Case P11

Judges:
KP Brady Ch
LC Voumard M
JE Stewart M

Court:
No. 2 Board of Review

Judgment date: 11 February 1982.

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K.P. Brady (Chairman); L.C. Voumard and J.E. Stewart (Members)

The question raised in this reference is whether the taxpayer is entitled to a deduction in respect of overseas travelling expenses. These expenses were incurred on a trip undertaken in company with her husband, their child and her (the taxpayer's) parents-in-law. The taxpayer, a high school teacher, obtained leave from her employment without pay to enable her to make the trip. Both she and her husband incurred expenses in making it, and each claimed to deduct part of them in their returns of income for the year ended 30th June, 1979. In the taxpayer's case, these came to one-half of the total ($2,000 out of $3,999). The claims were disallowed by the Commissioner, as were the objections that followed, whereupon each matter was referred to a Board of Review. At the request of both taxpayers, we heard both references together, although we treat separately the facts of and decision in each.

2. The two taxpayers presented their own cases substantially as one.

3. The family group left Australia on 16th May, 1978. They flew to the U.S.A. and Canada, then travelled overland to New York, and from New York went on to Italy and France. In Italy they stayed in the town where the taxpayer's husband had been born, and where his parents had lived before migrating to Australia, for about six weeks; then they spent a period touring rural Italy and France by car. They returned to Australia on 4th August, 1978.

4. Although she is now a contract teacher, the taxpayer was at all times material to this reference a high school teacher employed by the State Education Department. Her special field was agricultural science, in which discipline she held a bachelor's degree. Her claim was set out in her return of income thus:

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ATC 55

``Travelling expenses schedule

                                                                    $
      Air fare (one adult fare)                                   1,400
      Bus fares - America (one adult)                                35
      Bus fares - Canada (one adult)                                 55
      Tour of Italy and France (for party of 4 adults
      and one child $3,000) one adult estimated                     667
      Driver for transport in Italy $2,056 -
      estimated one adult                                           457
      Fuel                                                          500
      Films in Italy                                                500
      Accommodation - Italy ($280 per double room)                  140
      Meals $20 per day for 2 weeks                                 140
      Accommodation - France (meals inclusive $210)                 105
                                                                 ------
                                                                 $3,999
      Less 1/2 private content                                    1,999
                                                                 ------
      Total claim                                                $2,000
                                                                 ------''
        

5. Some problems might arise as to the precise nature of some of this expenditure, but because we have reached the conclusion that the claim fails on other grounds we do not need to pursue this, beyond saying that according to the taxpayer the amounts claimed in many instances were estimates made by her tax agent.

6. It was sought to support this claim on two bases. First, while in the U.S.A. the taxpayer called on an academic whose interests lay in the agricultural field, at the D University. The taxpayer had been introduced to him by a relative who had worked at an agricultural college in Australia. The meeting was very brief and involved little more than a short discussion about the work being done by the academic. Secondly, and perhaps more importantly, the taxpayer did note some aspects of the agricultural areas of Italy and France, and took some movie film of them. She was able, she said, to use some of the information she gained and some of the film she shot in her classroom teaching upon her return to Australia.

7. In order to succeed the taxpayer's claim has to be brought under sec. 51(1) of the Income Tax Assessment Act 1936; that is, as the section has been judicially interpreted, the outgoings must be incurred in or in the course of the production of the taxpayer's income, or, expressed in another way, they should have been incurred in the course of the performance of the taxpayer's duties as a school teacher, or they must have the necessary consequence of an increase in salary. Examples of the judicial view may be found in
Ronpibon Tin N.L. v. F.C. of T. (1949) 78 C.L.R. 47;
F.C. of T. v. White 75 ATC 4018, and
F.C. of T. v. Smith 78 ATC 4157. The trip overseas was not undertaken because the taxpayer's contract with the Education Department expressly or impliedly bound her to, nor did the question of promotion and therefore an increase in salary arise as a real possibility. In other words, neither of the two criteria mentioned above was satisfied.

8. The taxpayer has not brought any aspect of her claim within sec. 51(1) of the Act. It follows, therefore, that the Commissioner's decision on her objection must be upheld and the assessment before us confirmed.

Claim disallowed