Case C47

FE Dubout Ch

G Thompson M
N Dempsey M

No. 3 Board of Review

Judgment date: 20 August 1971.

F.E. Dubout (Chairman): The principal item of claim which is in dispute in this reference is an amount of $449 expended by the taxpayer for typing, binding and examination fees in connection with the attainment of a degree of Doctor of Philosophy. In addition, a smaller claim, being $12 outlaid for university parking charges, was rejected by the Commissioner.

2. As my colleagues have covered the material facts in their decisions, it is unnecessary for me to repeat them. I add that I am in agreement that the taxpayer must fail in respect of both items of claim, for the reasons given by my colleagues, namely, that the larger item is expenditure of a capital nature, and the smaller is expenditure of a private nature. I wish to add my own comments on only two aspects of the matter.

3. In arguing his case, the taxpayer submitted that the expenditure incurred in connection with the attainment of the doctorate was not of a capital nature because there was little demand in private enterprise for the services of persons holding that degree. This proposition he based upon an address, a copy of which was an exhibit in the reference, given by a Professor of Physics on the subject of the value of a Ph.D.. The views of the learned author of the address are doubtless wellfounded, and it may be accepted that the attainment of a Ph.D. is not a sure stepping-stone to advancement in industry. On the evidence in this case, however, it is clear that it is, within the university and in particular in this taxpayer's own field of endeavour, a mark of distinction which opens up avenues for advancement. It represents elevation to a higher academic status, and is capable of conferring enduring benefit on the holder.

4. In considering the questions arising in this case, I have not overlooked the majority decision of Board of Review No.2 in Case B.78,
70 ATC 362. With due respect to the views expressed by the members in the majority in that case, I consider that they run counter to the main stream of authority, at Board of Review level, on the subject matter with which this reference is concerned. As I understand that an appeal has been taken to the High Court from the Board's decision in Case B.78, 70 ATC 362, I decline to discuss the case any further. In my opinion, the general approach which has been taken by Boards of Review in cases of this kind is the correct one, and it was concisely expressed by my colleague Mr. Dempsey in
18 T.B.R.D. Case T.19 at p.98 when he said -

``I think it has been long established (
10 C.T.B.R. 165, Case No.55) that expenditure incurred in gaining higher degrees in a profession is of a capital nature and cannot be regarded in the same way as expenditure incurred in merely keeping abreast of changing conditions in a profession (
8 C.T.B.R. 138, Cases Nos. 48-52).''

5. As I have previously indicated, my decision is that the taxpayer's objection should be disallowed and the Commissioner's assessment confirmed.

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