Case W65

Members:
Hartigan J

Tribunal:
Administrative Appeals Tribunal

Decision date: 3 July 1989.

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Hartigan J. (President)

This matter which was listed initially as a directions hearing raises the issue of the scope of the power of this Tribunal under sec. 190(a) of the Income Tax Assessment Act 1936 (ITAA) to allow a taxpayer to amend the grounds stated in his objection. At the hearing the applicant sought an order under sec. 190(a) of the ITAA. Counsel for both parties asked me to embark on the hearing in order to dispose of the present application and to that extent the substantive hearing on the merits could then take place on an adjourned day. I adopted that course.

2. The respondent opposes some of the relief sought by the applicant under sec. 190(a). That section provides:

``190. In proceedings under this Part on a review before the Tribunal or an appeal to a court -

(a) the taxpayer shall, unless the Tribunal or court otherwise orders, be limited to the grounds stated in his objection;...''

3. Section 190(a) appears in Div. 2 of Pt V of the ITAA. Part V sets up a comprehensive scheme for the review of decisions made on objections lodged by taxpayers. The Tribunal with various statutory modifications has replaced the Taxation Board of Review which had exercised at an earlier time a jurisdiction under the ITAA. ``Tribunal'' is defined in sec. 6(1) of the ITAA to mean the Administrative Appeals Tribunal.

4. Section 190(a) has now been examined by this Tribunal on a number of occasions: see Case U47,
87 ATC 326, Case U159
87 ATC 930, Case V49,
88 ATC 381, Case V102,
88 ATC 657 and more recently Case V154,
88 ATC 975 and Case V169,
88 ATC 1126.

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Following Case V154, however, a difference of opinion has now emerged within this Tribunal. I was not referred to any decision of a court on the point.

5. The present proceedings are concerned with income tax years 1978 to 1983 both inclusive. The amendments which are sought to be made to the grounds of objection in each year are identified in documents tendered to the Tribunal, one of which is entitled ``Additional Grounds for Objection Against Assessments - years ended 30 June 1978 to 1983 inclusive'' and admitted as part of exhibit 1. Though the grounds of objection and the proposed amendments in respect of each tax year are not identical, similar considerations arise in respect of all the proposed amendments in the tax years in question. I find it helpful to illustrate my reasons by annexing part of exhibit 1 to these reasons. The proposed amendments are summarised in a document entitled ``Schedule of Additional Grounds of Objection'' which forms part of exhibit 1.

6. The present proceedings are concerned with income tax years 1978 to 1983 both inclusive. The original grounds of appeal can be illustrated by the grounds relating to income year 1978.

``(1) The said amount of $529,845 is income derived from the working of, or incidental to, the working of a mining property in Australia principally for the purpose of obtaining gold and is exempt from tax, pursuant to Section 23(o) of the Income Tax Assessment Act 1936 (as amended).

(2) Alternatively, even if the said amount of $529,845 is income to which Section 23(o) does not apply, which is not admitted, the whole of that amount was not received by the Company during the said year of income and only such part as was so received, being an amount of $460,507, represents income derived by the Company during the said year of income and the remainder of the said amount should not be included in the assessable income of the Company for the said year of income.

(3) In addition, if the amount of income received is not income to which Section 23(o) applies, then the amount of interest that represents assessable income for the year should be reduced by all or any, or any part, of the following deductions:

• (a) deduction under Section 51 for the net loss on the rental of employee housing, amounting to $277,972;
• (b) deduction under Section 51 in respect of administrative expenses totalling $376,504;
• (c) deduction under Section 82AAC for superannuation contributions made in respect of resident employees amounting to $118,234.''

7. Mr Uren Q.C. who appeared for the respondent Commissioner did not oppose the addition of ground 4 in income year 1978 and its equivalent ground in each of the other tax years.

8. In regard to the remaining proposed additional grounds it can be said that in some of them the taxpayer seeks to increase the amount of the deduction sought and in others the taxpayer seeks to add entirely new claims as a basis for objection. In both categories the applications are opposed by the respondent.

9. Mr Nettle for the taxpayer submitted that the discretionary power given to the Court and to the Tribunal under sec. 190(a) is on its face a wide power. In relation to the additional grounds sought to be added Mr Nettle submitted that the Tribunal ought to allow those additional grounds as they are ``bona fide taken so as to put in issue the true facts determining our taxation liability in circumstances where they were not first included because of error or mistake''.

