Mac v Deputy Commissioner of Taxation

The Administrative Appeals Tribunal (AAT) considered the dispute between Mr. Mac and the Deputy Commissioner of Taxation (DTC) concerning the deductibility of certain expenses. Mr. Mac sought to deduct expenses incurred in relation to a property he owned, arguing they were incurred in the course of carrying on a business. The DTC disallowed these deductions, asserting that the activities did not constitute the carrying on of a business.

The primary legal issue before the Tribunal was whether Mr. Mac's activities in relation to the property amounted to the carrying on of a business for the purposes of the *Income Tax Assessment Act 1997* (Cth). This required the Tribunal to determine if the activities exhibited the characteristics of a business, such as a profit-making intention, systematic and repetitive conduct, and commercial scale.

Judge Driver reasoned that while Mr. Mac had a profit-making intention and engaged in some systematic activities, the scale and nature of his efforts were insufficient to establish the carrying on of a business. The Tribunal applied the established principles for determining whether an activity constitutes a business, considering factors such as the intention of the taxpayer, the repetition and regularity of the activities, the commercial nature of the undertaking, and the scale of operations. In this instance, the Tribunal found that the activities lacked the necessary commerciality and scale to be characterised as a business.

The Tribunal affirmed the DTC's decision, disallowing Mr. Mac's claimed deductions.