Case V148
Members:PM Roach SM
Tribunal:
Administrative Appeals Tribunal
P.M. Roach (Senior Member)
The principal participants in these proceedings reflect the multicultural nature of Australian society. In addition to the Commissioner's representative, who was in all probability Australian-born, the others were an Asian, an Indian and a European, each of whom had migrated to this country. One of them was a man who used the labour of others: I shall refer to him as ``the boss''. Another (``the welder'') was a tradesman whose services were used by the boss. He was the applicant in these proceedings. The third was the person who represented the welder. I shall refer to him as ``the advocate''. The advocate had assumed responsibility for representing the welder in this litigation. Unfortunately, he was by no means well-equipped to do so. It may be that he and others will benefit in relation to future matters by considering some aspects of these reasons for decision.
2. One result was that there was a prolonged, confused and needlessly lengthy hearing. Delay was occasioned when the advocate and his witnesses were not present at the appointed time. That was dangerous, for the applications might have been dismissed. Fortunately, with the assistance of the Commissioner's representative, I am satisfied that all that has been available for consideration has been presented, considered and assessed. That being so, I am satisfied that the findings to be expressed hereafter are the appropriate findings of fact to be made.
3. The welder came to this country with his wife in the mid-1970s. They now have three children, the eldest of whom has just entered teenage. In accordance with the best traditions of all societies, the applicant has extended himself in providing for his family in the hope that, as a result of his efforts and those of his wife, their children will come to enjoy a better life than has been available to the parents. Within a short time of his arrival he had secured work and, apart from brief periods between jobs, he has never been out of work. He has never claimed on community resources to provide for the support of the family. What is more, as a result of his efforts and the tax circumstances to be mentioned hereafter, he and his wife have prospered to the extent that they now own a second residential property let to income-producing purposes.
4. In early 1980 he was working with the ``first employer'' at his trade as a welder in regular employment in Sydney. He was then earning approximately $250 per week. The family were residing in the suburbs in a home being purchased by the couple. The home was mortgaged. His third child was but a few months old. They had a small car. He then changed jobs with a view to improving his financial position, but that particular employment with the ``second employer'' was brief. He then took steps which were to lead to all his present difficulties. He took up a position as a tradesman in the service of a company controlled by the boss. The boss in
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fact controlled several companies which were responsible for works on which the welder was engaged from time to time. Separate financial records were maintained for each of them, but nothing in these proceedings turns on the identity of those companies. In consequence, I shall relate all relevant matters as if all contractual relationships were simply with the boss.5. The boss had the task of getting tradesmen to work on construction projects at sites well removed from Sydney. Competent tradesmen were difficult to recruit, particularly to remote sites, and in many instances the tradesmen whom he could recruit were concerned not to expose themselves fully to the operation of the PAYE system and, in some cases, to the system of taxation at all. In consequence, it was commonplace for men to prefer not to be engaged as ``employees'' from whose wages tax would be deducted. Many preferred to be ``sub-contractors''. I am satisfied that, as a matter of fact - I make no comment as to whether or not such arrangements were lawful - the boss did not deduct tax from the remuneration of ``sub-contractors''. I am also satisfied that, as a general rule, workers working as ``sub-contractors'' tended to have higher earnings than those persons who were ``employed'' on a master-servant basis at predetermined hourly rates. In time, those higher earnings were to come to the applicant, but not without cost in personal and financial terms.
6. From the commencement of his work with the boss the welder had to travel approximately 150 km each Monday morning into the country to work there for the week. Commonly he worked a six-day week. Commonly he worked additional hours. While in the country he resided in camp accommodation (including full board) provided by the boss. He travelled home at least at weekends and sometimes mid-week, particularly when there was any special domestic need that he should do so. His unchallenged claim was that initially he travelled as frequently as three times per week and his unchallenged evidence was that in that initial period 94% of the use of the vehicle was for that purpose only. In his return of income in each of the years in question the welder provided details of mileage and, in greater or less degree, particulars of running costs, but the advocate failed to take the initiative in presenting evidence to establish the quantum of usage or of expenses claimed by the applicant in any of the years. Similarly, the advocate failed to present clearly any evidence to support any claim to deductions based upon any other expenses incurred by reason of working in the country, even though, on the face of the claims as presented in the documents, such claims were substantial.