10. As the cases to which I referred earlier clearly set out, the position that previously prevailed under the Income Tax Assessment Act was that a taxpayer was strictly bound by the grounds of his objection. There was no power in the Commissioner of Taxation or the courts to allow the taxpayer to add a new ground to his notice of objection or to argue any issue not raised by it; cf. Case K54,
78 ATC 523. As from 1 July 1986, however, pursuant to the Taxation Boards of Review (Transfer of Jurisdiction) Act 1986 the Income Tax Assessment Act was amended to confer on the Supreme Courts and this Tribunal the discretionary power to allow amendment to the grounds of objection. There was a later

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consequential amendment which is of no relevance here; see Act No. 112 of 1986.

11. The Tribunal in Case V154 has set out all the views that have been expressed by the Tribunal on the scope of sec. 190(a). It is not necessary that I repeat that exercise. I would, however, note what has become the point of difference amongst members of this Tribunal. The view that this Tribunal has adopted in Cases V49 and V102 is that the discretion conferred by sec. 190(a) cannot be exercised ``to enable the scope of the relief sought to be enlarged but only the amendment of the grounds upon which relief which has been sought should be allowed''; see Case V49 at p. 386. Whereas in Case V154 the Tribunal there said at p. 986:

``I consider that the power conferred on the Tribunal or the court by sec. 190(a) is a power to permit the taxpayer to extend the grounds of objection to the assessment so that they may include any matter which could have been included in the original objection (leaving on one side questions arising from changes in the law since the date of that original objection, with which I am not here concerned).''

12. Mr Nettle referred to the explanatory memorandum relating to the Bill which amended sec. 190(a) of the ITAA in the relevant way. This was done so as to either confirm the ordinary meaning of the provision, namely that the power under sec. 190(a) was equivalent to the wide powers often given to courts to allow amendments or, in the case of ambiguity, to show that the power intended to be given was such a wide power. This material was tendered without objection. However, the words of the memorandum cannot displace the words of the Act (see
Re Bolton & Anor; Ex parte Beane (1987) 162 C.L.R. 514). In view of the clear wording of sec. 190(a) and the clearly expressed purpose of Div. 2 of Pt V of the ITAA I have not had to rely on the extrinsic material notwithstanding Mr Nettle's reliance upon that material and the arguments he based upon it.

13. The issue here quite simply is whether sec. 190(a) will allow the relief sought itself to be amended and not merely the grounds for that relief. On the one hand as Mr Uren Q.C., senior counsel for the Commissioner, pointed out, sec. 190(a) is at first glance wide enough to seemingly permit the amendment sought. However, sec. 190(a) has to be read in the context of the Income Tax Assessment Act. In particular it should be read having regard to sec. 170 of the Income Tax Assessment Act. Section 170 is designed for the purpose of allowing a taxpayer to seek additional relief from an assessment that has issued by way of amendment to that assessment. Subsection 170(1) provides:

``170(1) The Commissioner may, subject to this section, at any time amend any assessment by making such alterations therein or additions thereto as he thinks necessary, notwithstanding that tax may have been paid in respect of the assessment.''

14. The case for the Commissioner involved the categorisation of the proposed grounds into three categories:

• (a) Either new claims for deductions not previously claimed. They were entirely new as to their subject matter or new as to the amount claimed.
• (b) And/or they were new claims based on facts not disclosed to the Commissioner in previous material.
• (c) And/or they were disguised attempts to bring new claims which ought properly to be considered as claims to have the assessments themselves amended under sec. 170 of the Act but brought out of time so far as sec. 170 is concerned.

15. The basis of the Commissioner's case was that the subject of a review by the Tribunal or an appeal to the court is whether there is error of the Commissioner in the process of assessment. Mr Uren's submission was that there can be no error alleged in respect of claims for deductions which were unknown to the Commissioner because they were not made by the taxpayer or the facts were not disclosed to him before he made his assessment.

