XGPH and Commissioner of Taxation (Taxation)

This matter concerned an appeal by the taxpayer (Applicant) against a decision of the Commissioner of Taxation (Respondent) regarding the deductibility of certain work-related expenses for the 2019 income year. The dispute centred on the Applicant's failure to adequately substantiate these claimed expenses, leading to their disallowance by the Commissioner. The decision was made by Deputy President D Mitchell M of the Administrative Appeals Tribunal.

The primary legal issues before the Tribunal were whether the Applicant had discharged his onus to prove that his 2019 income tax assessment was excessive or incorrect, specifically in relation to deductions claimed for work-related car expenses, work-related travel expenses, and other work-related expenses. A key aspect of the determination involved the application of the substantiation requirements under Division 900 of the *Income Tax Assessment Act 1997* (ITAA 1997), including the Commissioner's discretion under section 900-195 to allow a deduction where substantiation rules have not been strictly followed, provided the nature and quality of the evidence satisfies the Commissioner that the expense was incurred and deductible.

The Tribunal considered the evidence presented by the Applicant in light of the statutory requirements for substantiation, including the need for written evidence from suppliers as outlined in section 900-115, and the principles for exercising the discretion under section 900-195, which require contemporaneous and certain evidence. The Tribunal found that the Applicant had not discharged his onus to prove that his assessment was incorrect in relation to work-related car expenses, work-related travel expenses, and certain other work-related expenses. However, the Tribunal was satisfied that the Applicant had discharged his onus in relation to specific other work-related expenses, namely the rental of office space, the purchase of an audiobook, and training services received in connection with his ballet role, as well as work-related self-education expenses.

Consequently, the Tribunal varied the objection decision. The Applicant's allowable deductions for work-related self-education expenses for the 2019 year were increased to $6,678.91, and allowable deductions for other work-related expenses were increased to $4,117.49, to include specific items allowed by the Respondent at audit but not reflected in the final assessment. The objection decision was otherwise affirmed in relation to all other disallowed deductions.