7. One way or another, with the exception of two periods, the welder was engaged continuously in the service of the boss from 15 February 1980 to 30 June 1983: the last day of the period under review. The first exception was a period when he ceased working in the country and worked for a Sydney employer (``the third employer''). That was in the period c. 27 April 1981 to 30 June 1981. However, in the period of his association with the boss, the association was not always acknowledged as being that of an employee. In several periods, according to his own income tax returns, he was ``self-employed'' during periods in which he was working on projects at the direction of the boss. Further, according to his own return, throughout the entire year of income ended 30 June 1983 he was employed by a company which he had formed in February 1982 (``WELD-CO''). That constituted the second exception. It was claimed that throughout the year of income ended 30 June 1983 WELD-CO contracted with the boss for the provision of welding services and that the welder was employed by WELD-CO to do the works which WELD-CO was committed to carry out pursuant to its contract with the boss.
8. I find that the sequence of relationships was as follows:
Engaged by/as From * To *
First employer 1 July 1979 31 January 1980
Second employer 23 January 1980 20 February 1980
Employed by boss or self-
employed with boss ** 15 February 1980 30 June
*DATES GENERALLY REFER TO DATES OF PAYMENT OR DATES OF THE CLOSE OF PAY PERIODS.
**WITH THE EXCEPTION OF THIS ITEM ALL CHARACTERISATIONS ARE BASED UPON REPRESENTATIONS MADE BY THE APPLICANT IN HIS OWN INCOME TAX RETURNS.
9. IN TIME AN OFFICER OF THE COMMISSIONER CONDUCTED AN INVESTIGATION INTO THE AFFAIRS OF THE BOSS. AS A RESULT, HE DISCOVERED THAT THE RECORDS OF THE BOSS INDICATED THAT SUBSTANTIAL SUMS HAD BEEN PAID TO THE WELDER AND TO MANY OTHERS IN RESPECT OF WHICH NO TAX INSTALMENT DEDUCTIONS HAD BEEN MADE. FURTHER, FROM THE SAME RECORDS, IT APPEARED THAT SOME OF THE PAYEES HAD NOT RETURNED ALL THE MONEYS PAID TO THEM AS ASSESSABLE INCOME. IN ALL, HE CAUSED OVER 300 AMENDED ASSESSMENTS TO ISSUE. I MENTION THAT MATTER ONLY IN ORDER TO INDICATE THE SOCIAL CLIMATE IN WHICH THIS APPLICANT - A NEWCOMER TO AUSTRALIAN SOCIETY AND CULTURE - WAS LIVING AND GAINING HIS SOCIAL AND CULTURAL EXPERIENCE. NOT ALL FEATURES OF AUSTRALIAN SOCIETY ARE COMMENDABLE. AFTER ALL, MIGRANTS MAY BE CORRUPTED BY THIS COMMUNITY JUST AS SURELY AS THEY CAN ENRICH IT.
10. WORKING TO AN ASSUMPTION THAT THE RECORDS OF THE BOSS WERE IN ALL RELEVANT RESPECTS ACCURATE, BUT CONSCIOUS THAT THEY MIGHT NOT HAVE BEEN SO, THE INVESTIGATOR CAUSED AMENDED ASSESSMENTS TO ISSUE AGAINST THE APPLICANT IN RELATION TO THE YEARS OF INCOME ENDED 30 JUNE 1980 TO 1982 INCLUSIVE. THEY INCREASED THE PREVIOUS LEVELS OF TAXABLE INCOME BY AMOUNTS OF ADDITIONAL ASSESSABLE INCOME WHICH, ACCORDING TO THE RECORDS OF THE BOSS, HAD NOT BEEN BROUGHT TO ACCOUNT BY THE APPLICANT; AND BY DISALLOWING SOME DEDUCTIONS PREVIOUSLY ALLOWED. (I SHALL DEFER CONSIDERATION OF THE LATTER ITEMS UNTIL LATER.) IN RELATION TO THE YEAR OF INCOME ENDED 30 JUNE 1983 AN ORIGINAL ASSESSMENT ISSUED AGAINST THE APPLICANT IN WHICH THERE WAS ATTRIBUTED TO HIM AS ASSESSABLE INCOME DERIVED BY HIM ALL THE MONEYS WHICH HAD BEEN PAID BY THE BOSS TO WELD-CO: MONEYS WHICH HAD BEEN WHOLLY RETURNED BY IT AS ASSESSABLE INCOME IN ITS RETURN OF INCOME.