16. Mr Uren put this argument another way. He said that the subject of a review or an appeal is a review of the assessment on the grounds assigned to him for his dissatisfaction with the assessment. The taxpayer cannot be dissatisfied when he can show no error on the Commissioner's part but rather only his own ``error'' in not making the relevant claim or disclosing the relevant facts.

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17. It is necessary in order to follow this argument to refer to various sections of the ITAA. Subsection 161(1) provides in general terms that every person if required by the Commissioner shall furnish a return within a certain time which sets forth a full and complete statement of total income derived during the year of income and of any deductions or losses claimed by him.

18. Section 166 of the ITAA provides that the Commissioner shall make an assessment of the amount of the taxable income of any taxpayer and of the tax payable thereon from ``the returns, and from any other information in his [the Commissioner's] possession, or from any one or more of these sources''.

19. Under sec. 169 where any person is liable to pay tax under the Act, ``the Commissioner may make an assessment of the amount of such tax''.

20. Provision is made under sec. 169A(1) that where a return is furnished to the Commissioner, the Commissioner may accept either wholly or partly a statement in the return of the assessable income derived by the taxpayer and/or any allowable deductions or rebates to which it is claimed that the taxpayer is entitled and any other statement in the return relevant to the assessment. This acceptance may be made ``for the purposes of making an assessment in relation to the taxpayer under this Act''.

21. Section 170(1) provides:

``170(1) The Commissioner may, subject to this section, at any time amend any assessment by making such alterations therein or additions thereto as he thinks necessary, notwithstanding that tax may have been paid in respect of the assessment.''

22. Section 170(3) provides:

``170(3) Where a taxpayer has made to the Commissioner a full and true disclosure of all the material facts necessary for his assessment, and an assessment is made after that disclosure, no amendment of the assessment increasing the liability of the taxpayer in any particular shall be made after the expiration of 3 years from the date upon which the tax became due and payable under that assessment.''

23. Section 170(6) provides:

``170(6) Where an application for an amendment in his assessment is made by a taxpayer within 3 years from the date upon which the tax became due and payable under that assessment, and the taxpayer has supplied to the Commissioner within that period all information needed by the Commissioner for the purpose of deciding the application, the Commissioner may amend the assessment when he decides that application notwithstanding that that period has lapsed.''

24. Mr Uren summarised some results that flow from these provisions. Before an assessment is issued the taxpayer is free to supplement the material in his return. The Commissioner must use this information for the purpose of making his assessment.

25. If, however, an assessment has been made, Mr Uren submitted that there does not appear to be any power to amend a return in those circumstances. He also submitted that there does not appear to be any power to amend an assessment save within the limits provided by sec. 170 of the ITAA. If the time limits have expired, Mr Uren submitted that there did not appear to be power to extend them. Mr Uren's submission was that if a taxpayer wished to bring some error or mistake in a return to the Commissioner's notice or to have the Commissioner take some new view into account those things would have to be communicated to the Commissioner within three years from the date tax became due and payable under the assessment. The Commissioner would then be free to amend on the basis of what he was told during the three year period.

26. The next step in the Commissioner's case is to turn to the provisions of sec. 185(1), 186 and 187. They provide:

27. Subsection 185(1):

``185(1) A taxpayer dissatisfied with any assessment under this Act may, within 60 days after service of the notice of assessment, lodge with the Commissioner an objection in writing against the assessment stating fully and in detail the grounds on which he relies.''

28. Section 186:

``186 The Commissioner shall consider the objection, and may either disallow it, or

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allow it either wholly or in part, and shall serve the taxpayer by post or otherwise with written notice of his decision.''

29. Section 187:

``187 A taxpayer who is dissatisfied with a decision under section 186 on an objection by the taxpayer may, within 60 days after service on the taxpayer of notice of the decision, lodge with the Commissioner, in writing, either -

• (a) a request to refer the decision to the Tribunal; or
• (b) a request to refer the decision to a specified Supreme Court.''

30. Mr Uren's submissions in regard to these sections may be summarised in this way. A dissatisfied taxpayer may under sec. 185(1) lodge an objection which must state fully and in detail the grounds on which he relies. Mr Uren submits that the ground or grounds must relate to dissatisfaction with the process of assessment. The decision which is made under sec. 186 is one which deals with the ground or grounds of objection. Such a ground is one concerned with some part of the process of assessment. Therefore the decision is in respect of a ground concerned with the process of assessment. That, he submits, is the nature of the decision which falls to be referred under sec. 187.

