Case R62

Judges: HP Stevens Ch
TJ McCarthy M

PM Roach M

Court:
No. 1 Board of Review

Judgment date: 12 July 1984.

---

P.M. Roach (Member)

The question in this reference is whether the taxpayer is entitled to -

• (a) a sec. 51 deduction for self-education expenses in the sum of $250;
• (b) depreciation in respect of a professional library in the sum of $160 in lieu of the amount of $145 allowed by the Commissioner;
• (c) a deduction pursuant to sec. 51 of the Act in relation to ``maintenance and repairs'' relating to a home study in the sum of $940; and
• (d) a similar deduction for $68 in relation to council and water rates attributable to the home study.

2. The taxpayer is a dedicated school teacher in a private school, who has overcome substantial physical disabilities in order to attain that status and to discharge the duties of his appointment. His principal responsibilities are as a librarian in charge of audio visual equipment and materials; as a class teacher; and as teacher in charge of debating within the school and the inter-school competition.

3. The taxpayer's contention was that this Board should allow the deductions in dispute because they were ``fair and reasonable''. The Board of course has no such mandate or authority. If the law of taxation was that the taxpayer should pay so much tax as the Commissioner, subject to review by the Board or appeal to the Court, thought ``fair and reasonable'', the Income Tax Assessment Act would not take up over 900 pages as it does. Further, as we are confident the taxpayer understands, the Board must reach its decision in this case as in all others, uninfluenced by either respect for his achievements or compassion for his disabilities.

4. As to the claim re expenses of self-education, the taxpayer incurred expenses in enrolling for and undertaking studies with the Barristers Admission Board of New South Wales. His expenses included -

                                  $

      Course registration          4

      Textbooks                   78

      Travelling expenses        195
          

Although the taxpayer did not continue the course to completion the declared purpose of the course as stated in his income tax return was -

``Completion of this course would enable me to become a qualified lawyer, but as well it would enable me to better teach my subjects of history and general studies, as well as enable me to teach legal studies, a subject widely taught in Victoria, and likely to be offered in New South Wales.''

In my opinion the expenses so incurred were not so connected with his employment and the derivation of assessable income as to meet the requirements of sec. 51.

5. In relation to the claim for depreciation the taxpayer claimed that the ``value'' of his library had increased during the year of income by reason of acquisitions by purchase and gift ($400) and by reason of an increment in the value of previously held texts. The Commissioner in his calculation of depreciation allowed $400 as the cost of additions but adopted an opening written down value of $1,053 in lieu of the opening value of $1,200 implicitly claimed by the taxpayer with the consequence that the Commissioner allowed only $145 as depreciation in lieu of the sum of $160 claimed by the taxpayer. The taxpayer in contending that an increment in value of previously held texts should be taken into account in calculating depreciation was in error. The basis of depreciation is ``cost'', not value [sec. 62(1)]. As there was no evidence suggesting that the Commissioner had erred in his assessment of the opening written down value of the library this ground of objection also fails.

6. ``Maintenance and repairs'' were claimed as a deduction pursuant to sec. 51 but as appeared upon the evidence the amounts claimed were in respect of -

• (a) the fitting of glazed doors in lieu of a tilt-a-door previously fitted to a garage converted by the taxpayer to a study ($877); and
• (b) provision of a rug and blinds for use in the study purchased at a cost of $63.

The nature of the work done in relation to the doors was clearly of a capital nature, and not by way of repairs and accordingly no deduction is allowable. The expenditure on the rug and blinds was also of a capital nature and not

---

ATC 457

deductible pursuant to sec. 51. No claim to depreciation was made in either the income tax return or the objection. Because of the limitations contained in sec. 190 which provides that -

``Upon every such reference or appeal -

• (a) the taxpayer shall be limited to the grounds stated in his objection; and
• (b) the burden of proving that the assessment is excessive shall lie upon the taxpayer.''

I am not able to allow any amount for depreciation of those items.

7. No evidence was given on the subject of council and water rates, although the income tax return of the taxpayer showed that the amount claimed was calculated at the proportion of the total home area occupied by the home office. Even so it is clear that on the application of the principles laid down by the High Court of Australia in
Handley v. F.C. of T. 81 ATC 4165 and
F.C. of T. v. Forsyth 81 ATC 4157 the taxpayer's claim in this regard must also be disallowed.

8. It may well be that it would be ``fair and reasonable'' that persons such as the taxpayer should be entitled to special allowances whether by way of tax concessions, subsidies or grants to encourage and support them in their endeavours to become financially independent and to make a valuable contribution to the quality of life in this community, thereby avoiding being a charge on the social services budget. Whether that be so or not is of course a matter for the Parliament and not this Taxation Board of Review.

9. I would disallow the objection and uphold the Commissioner's assessment.

Claims disallowed