JE Stewart SM
Administrative Appeals Tribunal
J.E. Stewart (Senior Member)
The question for decision is whether the applicant is entitled to a deduction of $91 in the year of income ended 30 June 1984 for moneys expended by her on the dry cleaning of items of her personal clothing made necessary by damage occasioned to them in her job.
2. At all times during the year of income in issue, the applicant was an employee of the Australian Taxation Office. In December of that year, she was appointed an inspector and was required to visit business houses involved in the "prescribed payments" system of paying income tax which came into operation some few months earlier on 1 September 1983. In undertaking her duties she told the Tribunal that she visited taxpayers such as motor vehicle repairers, plumbers, builders and engineering firms at their place of work comprising sale yards, workshops, factories and warehouses. She described the various premises in the following terms:
"... if I visited a plumber I would be working in his work area where he would be sitting in his overalls with grease and grime and it was perfectly adequate for him. Now, I had to go out to those places. Warehouses where - if I visited a liquidator or if the office was located in a warehouse they were covered in dust, they were dirty. Building sites... I was often walking on uneven ground, I often damaged my shoes. I would
ATC 451be sitting down with the builder in his lunch-room or whatever so generally I found the conditions dirty, dusty, grimy and not at all what I was used to within the Tax Office."
3. The applicant went on to tell the Tribunal that she was seldom made welcome by the taxpayers whom she visited and often she felt that the facilities offered to her where she might complete her records were sub-standard compared with what might be made available to a different category of caller. That being the case, she advised that there were times when she could wear an outer garment only once because of the soiling occasioned to it. Accordingly the need grew for her to have the garments dry cleaned. She told the Tribunal that she was conscious of the fact that she represented the Commissioner of Taxation when making her calls on taxpayers and therefore she felt that she should always be neat and tidy in her appearance and dress in a manner befitting a professional person.
4. Accordingly she considered that she had no other option but to incur the dry cleaning charges that she did, and she saw those charges as arising directly from her work as an inspector. She informed the Tribunal that her claim comprised dry cleaning charges over and above the amount that she had outlaid prior to her appointment as an inspector with the excess amounting to $3.50 per week over a period of 26 weeks, i.e. over the period January/June 1984.
5. The applicant has made her claim under the first limb of sec. 51(1), in other words she contends that the expenditure of $91 was incurred by her in gaining her assessable income and was not of a private or domestic nature. Cases well known to the applicant because of her calling would have been
Lunney v. F.C. of T.; Hayley v. F.C. of T. (1957-1958) 100 C.L.R. 478. Those cases involved the deductibility of travelling expenses in travelling between home and the place of business. The majority of the High Court held that those outlays did not meet the tests of sec. 51(1), and in any event were of a private nature. The majority stated it was not enough to show that the expenditure was an essential prerequisite to the derivation of assessable income. Thus the proposition that unless an employee were to attend at his/her place of employment, he or she would not derive assessable income, was not heeded. The decision in Lunney and Hayley denied the notion that an expense was incidental and relevant to the derivation of income merely because it was necessary. Similarly in the instant case, the incidence of damage to the applicant's clothing whilst carrying out her duties may have been unavoidable and the outlays on dry cleaning to correct that damage a consequential necessity, but it does not follow that the expenditures were incurred in gaining or producing assessable income in accordance with the way that phrase has been interpreted by the High Court. In my view, the expenditures had no effect and played no part in the earning of her income (see
Amalgamated Zinc (de Bavay's Ltd. v. F.C. of T. (1935) 54 C.L.R. 295 at p. 303) and like the fares in Lunney and Hayley were expenses personal to the applicant, and so excluded from deduction being of a private nature.
6. For the above reasons, the Tribunal affirms the Commissioner's decision upon the applicant's objection to the assessment for the year in issue.
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