31. Mr Uren referred to
Bailey & Ors v. F.C. of T. 77 ATC 4096; (1977) 136 C.L.R. 214 and
R. v. D.F.C. of T. (W.A.); Ex parte Briggs 87 ATC 4278; (1987) 14 F.C.R. 249 (Sheppard J.). In Bailey v. F.C. of T. (supra) at ATC pp. 4097-4098; C.L.R. pp. 216-217 Barwick C.J. said:

``The assessment of income tax is the process of applying the Act to a state of fact. The duty of the Commissioner is to assess the tax upon the material contained in the return or otherwise in the possession of the Commissioner (sec. 166), there being provision in sec. 167 for the Commissioner himself to determine in the given circumstances the assessable income of the taxpayer. It is that process of assessment which, by virtue of sec. 190(b), an appellant taxpayer must satisfy the Board of Review or an appellate court is `excessive'. If some step in that process which affects the amount of tax lacks the authority of the Act the assessment is `excessive': and the powers of sec. 195 or of sec. 199, as the case may be, become available.

I have elsewhere indicated, and now confirm, that, in my opinion, it is that process which must be exposed to the Court and with which the Court is exclusively concerned in an appeal by the taxpayer. The Act confers on the Commissioner the power and duty of assessment. It does not confer them upon the Court. It is, of course, otherwise in the case of the Board of Review: see sec. 192 and 193. Thus, the power of the Court given by sec. 199 is not a power of initial assessment but a power to correct error in the process of assessment adopted by the Commissioner, the Court being enabled to rectify the error by taking one of the appropriate courses specified in sec. 199.''

32. The Tribunal's attention was drawn particularly to the passage which states that it is the process of assessment which must be looked at by the Court or the Board in order to determine if the assessment is excessive.

33. Ex parte Briggs like Bailey's case was not directly concerned with the present issue before the Tribunal. There is a passage however in Sheppard J.'s judgment to which I was referred (at ATC p. 4289: F.C.R. p. 263):

``It is to be observed that sec. 166 empowers the Commissioner to use the returns lodged by a taxpayer and other information in his possession for the purpose of making an assessment of the amount of the taxable income of the taxpayer. The Commissioner may, pursuant to this section, rely entirely upon the returns, partly on the returns and partly on other information, or entirely on sources of information apart from the returns. The process in which he engages is described in Bailey v. F.C. of T. 77 ATC 4096; (1977) 136 C.L.R. 214. There, Barwick C.J. said (at ATC p. 4097; C.L.R. p. 216) that the assessment of income tax is the process of applying the Act to a state of fact. The duty of the Commissioner is to assess the tax upon the material contained in the return or otherwise in the possession of the Commissioner (sec. 166), there being provision in sec. 167 for the Commissioner himself to determine in the given

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circumstances the assessable income of the taxpayer.''

34. Since the hearing counsel have made further submissions in writing regarding the decisions of the Full Court of the Federal Court in
Hadfield Finance Pty. Ltd. v. F.C. of T. 88 ATC 4300; (1988) 79 A.L.R. 249. That appeal was to the Court from this Tribunal. It concerned the disallowance of an objection against an amended assessment for division of tax. The assessment was made pursuant to sec. 104 of the ITAA because the applicant had not in the year concerned been deemed to have made a sufficient distribution pursuant to sec. 105A of the ITAA.

35. In Hadfield's case, prior to the issue of the amended assessment, the applicant requested that the Commissioner under sec. 105AA determine a further period in which the applicant company sought to pay dividends so that a sufficient distribution could be made. This request was refused by the Commissioner and thereafter the amended assessment was made.

36. The Full Court in Hadfield's case considered that the Tribunal had no power to review the Commissioner's decision under sec. 105AA because the decision did not fall within the provisions of the ITAA relating to review by the Tribunal of the Commissioner's decisions disallowing objections.

37. To arrive at its decision the Full Court considered the ambit of those provisions of the ITAA. Thus the decision of the Full Court is relevant to the determination of the issue before this Tribunal.

