Case R69

Judges:
KP Brady Ch
JE Stewart M
DJ Trowse M

Court:
No. 2 Board of Review

Judgment date: 20 July 1984.

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K.P. Brady (Chairman), J.E. Stewart and D.J. Trowse (Members)

The question for decision in these references is whether the taxpayer, a telephonist employed by Telecom on permanent night shift duties, is entitled to deductions in respect of travel between her residence and place of employment. The references concern the years of income ended 30 June 1979, 1980 and 1981, and relate to claims for $226, $254 and $431 respectively. With the taxpayer's consent, all references were heard together.

2. In carrying out her duties, the taxpayer worked on a permanent basis between the hours of 6 p.m. to 1.18 a.m. on five nights per week. In giving her evidence, she informed us that there was no public transport operating in the early hours of the morning whereby she could travel to her home, and so it was necessary for her to drive her car to and from work each night. She considered that the travel problems associated with the hours of work were appreciated by Telecom, and this was reflected in the content of advertisements for night-shift

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positions placed by her employer in daily newspapers. There it was stated that an applicant should possess the ``quality'' of holding either a current driving licence or have availability to private transport. The taxpayer's claims for deduction thus centred about the running costs of using her car when driving to and from work.

3. The taxpayer's tax returns were prepared by a firm of accountants, as were her notices of objection, and to avoid any suggestion that the taxpayer's claims were excessive, the firm deducted from the car running cost totals for each of the years in issue what it would have cost her to travel to and from work each night by train (which presumably was the mode of transport the taxpayer would have used had she worked conventional hours), and claimed on her behalf the residual figure only.

4. The taxpayer based her arguments on the following grounds:

• (a) She was required to use her car to drive to and from work and incur running costs for same because there was no public transport on which to travel at the time she journeyed home from work.
• (b) It was a condition of her employment that she have a current driver's licence.
• (c) Telecom Administrative Order 10/C/7 provides for payment of an allowance to an employee who uses his/her private vehicle to get to work.
• (d) A similar claim for a tax deduction to those she was now making was allowed in her return for the year of income ended 30 June 1978.
• (e) Other telephonists have been allowed claims similar to her own.

5. Unfortunately for the taxpayer, all of the above grounds lack substance and the basic facts of her case do not enable us to distinguish her situation from that which appertained in
Hayley v. F.C. of T. and Lunney v. F.C. of T. (1957-1958) 100 C.L.R. 478. There, the High Court was concerned with claims by employees for deductions for fares spent in travelling to work, and disallowed those claims. The Court stated at p. 498:

``The question whether the fares which were paid by the appellants are deductible under sec. 51 should not and, indeed, cannot be solved simply by a process of reasoning which asserts that because expenditure on fares from a taxpayer's residence to his place of employment or place of business is necessary if assessable income is to be derived, such expenditure must be regarded as `incidental and relevant' to the derivation of such income.''

Similarly with the taxpayer's expenditures on driving her car to and from work. The fact that there was no public transport available for her in the early hours of the morning does not give rise to a tax deduction for using more costly alternative transport. The taxpayer conceded that her duties commenced at 6 p.m. when she clocked on and terminated at 1.18 a.m. when she clocked off. As was said in Hayley and Lunney, the travel expenditures incurred by her were simply ``a necessary consequence of living in one place and working in another''. We find that the car running costs as claimed were not incurred in gaining or producing her assessable income as required by sec. 51(1); rather, we see them as private expenditures. (It might be well to interpolate here that the taxpayer was compensated for the inconveniences engendered by the night shift hours by the payment of penalty rates by her employer.)

6. The taxpayer's case is not assisted by the fact that she met her employer's requirement of holding a current driver's licence. It is not possible to elevate the language of the advertisement to a level whereby the word ``quality'' can be properly categorised as a condition of employment and, even if it could be so categorised, that fact of itself would not conclude the matter in the taxpayer's favour, see
F.C. of T. v. Wilkinson 83 ATC 4295 at p. 4303.

7. We move on to considering the taxpayer's next argument, namely the terms of her employer's Administrative Order 10/C/7. A copy of that document was tendered in evidence by an officer of Telecom called by the Commissioner as a witness; it, however, clearly referred to the specific situation where a private vehicle was used to travel to work because the public transport system was affected by industrial action. An allowance paid for such use can only be regarded as a once-off type payment, and thus provides no support for the taxpayer in her argument.

8. Finally, the taxpayer's arguments advanced at the procedural level, viz. that a

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similar claim was allowed to her in a previous year, and that other telephonists have been allowed similar claims, can have no bearing on our considerations. The case of
Sugar Loaf Colliery Ltd. v. C. of T. (Qld.) (1940) 5 A.T.D. 378 is authority for the proposition that if the Commissioner wrongly construes the law in the assessment of a particular year, he is not bound by such misconstruction in the assessment of a subsequent year.

9. The rationale of that proposition was explained by this Board (as then constituted) in Case E12
(1954) 5 T.B.R.D. 65, where it stated at p. 67:

``Income tax is levied and payable for each financial year separately upon the taxable income derived by a taxpayer during the relevant year of income. The Commissioner is required to administer the Income Tax Assessment Act and any assessment which he makes of the amount of taxable income of a taxpayer must be made by him, as he sees it, in accordance with the provisions of the Act. He has no option to do otherwise. In making an assessment, such as in the case now before the Board, he is not bound by any decision, whether made by himself or a predecessor in office, in respect of a previous year, if he is of opinion that that decision was or is, for immediate purposes, in conflict with the requirements of the Act.''

10. The same point was made in more general terms in
F.C. of T. v. Wade (1951) 9 A.T.D. 337, where Kitto J. stated at p. 344 that no conduct on the part of the Commissioner could operate as an estoppel against the operation of the Act.

11. We sympathise with the taxpayer in this matter, but we can do no more than that.

12. Regarding the further point made by her that other telephonists received deductions for travel outlays, we can only say that the possibility always exists that their fact situations were different in a material way to hers; alternatively, and more probably, they, too, may have obtained deductions in error.

13. For the reasons detailed above, we uphold the Commissioner's action in disallowing the claims made and confirm the assessments for the years in issue.

Claims disallowed