an invitation. At the time the fund was established in June 1972 Miss P was 60 years of age and had been employed by the doctor for nine years against the wife's paid service period of seventeen years plus at least six years unpaid service.
48. Apart from accidents and ill-health (para. 34) there had been a break in Miss P's period of employment. This occurred in 1975 when the taxpayer and his wife went overseas for some six months and closed the surgery. For personal reasons Miss P took that as an opportunity to retire. She reversed that decision on the return of the taxpayer and resumed duties with him. However this premature retirement occurred subsequent to the years in question.
49. The taxpayer's return of income for the year ended 30 June 1972 contained a schedule relating to the superannuation contribution of $3,200. The schedule contained the following statement relating to the purpose of the fund:
``(a) To offer an inducement for employees to stay for a longer period of time.
(b) To make provision for the superannuation of (the wife).
The taxpayer, in common with other employers, finds it difficult to retain staff for any length of time, owing to the present over-full employment in Australia. There are no employees at present who have been with him for a long time (except (the wife)) and, therefore, he contributed this year only for the benefit of (the wife).''
50. On the facts before the Board if one excludes the details of the wife's service to the practice which have already been set out, the taxpayer had five changes of secretaries prior to Miss P's appointment (para. 19).
51. For 1971 and the relevant years the following provides a comparison of the salaries paid to the wife and to Miss P:
The wife Miss P
1971 $2,586 $2,538
1972 3,245 2,949
1973 3,417 3,417
1974 3,876 3,944
52. The Commissioner has accepted the fund and has accepted the wife as an eligible employee whose right to receive benefits from that fund are fully secured and so with one exception the requirements of sec. 82AAC are met. In respect of 1972 the Commissioner treated the contribution as not set apart or paid by 30 June 1972 and disallowed the total contribution for that year.
53. In this instance the employee is related to the taxpayer by marriage and in terms of sec. 82AAD is associated with the taxpayer as defined in sec. 82AAB. Under sec. 82AAD the Commissioner has the power to allow the superannuation contribution in respect of that employee only to the extent to which, in the opinion of the Commissioner, the amount or amounts would have been paid if the employee had not been associated with the taxpayer. In these references the Commissioner exercised his discretion and reduced the contributions paid for 1973 and 1974.
54. Section 82AAE provides that the amounts set apart or paid to the fund:
``(a) shall not exceed whichever is the greater of the following amounts:
- (i) Four hundred dollars; and
- (ii) five per centum of the total remuneration paid to the employee by taxpayers during the year of income of the employee that, in the opinion of the Commissioner, corresponded to the firstmentioned year of income in respect of his employment by those taxpayers;''
55. Under sec. 82AAE(b) the Commissioner if he considers special circumstances exist may allow a greater sum than ascertained under (a) to the extent he considers reasonable. In this instance the Commissioner took the view that special circumstances did not exist.
56. It was argued by counsel for the taxpayer that, firstly, in respect of 1972 the taxpayer's contribution to the fund had been paid or set apart by 30 June 1972 and so did not contravene sec. 82AAC. Secondly, special circumstances did exist and that sec. 82AAE(b) applied.
57. Section 82AAC requires two things; firstly, that the amount being provided by
ATC 290
the taxpayer for the benefit of an eligible employee must be set apart or paid in the year of income. Secondly, the right of that employee to the benefit is fully secured. In these references in the year ended 30 June 1972 the taxpayer drew a cheque for $3,200 on 28 June 1972 in favour of the fund and it was credited to the fund's bank account on 30 June 1972. The cheque was debited to the taxpayer's personal bank account on 3 July 1972. It should be pointed out that 30 June 1972 fell on a Friday and 3 July 1972 was a Monday, the first day of business in July. In essence the representative of the Commissioner argued that the contribution of $3,200 claimed by the taxpayer in respect of the year ended 30 June 1972 had not been paid in that year. He argued that at 30 June 1972 the personal account showed a credit balance of $958.25 to which was added a deposit of $2,900 on 3 July 1972. Therefore there were insufficient funds to meet the cheque for $3,200 until after 30 June 1972. Such an argument requires evidence to show that the taxpayer had no overdraft facility and no such evidence was placed before the Board. For the reasons stated by my colleague, Mr. C.F. Fairleigh Q.C., I would hold that the contribution of $3,200 to the fund was made during the year of income which ended on 30 June 1972.58. The next point to consider is whether the amounts so set apart or paid during the relevant years for the benefit of the employee (the wife) were set apart or paid so as to secure the right of the wife to that benefit.
59. On the evidence before the Board the taxpayer contributed $3,200 to the fund for each of the three relevant years. On the date each cheque was debited to his personal account there were off-setting deposits of $2,900, $3,400 and $4,100 respectively.
60. With regard to the fund it received the contribution each year together with interest. As each deposit was made a sum was withdrawn from the account to leave a credit balance not exceeding $200. The amounts withdrawn in 1972 and 1973 totalled $6,400 and this amount was loaned to a proprietary company associated with the taxpayer. A sum of $3,600 withdrawn in 1974 was loaned to the taxpayer's Discretionary Trust No. 2.
61. No evidence was tendered to support a view that the three annual contributions may have only been a round robin of cheques creating perhaps a mere paper benefit to the employee. Instead the Commissioner by reducing the deductions in respect of the 1973 and 1974 years clearly indicated that he had accepted the fund and that it met the requirements of sec. 82AAC.
62. This leaves for decision the quantum of the deductions claimed and this involves sec. 82AAD (employee associated with the taxpayer) and sec. 82AAE (special circumstances).
63. My approach is to consider first if special circumstances existed, sec. 82AAE(b), to warrant a greater deduction than would be allowed under sec. 82AAE(a). If the answer is in the affirmative then it is necessary to consider sec. 82AAD.