WELD-CO
11. IN THE OBJECTION OF JANUARY 1985 IT WAS SAID THAT:
``THE COMPANY WAS REGISTERED FOR THE PURPOSE OF PROVIDING SKILLED WELDING SERVICES TO INDUSTRY. THE COMPANY BEING A SEPARATE ENTITY AT LAW, THE INCOME AND OUTGOINGS OF THE COMPANY ARE NOT THOSE OF MYSELF PERSONALLY. THE FULL AND TRUE DISCLOSURE OF ALL THE MATERIAL FACTS NECESSARY FOR MY ASSESSMENT WAS MADE. AS SUCH, ASSESSMENT FOR THE GROSS INCOME OF THE COMPANY SHOULD NOT BE MADE AGAINST ME PERSONALLY. THE CIRCUMSTANCES, IN WHICH THE SEPARATE LEGAL ENTITY OF (WELD-CO) HAS BEEN IGNORED. MAY PLEASE BE INTIMATED [SIC].''
IT MAY BE THAT THAT GROUND OF OBJECTION WAS SOUNDLY FOUNDED BUT, AT THE COMMENCEMENT OF THE HEARING, ANY SUGGESTION THAT THE INCOME ATTRIBUTED TO THE COMPANY HAD NOT BEEN DERIVED FOR INCOME TAX PURPOSES BY THE APPLICANT WAS ABANDONED.
12. THE APPLICANT DID NOT PROTEST THE COMMISSIONER'S ASSERTION OF A RIGHT TO DIRECT WELDER AS TO HOW HE SHOULD ARRANGE HIS PERSONAL AFFAIRS, OR CHALLENGE THE ASSERTION THAT A DECISION ON THE PART OF WELDER TO BE EMPLOYED BY A COMPANY OF WHICH HE HAD SUBSTANTIAL CONTROL, SHOULD BE RENDERED INEFFECTIVE FOR TAXATION PURPOSES. NO EVIDENCE WAS DIRECTED TO ANY SUCH ISSUE. THAT BEING SO, THERE IS NO ISSUE BEFORE ME IN THAT REGARD TO BE CONSIDERED. FOR THAT REASON I SHALL REFER TO THE ``OMITTED INCOME'' ISSUE AS IF THE ASSESSABLE INCOME DERIVED BY WELD-CO IN THAT YEAR HAD BEEN DERIVED ONLY BY WELDER. DESPITE DOING SO, I ACKNOWLEDGE AND ACCEPT THE ASSERTION THAT THE FORMATION AND USE OF THE COMPANY WAS IN NO WAY DISHONEST OR IMPROPER.
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13. IN SO FAR AS THE OMITTED INCOME ISSUE IS CONCERNED, EXAMINATION OF THE RETURNS OF INCOME AND THE ADJUSTMENT SHEETS AND SUPPORTING DOCUMENTS IDENTIFIES THE DIFFERENCES AS FOLLOWS:
YEARS OF INCOME ENDED 30 JUNE
1980 1981 1982 1983
$ $ $ $
EMPLOYED BY OTHERS
FIRST EMPLOYER
1.7.79 TO 31.1.80 7,509
SECOND EMPLOYER
23.1.80 TO 20.2.80 636
THIRD EMPLOYER
27.4.81 TO 30.6.81 2,384
EMPLOYED WITH BOSS
15.2.80 TO 30.6.80 1,158
20.3.81 TO 10.4.81 1,366
29.9.81 TO 22.1.82 5,617
SELF-EMPLOYED WITH BOSS
4.7.82 TO 19.3.81 3,794
15.7.81 to 29.9.81 6,071
3.2.82 to 19.7.82 15,935
Other allowances 500
Employed by WELD-CO 11,769
------- ------- ------- -------
Assessable income
acknowledged 9,804 [sic] 7,544 27,623 11,769
Alleged omissions
26.3.80 to 25.6.80 5,654
1.7.80 to 31.3.81 10,362
10.7.81 to 30.6.82 3,172
1.7.82 to 30.6.83 19,601
------- ------- ------- -------
Total $15,458 $17,906 $30,795 $30,970
These figures do not represent taxable income assessed as no allowance has been made for deductions.