38. I particularly refer to the following passages in the judgment of Foster J. (with whose reasons Woodward and Jenkinson JJ. agreed). Foster J. said (at ATC p. 4302; A.L.R. p. 252):

``It is thus plain that the Tribunal under these sections has power to review, on the merits only, those decisions of the respondent which can be said to form part of the process of `assessment' under the Act, i.e. the ascertainment of the amount of the taxpayer's taxable income and of the tax payable thereon.''

39. At a later point his Honour referred to what Kitto J. had said in
Batagol v. F.C. of T. (1963) 109 C.L.R. 243 in regard to the definition of ``assessment'' in the ITAA. Foster J. went on to say (at ATC p. 4303; A.L.R. p. 253):

``It is also important to bear in mind that the respondent makes his `assessment' from the `returns, and from any other information in his possession, or from any one or more of these sources' (sec. 166). The Act does not refer to the act of `ascertainment' being based upon any factual material which does not fall into these categories.''

40. His Honour (at ATC p. 4303; A.L.R. p. 253) referred to what was said by Smithers J. in
Intervest Corporation Pty. Ltd. v. F.C. of T. 84 ATC 4744 at pp. 4747-4748; (1984) 3 F.C.R. 591 at pp. 593-594; 58 A.L.R. 317 at pp. 319-320:

``Assessment as defined in sec. 6 of the Act is the ascertainment of the amount of taxable income and of the tax payable thereon. The amount of taxable income and the tax payable thereon must be ascertained by the Commissioner by reference to the facts before him concerning the income of the taxpayer. Those facts are established by the taxpayer's return of income and such other information as he may supply voluntarily or on demand of the Commissioner.''

41. Foster J. (at ATC p. 4304; A.L.R. p. 254) cited Smithers J. in Intervest (supra) (at ATC p. 4748; F.C.R. p. 595):

``The distinction between the Commissioner's assessment function and his administrative function is relevant in this case. It is in his administrative function that he may or may not sanction the taking of steps by a taxpayer which, if taken by him, may produce a state of facts by reference to which an amended assessment already made was made. When he approaches the task of making an assessment with reference to the facts before him and makes the necessary calculations for that purpose he is exercising his assessment function.''

42. Finally, in regard to Hadfield's case I set out what Foster J. said (at ATC p. 4306; A.L.R. p. 256):

``This latter process involves the application of the appropriate income tax legislation to the relevant facts as found by the Commissioner to exist at the time of that

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application. (See passage cited from Batagol.) In arriving at his ascertainment of this factual basis of the assessment, he will have to make decisions which may well involve rejection of assertions of fact made by or on behalf of the taxpayer. Such decisions are quite clearly, in my view, different in kind from decisions of a discretionary nature, allowing or disallowing a taxpayer an opportunity to produce an alteration to that factual basis such as by the payment of additional dividends in order to produce a sufficient distribution under sec. 105A.''

43. It was argued for the Commissioner in the case presently before the Tribunal that the decision of Foster J. referred to above supported the submission that if the addition of a new ground under sec. 190(a) of the ITAA would assert factual matters not appearing in the assessment process itself as being relevant to the assessment of tax then such an addition should not be allowed. It was submitted that it ought to be held that there is no power to add such a ground because if that occurred the ground would go beyond the ambit of the thing which is the subject of review or appeal namely the particular decision to disallow an objection to an assessment.

44. It was also submitted that if sec. 190(a) allowed the addition of grounds which raised for the first time new facts or material then the provisions relating to the furnishing of new material and the time limits in which this can occur would be circumvented. If the clear words of sec. 190(a) require that result then that result must happen. However, if the view that no new factual material can be made the subject of a sec. 190(a) order, then there is no violence done to the legislative scheme involved in the sections from the ITAA which I have set out above. In particular the purpose of sec. 170(3) is to arrive at finality and, so it appears to me, to protect, as a matter of public policy, the revenue after the expiration of the relevant three years.

45. I consider that there is a great deal of support to be gained from the authorities which have been referred to above for the respondent's view based on the submission that the objection must relate to the process of an assessment.