64. In this case the wife attended in person and gave evidence and so did Miss P, and of course the taxpayer. I accept their testimony.
65. A medical practitioner in general practice on his own account is, in the terms of our income tax law, engaged in a business. Quite obviously that business centres around him as he is the only one entitled by law to practise it. Those who assist him are nevertheless very much part of that business as one cannot imagine a general medical practitioner being able to cope with his work on a continuing basis without a secretary. The existence of a waiting room where patients come and go and wait in groups, with a telephone to be answered, is, in my opinion, reason enough to support such a statement.
66. In setting out the facts I have referred to the duties carried out by the wife and Miss P. From the evidence and the manner in which it was given it was indicated to me that in this case the wife had, throughout her married life, devoted herself to her husband's practice. It demonstrated to me how essential it was in cases of this nature, for the wife to attend and give evidence under oath and be cross-examined on that evidence. It need not follow that the wife of a general practitioner, ipso facto, is assumed to devote herself to her husband's practice. Without her presence as a witness it could have been a difficult task to rebut the inference that she may not have helped as much as other may have claimed.
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67. I would, on the facts, distinguish this case from
Stewart
v.
F.C. of T.
73 ATC 4007
, a case which dealt with sec. 65, a section not an issue in this case. In that case
Menzies
J. upheld the Commissioner's action in reducing the salary of $40 per week paid to the wives of the three doctors to a deduction of $20 per week for each wife. In his judgment he said (at p. 4009):
``The matter can be looked at in another way. The wives were living normal lives in their homes subject only to their being at home during certain hours - mainly at night - to answer the telephone, etc. It was, I think, open to the Commissioner to form the opinion that the $40 per week was too much to allow as a deduction for services that had a character all of their own.''
68. In my opinion the importance and relevance of the learned judge's comments in that case were to emphasize that doctors who sought deductions for payments to or in respect of wives had the onus of proof under sec. 190(b) to rebut the inference contained in that part of the judgment quoted above.
69. In these references the wife meant more to the practice than a form of out-of-normal-hours telephone answering service. Whilst that was part of her duties, she, in addition, was involved in the practice on a regular basis commencing each morning at about 7.30 a.m. and going on to 9 a.m. Between 1 p.m. and 2 p.m. she took over from the secretary and between 5 p.m. and 8 p.m. she was involved in evening surgery and the final clean up. It was only at this point that out of normal hours telephone duty began. In addition she performed all these tasks plus the 9 to 5 duties of Miss P whenever the latter was sick or away. On Thursday and Saturday mornings she attended to all emergency calls.
70. After considering the evidence I have formed the opinion that the contribution of the wife to the practice was in the nature of real work performed day after day over a number of years and not some token gesture performed at home by someone who was normally there in any case. Her salary closely matched that of the full-time secretary and the quantum of that salary has been accepted by the Commissioner. The taxpayer in evidence said ``She works very difficult hours, broken hours, hours which, when she is not working, prevent her from leading what you might call a normal life.''
71. At the time the fund was set up the wife was 52 years of age and was eligible, under the deed, to retire at 60. I would therefore hold that special circumstances existed to justify the allowance of a greater deduction under sec. 82AAE(b) than the amount ascertained in accordance with sec. 82AAE(a). I do not consider it relevant to say that at 60 she will probably continue her work in the practice. That may or may not be so; in any case the fund, as approved by the Commissioner, allows her to do just that. Further the Commissioner has the power under the Act to review the deduction claimed in any year. What may be special circumstances in the relevant years may not even exist in some future year.
72. The wife is and was at the relevant time an employee associated with the taxpayer and so the amount paid to the fund on her behalf falls within the terms of sec. 82AAD. Before dealing with the quantum of the payment in the light of this section I will first deal with Miss P. At the time the fund was created she had reached the stipulated retiring age. No evidence was put before us to indicate that her exclusion from the fund was the result of a specific decision. The fact was she did not become a member of the fund. In the words of the taxpayer ``... Miss P had not been with me nearly as long as (my wife); as I say she was already over 60 and had reached normal retiring age for a woman. I could not see any point in offering her an inducement when I knew that circumstances might force her at any time to leave''. I accept the taxpayer's reasons for not inviting her to be a member of the fund. No two people necessarily reach the same decision. Some other employer might well have invited her to be a member for the balance of her service. The fact that the taxpayer, in this instance, did not do so for reasons of his own, does little to influence my decision.
73. After considering the taxpayer's income from the practice and the salary to his wife together with the contribution to the fund (para. 46) I have come to the conclusion that the amounts paid to the fund would not have been so paid if the employee had not
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been associated with the taxpayer. In fact the taxpayer in evidence said on the subject of remuneration ``I have always taken the view that the wages, the salary, is laid down by the award and I have as far as possible, followed that. I think that they are perhaps worth it but I cannot afford to pay them any more, so I have stuck to the award''.74. If the Commissioner had found in this reference that special circumstances existed and had accordingly determined a greater deduction than allowed under sec. 82AAE(a), but still less than the amounts actually paid, I would be hesitant to amend his figure in the absence of strong evidence from the taxpayer.
75. In this instance the Commissioner made no such determination and in my opinion the taxpayer has met the onus of proving that there were special circumstances in terms of sec. 82AAE(b). I would hold that because of sec. 82AAD the contributions made by the taxpayer to the fund in the relevant years were excessive but that sec. 82AAE(b) applied. I would allow the contributions to the fund to the extent of 25% of the salary paid in each year. This would have the effect of allowing the taxpayer deductions for the years ended 30 June 1972, 1973 and 1974 of $811, $854 and $969 respectively.
76. I would hold that the amended assessments for those years be amended accordingly.
Claims allowed
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