Case A71

Members: AM Donovan Ch
JD Davies M

GR Thompson M

Tribunal:
No. 2 Board of Review

Decision date: 7 November 1969.

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G. R. Thompson (Member): I agree with the decision reached by the Chairman.

2. As to the objection raised relating to the claim for a deduction in respect of $15 paid in respect of stamp duty on cheques used by the taxpayer, his case failed on the onus of proof.

3. The claim relating to the amount of $7.92, representing amounts deducted from the taxpayer's salary and allowance and paid under the Stamp Act 1921 (as amended), succeeds for the reason that it is a loss or outgoing incurred in gaining or producing the taxpayer's assessable income under sec. 51 of the Income Tax Assessment Act.

4. At first reading, the Stamp Act is seen to impose a duty on certain documents, in so far as it imposes an obligation to issue a receipt and to pay an ad valorem duty upon

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ATC 400

such receipt. When amounts which bear the character of income are received the duty, in the final analysis, is a tax on income, and where the amount received represents salary or wages it is a tax on such salaries and wages. The duty, however, becomes payable in a similar manner when amounts are received which are not of the character of income, and this lack of discrimination between capital and income, coupled with the consideration that it is computed on gross amounts, rather than upon gross amounts less allowable deductions which are a feature of income tax legislation, causes me to consider that it may not properly be described as an ``Income Tax''. It thus escapes disqualification under the principle that income tax is not expenditure which is necessary to earn income and is not, in the absence of specific statutory provision, allowable as a deduction - See
R. v. D. & W. Murray Ltd. (1909) 11 W.A.L.R. 92 ;
Gresham Life Assurance Soc. Ltd. v. Styles (1892) A.C. 309 ;
Ashton Gas Co. v. Attorney-General and Ors. (1906) A.C. 10 ;
Davies Coop & Co. v. Commonwealth (1935) 54 C.L.R. 155 ;
I.R. Commissioners v. Dowdall O'Mahoney & Co. Ltd. (1952) 1 All E.R. 531 .

5. The liability to pay stamp duty upon amounts received by him as salary and allowance was an inescapable concomitant of the process by which the taxpayer gained or produced his assessable income. He derived income when he received payment of his parliamentary salary and allowance, and he incurred liability to duty under the Stamp Act simultaneously with that receipt. The receipt of the income was the occasion of the loss or outgoing, and this satisfies the test to be found in
Ronpibon Tin N.L. v. F.C. of T. (1949) 78 C.L.R. 47 at p. 57 -

``In brief substance, to come within the initial part of the sub-section'' (sec. 51(1)) ``it is both sufficient and necessary that the occasion of the loss or outgoing should be found in whatever is productive of the assessable income or, if none be produced, would be expected to produce assessable income.''

6. I would join in the order proposed by the Chairman.

Claim allowed in part