46. I also mention that notwithstanding that the reference to a Tribunal is deemed to be the making by the taxpayer of an application to the Tribunal for review of the decision that deeming is for the purposes of the Administrative Appeals Tribunal Act 1975 (sec. 189(2) of the ITAA). I do not consider that the authorities relating to ``decisions'' in the context of the Tribunal's jurisdiction are of assistance here. Section 190(a) deals with both reviews by the Tribunal and appeals to the Court. It seems to me to be preferable to regard the power to extend grounds as equal in both cases. How widely the actual discretion may be exercised under the power may differ in relation to the different tasks that the Tribunal and the Court perform under the provisions of the ITAA.

47. I consider that on the whole, the purpose behind the Income Tax Assessment Act appears to be that an assessment once made is final until challenged either by objection or an amended assessment is sought, provided they are both made within the time constraints that apply to either of those two avenues. I consider that the scheme of the ITAA seems to be to keep the two separate. The situation which prevailed prior to the amendment to sec. 190(a) was one of inflexibly holding a taxpayer to their original grounds of objection. The amendment viewed in that light and in the context of the Income Tax Assessment Act itself suggests that the distinction between sec. 170 and 190(a) has not varied and that the discretion to allow new grounds should not be allowed to amount to an amendment of the relief sought itself.

48. It follows that by attempting to increase the amounts on which the assessment was made one is not objecting to the assessment but one is actually seeking to have the assessment varied or, more properly expressed, amended. To that extent a taxpayer would be seeking to enlarge the grounds for relief and therefore should not be allowed to rely upon sec. 190(a).

49. At the hearing of this matter I received from counsel for the taxpayer a list of the additional grounds for objection against the assessments for the relevant years. That list is of some length and I am minded to direct the parties to settle between themselves those additional grounds to which the Commissioner will consent as indicated in para. 2 of these reasons. Accordingly I direct that to the extent that a claim has been made to which the taxpayer now seeks to add an alternative ground as the basis for the objection that the

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taxpayer be allowed to do so. To the extent that the taxpayer now seeks to increase the amount of relief sought in respect of a particular deduction that the taxpayer not be allowed to do so. To the extent that the taxpayer wants to add completely new grounds as a basis for the objection the taxpayer not be allowed to do so.

50. I shall consider such further direction or directions as either party may request to give effect to the ruling which I have made. The further hearing of the matter shall come on for hearing on a date to be fixed. Liberty to apply generally is given to both parties.

Schedule of additional grounds of objection

In respect of the assessment issued by the Commissioner of Taxation for the year of income ended 30 June 1978, the additional grounds are:

``(4) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $277,972 in the year of income in providing employee housing in carrying on an exempt business in Australia, and that loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.

(5) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $216,847 during the year of income on exploration or prospecting on a mining tenement in Australia for minerals obtainable by prescribed mining operations and the said amount of $216,847 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 122J of the Act.

(6) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $4,615 during the year of income on interest expenses and the said amount of $4,615 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 51 of the Act.

(7) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $17,706 during the year of income on rates and/or taxes in respect of land that is or premises that are used by the Company for the purpose of carrying on a business for the purpose of gaining or producing income, and the said amount of $17,706 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 72 of the Act.

(8) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $3,447 in the year of income in respect of exploration on mining properties other than the... mining property which would have been an allowable deduction under Section 122J of the Act if the income of the Company (if any) was assessable income and therefore such loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.''

In respect of the assessment issued by the Commissioner of Taxation for the year of income ended 30 June 1979 the additional grounds are:

``(4) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $221,247 in the year of income in providing employee housing in carrying on an exempt business in Australia, and that loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.

(5) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $388,080 during the year of income on exploration or prospecting on a mining tenement in Australia for minerals obtainable by prescribed mining operations and the said amount of $388,080 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 122J of the Act.

(6) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $8,066 during the year of income on interest expenses and the said amount of $8,066 or so much of the amount as the Administrative Appeals Tribunal shall

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allow, is an allowable deduction under Section 51 of the Act.

(7) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $30,123 during the year of income on rates and/or taxes in respect of land that is or premises that are used by the Company for the purpose of carrying on a business for the purpose of gaining or producing income, and the said amount of $30,123 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 72 of the Act.

(8) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $212,096 in the year of income in respect of exploration on mining properties other than the... mining property which would have been an allowable deduction under Section 122J of the Act if the income of the Company (if any) was assessable income and therefore such loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.''