14. I find that the omissions alleged by the Commissioner are all to be identified with periods when:
- (a) according to the records of both the boss and of welder (as they appear in his income tax returns) the applicant was not on the wages payroll of the boss; the applicant was not employed elsewhere; and the applicant was ``self-employed'' (The first period of ``self-employment'' is an exception in that it was not acknowledged in the income tax return of the applicant to 30 June 1980.); and
- (b) according to the testimony of the applicant, he had no other source of income than from the work done for the boss or through the company (WELD-CO) contracting with the boss.
15. It is by no means true that neat, orderly, precise and detailed financial records, such as those inspected by the investigator and produced in evidence before me are always true [cf. Case V38,
88 ATC 325 and Case V130,
88 ATC 827]. It was quite possible that sums attributed to the welder in the books of the boss were never paid to the welder. The cheques in
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question could have been drawn and cashed for his own use by the boss, although why he should have needed to do so using the name of welder rather than the name of some fictitious person was not explained. But neither is it true that neat, orderly, precise and detailed financial records are inaccurate simply because a witness, speaking in self-interest, either explicitly asserts them to be in error, or implicitly does so by generalisations advanced through propositions which, if accurate, would indicate that the accounting records must be in error.16. The basic difficulty which the advocate should have faced was to analyse the evidence available to him through the documents and instructions of his own client in order to determine to what extent, if any, there was any inconsistency, or possible inconsistency, between the records of the boss and the advocate's belief in the ``innocence'' of the welder and his wife. It seems that the advocate believed in the honesty of the welder and his wife and, as a result, concluded that they could not be in error. The one does not follow from the other.
17. Having heard the evidence of both the applicant and his wife, I am satisfied that:
- (a) the applicant brought in a regular flow of income from his endeavours which enabled the immediate needs of the family to be provided for at all times;
- (b) when he was ``employed'' on wages, he was always paid in cash;
- (c) when he was engaged on ``sub-contract'', he was always paid by cheque;
- (d) whether he was paid by way of cash or cheque, the moneys of the household were essentially administered by the wife;
- (e) there was no prolonged period, that is no period longer than three weeks (except possibly over Christmas) in which there was no inflow of funds;
- (f) the move which brought about the first association with the boss was influenced by a desire to earn more;
- (g) that move was successful;
- (h) the first move to work as a ``sub-contractor'' was influenced by a desire to earn more;
- (i) that move was successful;
- (j) the move back to wages with the boss in each instance resulted in a reduced income, but never an income reduced to the level of earnings available in Sydney;
- (k) the move back to working in Sydney was influenced by family considerations which, at that time, were given priority over and above the advantage of increased earnings in the interests of the family;
- (l) the move back to working in Sydney resulted in substantially reduced earnings and was short-lived;
- (m) the move back to being self-employed as a ``sub-contractor'' with the boss substantially lifted earnings;
- (n) the subsequent move back to ``wages'' resulted in a drop in earnings, but still only to a level substantially in excess of what had been available in Sydney;
- (o) the introduction of WELD-CO was not influenced by the prospect of increased earnings but was rather made in response to advice from the boss, and through the accountants to the boss, that corporate status would be necessary for any contractor who wished to avoid the operation of the PAYE system;
- (p) the applicant lacked the sophistication to be aware of all the subtleties of PAYE and PPS systems but was not so lacking in understanding as to not appreciate the immediate advantages of not having any portion of his earnings withheld on account of tax;
- (q) the pattern of the ``omissions'' measured on a time scale fits with the applicant's own record of employment outside the organisation of the boss and also fits with his own record of his status within that overall organisation.
