Case U71

Members:
PM Roach SM

Tribunal:
Administrative Appeals Tribunal

Decision date: 18 March 1987.

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P.M. Roach (Senior Member)

In this reference the applicant, like the applicant in a decision of this Tribunal dated 16 February 1987 No. 3216 [reported as Case U46,
87 ATC 324], was an officer in the service of the Commissioner. During the year of income ended 30 June 1980, with the assistance of the Commissioner, he engaged in university studies. He qualified for the degree of Bachelor of Commerce at his university at the end of the 1980 academic year. In his return of income he claimed a deduction for "self-education expenses" amounting to $1,591 and, on the same basis, a concessional expenditure rebate for $250: a total of $1,841. The total was made up:

      stationery and photocopying               $25
      text books                               $127
      motor vehicle travelling expenses      $1,689
                                             ------
                                             $1,841
                                             ------
        

Motor vehicle expenses were claimed at the rate of 21c per kilometre. The rate of claim was not in issue before me. The mileage claimed was detailed in the return as follows:

"Travelling Expenses

      (A)(i)  Home - University - Home
              * Lectures                 28 trips
              * Attending exams           4 trips
              * Attending library        21 trips
                                         --------
                                         53 @ 84 km per trip            4,452

      (B)(i)  Work - University
              * Lectures                 42 trips
              * Library and enrolling     4 trips
                                         --------
                                         46 trips @ 34.5 km per trip    1,587

      (B)(ii) University - Home
              * Lectures                 42 trips
              * Library and enrolling     4 trips
                                         --------
                                         46 trips @ 42 km per trip      1,932
                                                                        -----

      (C)(i)  University - Work
              * Exams                     2 trips @ 34.5 km per trip       69
                                                                       ------
                                                                        8,040
                                                                       ------
                                                   @ 21c per km =      $1,689"
            

2. In assessing the return the Commissioner disallowed travelling expenses amounting to $405, that being the claim which related to travel only from university to home - ((B)(ii)). Although the Commissioner allowed all other travelling expenses in making his

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ATC 445

assessment, it does not automatically or necessarily follow that they were correctly allowed.

3. The applicant objected to the disallowance and by his objection claimed a deduction "for meals purchased whilst in attendance at the place of education" at the rate of $2 per day for 97 days ($194).

4. At the hearing it was agreed that the Commissioner's office at which the applicant was employed lay between the home of the applicant and his university; that the distance between his home and the Commissioner's office was approximately 12 km; and that the distance between the Commissioner's office and the university was approximately another 30 km (I note that the return claimed the latter distance to be 34.5 km. As the amounts claimed are not in dispute I overlook that discrepancy.)

5. The travelling detailed by the applicant can be distinguished in 3 categories:

• (a) journeys from home to university and return ((A) - $935);
• (b) journeys between the workplace and university ((B)(i) - $333 and (C)(i) - $15); and
• (c) journeys between university and home following attendance at the workplace ((B)(ii) - $405).

Only the cost of the latter journeys is in dispute. Those journeys represent the final leg of a travel circuit commencing at home. That circuit involved travel from home to the workplace and, at the conclusion of the day's work at the workplace, from there to the university; with the applicant then returning home from the university after attending there as a student.

6. In presenting his case, despite the circumstance that the applicant is an assessor in the Australian Taxation Office, he did not cite any decided case in support of his claim. He referred only to the decision of the Supreme Court of New South Wales in
F.C. of T. v. Smith 78 ATC 4157 in support of what was not in dispute, namely, that his education expenses were allowable to the extent permitted by sec. 51 of the Income Tax Assessment Act. Rather, he put his case by contending that if any expenses incurred in and about his university studies were allowable, then all of them were allowable. I reject that. In each case all of the sec. 51 tests have to be applied.

7. The most striking fact which distinguishes the circumstances of this applicant from those of the other applicant referred to in opening, is that for this applicant distances were far greater between all of the sites in question. In consequence the amount in dispute is significantly greater. That circumstance may also contribute to the claim for meal expenses. However, none of those circumstances gives rise to any distinction in principle. That being so, I adopt my reasons for decision (No. 3216 - ante) as expressing the principles to be applied. (I do not repeat the relevant passages in these reasons as I provided a copy of that decision for the information of the applicant and the Commissioner's representative at the hearing.) For the reasons so stated I am quite satisfied that the cost of the journeys in issue is not deductible pursuant to sec. 51 of the Income Tax Assessment Act.

8. As to the question of "meal expenses" I am not persuaded that anything is allowable. Even assuming that there was a substantial need to nourish the body in order to promote the development of the mind, I am not persuaded that the cost of partaking of food and drink, including on occasion consuming such items as hamburgers and soft drinks, is to be characterised either directly or indirectly as an expense of education. Such expenses serve an even more basic need than education.

9. One further question remains for consideration. The applicant contends that even if the only expenses incurred in undertaking a "prescribed course of education" were travelling expenses occasioned by the need to travel between place of home and university, they would be allowable under sec. 159U. That being so, he contends that expenses not allowable pursuant to sec. 51 should be first brought to account under sec. 159U; that as to the balance of $250, expenses which would have been allowable under sec. 51 but for sec. 159U should be allowed - by way of rebate only - under sec. 159U; and that the remaining expenses allowable under sec. 51, if not allowed under sec. 159U, should then be allowed pursuant to sec. 51.

10. For that argument to succeed it would be necessary for the applicant to persuade me that not only were the expenses in dispute ((B)(ii)

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ATC 446

- $405) to be so allowed for rebate purposes under sec. 159U, but also that the costs of the return journeys between home and university only ((A) - $935) were not in the same category. I am not so persuaded. If those latter costs are to be allowable pursuant to sec. 51 of the Act, they must be more than "self-education expenses" - they must be expenses "incurred in (the course of) gaining or producing assessable income" and not expenses of a "private or domestic nature". If it is claimed that they should be so characterised, then I am not persuaded that they should be considered differently to the costs of ordinary travel between home and a second place of income-earning activity (cf.
Lunney v. F.C. of T.; Hayley v. F.C. of T. (1957-1958) 100 C.L.R. 478).

11. I would uphold the determination of the Commissioner upon the objection.