In respect of the assessment issued by the Commissioner of Taxation for the year of income ended 30 June 1980 the additional grounds are:

``(3) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $530,697 (and not $518,988 as previously stated) in the year of income in respect of exploration on mining properties other than the... mining property which would have been an allowable deduction under Section 122J of the Act if the income of the Company (if any) was assessable income and therefore such loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.

(4) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $514,448 in the year of income in providing employee housing in carrying on an exempt business in Australia, and that loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.

(5) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $1,672,845 during the year of income on exploration or prospecting on a mining tenement in Australia for minerals obtainable by prescribed mining operations and the said amount of $1,672,845 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 122J of the Act.

(6) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $27,921 during the year of income on rates and/or taxes in respect of land that is or premises that are used by the Company for the purpose of carrying on a business for the purpose of gaining or producing income, and the said amount of $27,921 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 72 of the Act.

(7) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $10,000 during the year of income on a donation to The Sir Robert Menzies Memorial Trust, and the said amount of $10,000 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 78 of the Act. The amount of $10,000 was also included in the Company's claim for a deduction for administrative expenses of $386,387 under Section 51 of the Act.''

In respect of the assessment issued by the Commissioner of Taxation for the year of income ended 30 June 1981, the additional grounds are:

``(3) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $929,111 (and not $901,059 as previously stated) in the year of income in respect of exploration on mining properties other than the... mining property which would have been an allowable deduction under Section 122J of the Act if the income of the

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Company (if any) was assessable income and therefore such loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.

(4) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $526,942 in the year of income in providing employee housing in carrying on an exempt business in Australia, and that loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.

(5) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $2,471,139 during the year of income on exploration or prospecting on a mining tenement in Australia for minerals obtainable by prescribed mining operations and the said amount of $2,471,139 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 122J of the Act.

(6) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $42,358 during the year of income on rates and/or taxes in respect of land that is or premises that are used by the Company for the purpose of carrying on a business for the purpose of gaining or producing income, and the said amount of $42,358 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 72 of the Act.

(7) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $645 during the year of income on donations to the Red Cross Society ($40), the Spastic Welfare Society ($100) and the Western Australian Women's Amateur Athletic Association ($505) and the said amount of $645 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 78 of the Act. The amount of $645 was also included in the Company's claim for a deduction for administrative expenses of $421,892 under Section 51 of the Act.''

In respect of the assessment issued by the Commissioner of Taxation for the year of income ended 30 June 1982, the additional grounds are:

``(3) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $4,361,241 (and not $3,567,045 as stated in paragraph 2E of the Company's Notice of Objection) in the year of income in carrying on an exempt business in Australia, and that loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.

(4) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $490,216 in the year of income in providing employee housing in carrying on an exempt business in Australia, and that loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.

(5) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $5,565,535 during the year of income on exploration or prospecting on a mining tenement in Australia for minerals obtainable by prescribed mining operations and the said amount of $5,565,535 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 122J of the Act.

(6) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $44,257 during the year of income on rates and/or taxes in respect of land that is or premises that are used by the Company for the purpose of carrying on a business for the purpose of gaining or producing income, and the said amount of $44,257 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 72 of the Act.''

In respect of the assessment issued by the Commissioner of Taxation for the year of income ended 30 June 1983, the additional grounds are:

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``(3) Further and alternatively, without limiting the generality of the foregoing, the Company incurred a loss amounting to $433,159 in the year of income in providing employee housing in carrying on an exempt business in Australia, and that loss or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 77 of the Act.

(4) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $1,821,954 during the year of income on exploration or prospecting on a mining tenement in Australia for minerals obtainable by prescribed mining operations and the said amount of $1,821,954 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 122J of the Act.

(5) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $51,324 during the year of income on rates and/or taxes in respect of land that is or premises that are used by the Company for the purpose of carrying on a business for the purpose of gaining or producing income, and the said amount of $51,324 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 72 of the Act.

(6) Further and alternatively, without limiting the generality of the foregoing, the Company incurred expenditure amounting to $2,402,105 during the year of income on administrative expenses and the said amount of $2,402,105 or so much of the amount as the Administrative Appeals Tribunal shall allow, is an allowable deduction under Section 51 of the Act.''