18. The advocate failed to direct his attention to a clear presentation of answers to the Commissioner's contentions. Even a consideration of the chronology set forth in para. 8 of these reasons should have drawn his attention to some of the problems to be faced.
19. However, the problem goes beyond that. On closer examination what one finds is that, in relation to the year of income ended 30 June 1983, there is no inconsistency at all between
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the records of the boss, as examined by the investigator, and the records for that period maintained by welder. In my view that reflects the basic honesty of the welder and his wife. I also accept that it was a situation whereby the risk of clerical error was reduced by experience and by the greater degree of formality - slight though it was - that would have accompanied the presentation of claims in the name of WELD-CO and the maintenance of records for the company.20. In relation to the year of income ended 30 June 1982 it is necessary to recognise that the year passed in three stages: a period of sub-contracting with the boss; a period on wages with the boss from 29 September 1981 to 22 January 1982; and a subsequent period again sub-contracting in which, although WELD-CO was by that date already in existence, the applicant made no claim that the company was deriving the income generated by his efforts in that period.
21. In that year, by his return of income, the welder acknowledged as having drawn by wages from the boss an amount equal to what the boss recorded as having paid to the applicant in wages in the period of his employment. There is no discrepancy in that regard. In relation to the later period, every payment identified by the investigator as having been made in relation to the services of the applicant was acknowledged as having been received by the applicant in his return of income and can be shown to have been deposited to the bank account of the company which opened on 5 February. In addition the applicant, in his return of income, acknowledged a receipt of $2,152 in June 1982 which is not recorded in the analyses of the investigator. In relation to this period, there is no discrepancy detrimental to the applicant.
22. In relation to the earlier period, with the exception of amounts of $38 and $204, each amount brought to account by the Commissioner has either been acknowledged by the applicant in his return of income as having been received or can be traced to the joint bank account of husband and wife or both. Despite the evidence of both husband and wife that all such cheques were handed to the wife, and despite the evidence of the wife that each and every cheque was banked to the credit of the same joint bank account, I am not persuaded that their system was so sound or the wife's memory so reliable that there were no exceptions. On the balance of probabilities, I find that those two cheques, as much as the others already acknowledged in one way or another by the applicant, constituted moneys received by the applicant from the boss during the year of income ended 30 June 1982.
23. At this point it is appropriate to acknowledge that the Commissioner's representative had gone to the lengths of having photocopies of cheques prepared as double-sided copies intended to represent both sides of particular cheques. The Commissioner's representative acknowledged that photocopying in that way could result in a situation in which what was presented by a single sheet as a photocopy sheet showing both sides of a single cheque might in fact contain a representation of the face sheet of one cheque and the back of another. Further, he acknowledged that that might be so despite the certificate of accuracy endorsed on the photocopies by the clerk who had prepared them. He indicated that he was in a position to call on the clerk but did not do so. Having regard to the overwhelming evidence from the applicant's own records establishing receipt of all but two of the cheques - indeed two of the three smallest cheques - that omission does not persuade me to doubt the conclusion I have reached.
