Guinea Airways Ltd v Federal Commissioner of Taxation

(1950) 83 CLR 584 (Dixon J - 22 December 1949 - (decision appealed))
[1950] HCA 60 (Dixon J - 22 December 1949 - (decision appealed))
(1950) 83 CLR 584 at 588 (Full Court - 13 November 1950)
[1950] ALR 913 (Full Court - 13 November 1950)

---

(Decision by: McTiernan J)

Between: Guinea Airways Ltd
And: Federal Commissioner of Taxation

Court:

Judges: Dixon J (decision appealed)
Latham CJ

McTiernan JWebb J
Fullagar J
Kitto J

Hearing date:
Judgment date: 22 December 1949 (Dixon J); 13 November 1950 (Full Court)

---

Decision by:
McTiernan J

I agree that the appeal should be dismissed.

The case depends upon the question whether the facts establish that the stock of spares and stores which were destroyed was, on the one hand, an adjunct to the appellant's profit-earning equipment, or, on the other hand, that the maintenance of the store was incidental to its operation. The facts lead, in my opinion, to the former conclusion. The result is that the loss was of a capital nature and the money expended in purchasing the spares and stores which were destroyed is not a loss or outgoing which s. 51 allows as a deduction.

The submission based upon ss. 54 and 59 fails because the facts do not warrant the conclusion that any of the spares or stores were installed ready for use.