Case D12

Judges:
AM Donovan Ch
GR Thompson M
RK Todd M

Court:
No. 2 Board of Review

Judgment date: 13 April 1972.

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A.M. Donovan (Chairman): Among the concessional items which the taxpayer claimed to deduct from income derived by him during the year ended 30 June 1971, was the maximum amount of $300 prescribed by sec.82J in respect of education expenses. The Commissioner admitted the claim to the extent of $52 only (comprising, inter alia, $46 fees paid for piano tuition). The balance of the claim was rejected. The disallowed amount represents part of the cost of a piano purchased by the taxpayer in July 1970 for $395.

2. The claim relates to the taxpayer's daughter, who attained the age of nine years during the year of income and who, from about October 1970, had been receiving pianoforte lessons from a private music teacher in respect of which the abovementioned fees had been paid. She practised on the piano the cost of which is in dispute. The instrument, located in the lounge room of the taxpayer's home, was not used by any other member of the family.

3. The child attended a State school, being in the fifth class of the primary division. Throughout her entire school career, she received instruction at school in a subject referred to as ``music'', to which, during the year of income, three lessons, occupying 1 ¼ hours, were devoted each week. The content of this subject was explained by oral and documentary

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evidence. I do not propose to review that evidence in detail, but merely express the conclusion that the subject was taught to the class as a whole, was largely concerned with musical theory and appreciation and involved some practical vocal work with, it seems, a lesser amount of practical work with percussion instruments. The object and content of the school course were directed to inculcating a sensitivity towards music, together with some theoretical knowledge of the subject, but it was not concerned in any sense with making the children practical musicians, at all events with a keyboard instrument.

4. To succeed in his claim, the taxpayer must demonstrate that the cost of the piano represents ``education expenses'', which in sec.82J(6) are defined to mean ``expenses necessarily incurred by the taxpayer for or in connection with full-time education at a school, college or university or from a tutor''. This definition has been considered by Boards of Review on a number of occasions but in the circumstances of this reference it is an exercise which need not be undertaken.

5. The only full-time education the taxpayer's daughter was receiving during the relevant year was at the State school. I have described the nature of the lessons in music which she received there and explained that they were not related in any way to making the child a practical pianist. On the other hand, the piano on which the child practised at home and the lessons which she received from the private music teacher were directed to that very end. On any analysis, the use of the piano in question cannot be related to the child's school work during the relevant period, and for that reason the cost of the instrument cannot be said to have been incurred ``in connection with... full-time education at a school'', if education is interpreted as meaning current education. Indeed, the taxpayer, who presented his own case before the Board and who displayed a keen appreciation of the issues involved, did not persist in any suggestion to the contrary.

6. However, what the taxpayer did submit was that the piano related to his daughter's future full-time education either in secondary school or at university. After the first year of high school is completed, music ceases to be a compulsory and becomes an elective subject though it retains its theoretical character. It is examinable by the Public Examinations Board, which conducts the leaving certificate examination for secondary school students in the State concerned. In addition to setting its own examination in that subject, however, that Board accepts a student's pass at a prescribed level in an examination set by the Australian Music Examination Board. A pass in the last mentioned examination requires, inter alia, proficiency as a practical musician. Evidence was also adduced that at university level too the study of music requires practical proficiency. The taxpayer argued that the requirements for students to be practical musicians as described establishes the necessary nexus between his daughter's later full-time studies at secondary school or at university and the cost of the piano in question.

7. The element of futurity in this argument was no bar to his claim, the taxpayer submitted, because of the decision in
13 T.B.R.D. Case N. 61. In that reference a deduction was allowed in respect of an enrolment fee paid in the year of income to secure admission of a child to college some 12 years later. The Chairman and Mr. Smith, at p.236, said: ``The money was expended as the first step in a move to ensure the full-time education of the taxpayer's infant son, albeit at a future date''. This statement embodies a conclusion which may well have been influenced by the fact that at the relevant future time the child would be required by law to undergo full-time education of a type specified in sec.82J(6).

8. The decision, however, affords no assistance in the present reference. This is so firstly because, as I apprehend the situation, there is no legal requirement that the child proceed to leaving certificate standard and there was no evidence that she was likely to complete her secondary and embark upon tertiary studies. Moreover, if she should continue to either of these stages of her education there could be no assurance that she would be engaged on practical pianoforte

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work as part of it. It is not possible to conclude, therefore, on the evidence before us, that she would use the piano in question in connection with her future full-time education if future education is comprehended by sec.82J(6).

9. I am of the opinion that the taxpayer's claim must fail for the reasons indicated above. It follows that I am also of the view that the deduction in respect of the fees paid to the private teacher for piano tuition was incorrectly allowed by the Commissioner. That, however, is not a matter which is before the Board.

10. There is one further comment. Counsel for the Commissioner strenuously argued that the word ``expenses'' in the relevant definition does not comprehend an outgoing, such as the one here considered, giving rise to an asset which substantially retains its value. He invited this Board to come to a contrary conclusion to that adopted in Case A67,
69 ATC 380 . It is not necessary for me to consider this aspect of the present case and any consideration of the submission should, I think, be reserved until the issue is squarely raised in a matter requiring decision by this Board.

11. I would uphold the Commissioner's decision on the objection and confirm the relevant assessment.