Taxation Determination

TD 93/189W

Income tax: can the cost of plant purchased for a specific project, and fully charged to the client, but which is still held after that project was completed and able to be used again, be treated as fully deductible under subsection 51(1) or under the depreciation provisions of the Income Tax Assessment Act 1936?

FOI status:

may be releasedFOI number: I 1216211

Notice of Withdrawal

Taxation Determination TD 93/189 is withdrawn with effect from today.

1. Taxation Determination TD 93/189, which issued 30 September 1993, considers the deductibility, under subsection 51(1) and the depreciation provisions of the Income Tax Assessment Act 1936 (ITAA 1936), of the cost of a depreciating asset that a taxpayer acquires to assist them to undertake a specific client project for which they receive an assessable fee. The Taxation Determination states that the cost is dealt with under the depreciation provisions.

2. Both of these provisions were rewritten in 1997 as part of the Tax Law Improvement Project. Subsection 51(1) of the ITAA 1936 was replaced by section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) and the depreciation provisions were replaced by Division 42 of the ITAA 1997. From 1 July 2001, Division 42 was replaced by Division 40 of the ITAA 1997.

3. As TD 93/189 is no longer current, it is accordingly withdrawn, and is replaced by Taxation Determination TD 2006/33 to reflect the current provisions. There is no change to the views expressed.

Commissioner of Taxation
10 May 2006

Previously issued as Draft TD 93/D139


ATO references:
NO NOR J36/355/8ISSN 1038 - 8982

ISSN 1038 - 8982

Related Rulings/Determinations:

IT 2685

Subject References:
cost recovery

Legislative References:
Income Tax Order 1217
ITAA 51(1)
ITAA 54(1)
ITAA 55(2)
ITAA 59(1)
ITAA 59(2A)

Case References:
Sun Newspapers v FC of T
(1938) 61 CLR 337
5 ATD 87

Henty House Pty Ltd v FC of T
(1953) 88 CLR 141
10 ATD 231

Case 71
14 CTBR (NS) 404

Case T63
(1968) 18 TBRD 329

GP International Pipecoaters Pty Ltd v FC of T
90 ATC 4413
21 ATR 1

TD 93/189W history
  Date: Version: Change:
  30 September 1993 Original ruling  
You are here 10 May 2006 Withdrawn