24. One purpose in producing those photocopies was to establish that a number of the cheques had been endorsed by the applicant: something consistent with those cheques having been cashed without presentation to the credit of a bank account despite the endorsements within the crossing on the face of the cheque: ``not negotiable account payee only''. In the circumstances, that proved to be a matter of no moment because, in one way or another, the cheques which bore the endorsements which appeared to be the signatures of the applicant, had either been acknowledged in his return of income or were clearly credited to the joint bank account. However, the advocate caused another difficulty. In presenting the evidence in chief, when the welder was asked to comment on the endorsed signatures, in all but one instance he acknowledged the signatures to be his: denying it in the other instance. So the matter stood at the close of the cross-examination of the applicant. But the advocate insisted on raising
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the question again in re-examination. There being no objection, and despite warnings of the hazards involved, the advocate proceeded. Consideration of a transcript would show that one signature previously admitted was now denied and the signature previously denied was now admitted. I mention the matter for three reasons. Firstly, to illustrate that basic practices in advocacy tend to be soundly based. When the evidence is favourable to your cause, leave it alone. Secondly, I mention it in order to record that I do not regard the answers as being indicative of any dishonesty on the part of the applicant. When proceedings were as confused for the experienced as they were, it was not surprising that the inexperienced were also confused. Thirdly, I mention the matter because, interesting though the question might have been as to who had placed on the cheque the false representation of the signature of the applicant, the answer to that question did not alter the circumstance that the moneys were, according to his own acknowledgement, received to the credit of the welder.25. I next turn to consider the figures in relation to the 1981 year of income. I observe that there was no dispute as to either the periods in which the applicant was employed with the boss or with the third employer; or as to the amounts earned as assessable income from those employments. The difference between the Commissioner and the applicant lay in the circumstance that, according to the Commissioner, the total amount derived under sub-contracts amounted to $15,522 received in 29 payments effected at frequent intervals throughout the period, but only $3,794 had been acknowledged as having been derived. In this instance, the applicant produced no savings bank records relating to any period prior to February 1981. Such savings bank records as were produced for the later period showed that three cheques totalling $3,047 were received and credited to the bank account. There was no trace of two others for a total of $868. In all the circumstances, I am not persuaded by the applicant that the Commissioner has overstated the alleged omissions.
26. In relation to the year of income ended 30 June 1980 the only assessable income acknowledged by the applicant in his return of income as having been derived from the boss was $1,158 identified in a Group Certificate as having been received in respect of a period of 15 February 1980 to 30 June 1980. According to the records of the boss, that sum represented three weekly pays from the commencement of the association between the welder and the boss: $333.66; $395.24; $466.21 on 29 February, 7 March, and 14 March 1980 respectively. I accept the evidence of the boss that those amounts were paid on those dates. I find that, as has been indicated earlier in these reasons, the payments reflected the success of the move to associate with the boss. By undertaking work in the country, by working overtime and by working up to six days a week, the applicant was able to substantially increase his earning rate to a rate well above the rate of the order of $250 per week which he had known in Sydney.
27. I next observe that I am satisfied that, in the remaining months of that financial year, the welder continued to receive moneys for his services which enabled a regular inflow of moneys into his household. Further, quite independently of the accounting records of the boss, I am well satisfied that, after working in Sydney for something of the order of $250 per week, the applicant did not work for some 19 weeks in the country for some $60 per week: the rate of earning which would have been appropriate had he only earned $1,158 between 15 February 1980 and 30 June. In all the circumstances, I am satisfied that in fact the applicant did receive as a ``sub-contractor'' the moneys recorded against his name in the financial records of the boss and attributed to him as assessable income by the Commissioner. In reaching that conclusion, I observe that, as was to be expected, the average rate of earnings as a ``sub-contractor'' in this period was somewhat better than the average rate of earnings in the three weeks in which he was on payroll.
28. Having reached those conclusions, I think it appropriate that I should add a word about honesty. The applicant was not a man of letters; not of clerical background; his first language was not English; and even now his capacity with the English language is quite limited - more limited than that of his wife. However, I am well satisfied that he was quite capable of understanding that his earning rate for the year of income ended 30 June 1980 and, particularly during the period of his association with boss, was far greater than had been represented in his return of income. On the
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other hand, I do not condemn him as dishonest. He was a stranger in a foreign land and I accept that he was very substantially influenced in all of these proceedings by his peers and, in particular, by those in positions of greater status, such as the boss and the friend who helped with his tax returns in the earlier years. For my part I accept him as being honest, notwithstanding the fact that, in relation to the 1980 year, it is hard to understand how he could have thought the return to be accurate. In relation to the 1981 year the magnitude of omissions is not such that it cannot be sufficiently explained by clerical errors. Indeed there is some evidence to suggest that that is what has happened.Deductions and allowances
29. The position in this regard was quite unclear and it was only when the advocate was prompted by the Tribunal that these questions came to be addressed at all. When the disputed assessments issued, the first document objecting to their issue failed to specify precisely what was objected to or why. However, within the 60 days allowed for the purpose a further, much more detailed, letter was lodged with the Commissioner. Although it was not included with the formal documents submitted to the Tribunal, it was presented upon the hearing and it was very properly proposed on behalf of the Commissioner that the Tribunal should consider that its jurisdiction had been invoked in relation to all such matters of objection as could be spelled out from the latter letter, but that the applicant should not be permitted to seek relief going beyond the scope of that letter. From that document it appears that the issues arguably open for determination were as follows:
Year Ended 30 June 1980 1981 1982 1983
$ $ $ $
Travel and accommodation:
13 w x $75 975 *
39 w x $90 3,510 *
48 w x $100 4,800 *
48 w x $120 5,760 *
Site allowance: 36
Industrial clothing: 144 164 - 230
Sickness and
accident premium: 792 803
Superannuation: 507
Trade union subscription: 100
"Taxation fees": 250
Gifts (sec. 78): 20 20 - 30
Spouse rebate: 574
*I regard these claims as finally made as encompassing all of the claims to depreciation on motor vehicle and other motor vehicle expenses and all accommodation costs incurred by reason of country employment.
