Hudson and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal considered a dispute between the Applicant, Mr Hudson, and the Commissioner of Taxation concerning claims for work-related car expenses and depreciation for the 2017 income year. The Applicant had claimed significantly higher amounts for both categories than were allowed by the Respondent. The Tribunal also noted a concession by the Respondent regarding certain office expenses, which were to be allowed in full.

The core legal issues before the Tribunal were whether the Applicant was entitled to deduct travel expenses incurred in transporting bulky equipment between his home and various work sites under section 8-1 of the *Income Tax Assessment Act 1997* (ITAA), and whether he was entitled to deductions for car depreciation, including a balancing adjustment on the sale of his vehicle, also under section 8-1 of the ITAA and subdivision 40-D of the ITAA. The Applicant bore the onus of proving that the Commissioner's amended assessments were excessive.

The Tribunal's reasoning focused on the Applicant's obligation to transport bulky equipment. Evidence from the Applicant's employer indicated that the Applicant was not required to carry items such as protective clothing, a computer monitor, or tools like hammers and screwdrivers as part of his role as a business analyst. While the employer confirmed the need for PPE and that there was no storage at Sydney Trains facilities, they stated that the Applicant was not required to supply his own monitor or carry it from home for his role with them, and that his role did not involve transporting other team members. The Tribunal found that the Applicant had not discharged the burden of proof to demonstrate that the transport of materials was essential to his income-producing activity rather than a matter of personal choice, nor had he established that the sale of the vehicle to his company was an arm's length transaction for the purposes of the balancing adjustment.

Consequently, the Tribunal affirmed the Commissioner's amended assessments in relation to the car expenses and depreciation deductions. The Tribunal also substituted the Commissioner's objection decision with a decision allowing the Applicant's claimed office expenses in full, amounting to $320.23, as conceded by the Respondent.