Travel and accommodation
30. The first observation to make in relation to this head of claim is one which can be made in relation to all of these heads of claim. There was no attempt at any clear presentation of evidence such as would provide the Tribunal with the opportunity to make detailed findings as to what had occurred or as to the expenses arising in consequence. Nor was there any attempt made to explain apparent anomalies: for example, why this claim was limited to 13 weeks in the 1980 year when the return spoke of, and all the other evidence pointed to, the relevant period being 19 weeks.
31. In so far as expense was incurred in travelling between home and work the law is
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quite clear. As laid down by the High Court inLunney v. F.C. of T.; Hayley v. F.C. of T. ((1957-1958) 100 C.L.R. 478) and recently applied by me in Case V111,
88 ATC 712 - a case relating to a Cambodian working under broadly similar conditions - nothing can be allowed in this regard. In reaching that conclusion, I have considered whether or not in periods in which the applicant was ``self-employed'' a different conclusion might be reached on the basis that he was pursuing an itinerant occupation. But the simple answer to that is that he was not a person earning his living by moving from place to place to do his work. He had a regular place of work. Unfortunately for him it was a substantial distance from his place of residence.
32. I reach the same conclusion in relation to the costs of his accommodation at the camp. The costs of meals and shelter were ``private''. The quality of accommodation available in the camp may have been poor by comparison with the accommodation in his own home. It probably was. But I do not know in what ways for I was not told anything in detail about the accommodation in the camp. But, in my view, if fell far short of the situation in Case U228,
87 ATC 1268 where I allowed a deduction to a timber faller in relation to costs incurred in providing for his meals and shelter while working in the bush.
33. The objection made reference to the deductibility of an allowance of $36 in the 1980 year of income said in the objection to be a ``travel allowance''. However, as to that, I merely observe that there was no evidence that it was in fact a ``travel allowance''. Further, what constitutes assessable income as an ``allowance'' does not automatically give rise to an entitlement to a deduction (cf. the Member of Parliament in Case V39,
88 ATC 335; and the migrant labourer in Case V111, 88 ATC 712). But, in any event, the claim for a corresponding deduction had been allowed.
34. In this regard, it is appropriate to make one further observation. No less a person than Sir Owen Dixon, when presiding as Chief Justice on the occasion the High Court of Australia considered decisions in Lunney and Hayley (ante), indicated that he had serious doubts about the merits of the rules of law which had been established as to the expenses of travelling to and from work. But Parliament has not responded to that prompting. That being so, it was obviously in the interests of persons such as the present applicant that they should so arrange the terms of their employment that the costs of getting to and from the job and the costs of residing in camps to enable them to do the job would be borne by the employer to whom the expenses would have been deductible, even at a cost of reduced remuneration to the employee. That was a situation which was sought to be secured upon the establishment of WELD-CO. But, as the Commissioner has ignored the company, and as his action in doing so is not under challenge, it is not appropriate to make any findings in that regard. Furthermore, that is the position which probably has been achieved in his present employment in which his employer transports him thousands of kilometres to enable him to travel to and return from his place of work and, in all probability, bears the costs of accommodating him there.
Industrial clothing and safety boots
35. To the extent to which the claims have not been allowed, they should be allowed. So much is conceded by the Commissioner. As the claims have been allowed in all years except 1980, it is only necessary that the claim standing at $144 should be allowed for that year. As the Commissioner consents to that course, I shall approve it.
Insurance and superannuation
36. The applicant claims to have outlaid $792 and $803 by way of sickness and accident premiums in the years of income ended 30 June 1982 and 1983 respectively and $507 for superannuation in the latter year. No evidence at all in the way of proposals or policies was produced. In relation to the 1982 year I note that the sum of $792, now spoken of as a premium for sickness and accident insurance, was claimed as concessional expenditure as a life insurance premium. I am not persuaded that that assertion - which was not challenged by the Commissioner or adverted to by the advocate - was incorrect. In relation to 1983 the personal return of the applicant again claimed $803 as concessional expenditure by way of life insurance premiums. I am satisfied that nothing is to be allowed in either year. Nothing was claimed as to superannuation in either of the earlier years but, per medium of the company's return, a claim was made for workers' compensation premiums amounting to
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$1,542. That claim was allowed by the Commissioner in computing the net income benefits to the applicant by reason of the company's operations in the 1983 year. In the circumstances, I am not persuaded that anything further is allowable.Trade union subscriptions
37. In the objection of January 1985 a claim was made for a $100 deduction in the 1983 year. Similar claims for lesser amounts had been made in earlier years and allowed. No evidence was placed before me, whether by way of the evidence of witnesses or of documents to indicate that this amount had been paid. It seems improbable that a union subscription would not have been paid in that financial year but it is quite possible that it is one of the expenses which was claimed by the company and allowed to the applicant in the calculation of his taxable income. I am not persuaded that anything further should be allowed.
Tax agent's fees
38. In the company's return of income for the year ended 30 June 1983, a claim was made to deduct $750 as ``accountancy and audit fees''. The company made no o|her relevant claim. Nor did the applicant make any claim in his return in relation to any item which might be thought to refer to ``tax agent fees''. The company's claim to $750 was allowed by the Commissioner and brought to account in determining the taxable income of the applicant. In the circumstances, I am not persuaded that there is any other amount which should have been brought to account.
Gifts (sec. 78)
39. Claims for deductions of $20, $20 and $30 were made in the years of income ended 30 June 1980, 1981 and 1982. No claim was made in relation to the 1983 year. Although no receipts were produced, as the Commissioner's representative did not strongly press the matter but rather conceded the appropriateness of the course proposed, I intend to allow the claims as made in relation to the first two years. The claim for 1982 has already been allowed.
Spouse rebate
40. No evidence at all was presented in relation to this complaint.
Penalties
41. The advocate did not direct any attention at all to the question of imposition of additional tax for incorrect return. Upon the question being raised by the Tribunal, the advocate indicated that he did seek relief for his client in that regard. The Commissioner's representative advised that, in this particular case, additional tax had been calculated by applying only a compensatory rate of interest to tax avoided: 10% per annum for the period of avoidance up to 13 February 1983 and 20% per annum thereafter until no later than the date of assessment. Those representations were not in any way queried and I am pleased to accept them. They indicate that, in this instance, the Commissioner so exercised his discretion as to not impose a penalty by way of a ``culpability factor''. The result is that the imposition of additional tax in this instance carries no element of punishment, but merely sought to place the taxpayer in the same position as that in which he would have stood had he been correctly assessed (as now assessed) at the time of the original assessments, but thereafter had not paid the amounts assessed on the dates due and payable. In those circumstances, in my view, it is not appropriate to further remit additional tax.
Conclusion
42. For the foregoing reasons the order of the Tribunal will be that the decisions of the Commissioner upon the objections under review for the years of income ended 30 June 1980 to 1981 shall be varied and taxable income reduced by $164 and $20 respectively and that additional tax shall be remitted accordingly. The decisions upon the other objections shall be affirmed.
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