80 ATC 689
HP Stevens Ch
CF Fairleigh QC
JR Harrowell M
No. 1 Board of Review
Judgment date: 12 December 1980.
H.P. Stevens (Chairman); C.F. Fairleigh Q.C. and J.R. Harrowell (Members): In his return of income for the year ended 30 June 1978, a grazier claimed an investment
80 ATC 690
allowance with respect to a tractor and this was granted in the assessment, and with respect to equipment to be used with it, i.e. a ``carry-all'' which cost $252 and a soil ``ripper'' which cost $164, viz. 40% of $416 ($166).
2. The Commissioner adjusted the income as returned by disallowing the said $166 and a notice of assessment issued accordingly.
3. The taxpayer objected thereto; the Commissioner decided to disallow the objection; that decision was referred to this Board for review.
4. The taxpayer contends that the entitling provision in sec. 82AB(1), viz. the eligible expenditure on a new unit of eligible property must exceed $500, is met where the ``unit'' consists of a tractor purchased from one vendor, and a ``carry-all'' and a ``ripper'' purchased from another vendor with a cost for the three in excess of $500 as ``the implements form part of the tractor, and cannot be used apart from the tractor, and... form part of a package deal''.
5. The intention of the taxpayer was to purchase the tractor with the aforesaid equipment from the one vendor. He found that the equipment was not obtainable from that vendor and thus the purchases were spaced within a few weeks. The separateness of the purchases is not the central issue.
6. (a) There is an obiter dictum of McTiernan J. in
Wangaratta Woollen Mills Ltd. v. F.C. of T. 69 ATC 4095 at p. 4103; (1969) 119 C.L.R. 1 at p. 14 with respect to a different section of the Act which is of present relevance viz.:
``It is true that the... cannot be used without the... but the same could be said of any attachment for a tractor such as a mower or post hole digger operated from a power take off.''
(b) There is also an analogy to be drawn from the decision of Kitto J. in
Ready Mixed Concrete (Vic.) Pty. Ltd. v. F.C. of T. 69 ATC 4038; (1969) 118 C.L.R. 177; 15 A.T.D. 215, as to plant used for mixing concrete and being a container on the delivery vehicle.
7. However, if those cases are left to one side as not being conclusive of the present issue, the position is demonstrated by the description in a brochure (Exhibit 1 on the reference) of a tractor as a ``workhorse''. Just as the harness for a farm horse is something which is separate and distinct from the horse, and similarly any agriculture implement which is attached to the harness and is dragged by the horse is something which is separate and distinct from the horse (and also from the harness) so here, the tractor is separate and distinct from the carry-all, and from the ripper; and each of those articles is separate and distinct from the other. For example, the taxpayer might find it desirable to keep the tractor and the ripper, and to sell the carry-all, as he has a front-end loader for the tractor; or the taxpayer might find that the engine of the tractor is over powered or under powered for the use he makes of it and he might sell the tractor and buy a different make of tractor which he thereupon uses with the same ripper and the same carry-all. The taxpayer's representative is correct in saying that neither the carry-all nor the ripper can be put to any use unless attached to a tractor; and, of course the tractor has to be in operable condition with an efficient hydraulics system.
8. It is of little moment that if the carry-all is being used on the three point linkage and with the rear hydraulics system, then the ripper cannot at the same time be attached to the three point linkage; nor is it of any significance that whilst either one of those articles is attached to the three point linkage, and in use with the rear hydraulics, that a front-end loader can be fitted to the tractor and operated from the front hydraulics system.
9. As was stressed by the taxpayer's representative, no farmer or grazier would buy a tractor with the intention of using it solely as a motorised conveyance for one person - certainly not where the tractor is fitted with both front and rear hydraulic systems for the operation of equipment at each end. The analogy which the Commissioner's representative sought to make with equipment which can be operated from the drive shaft of a four-wheel drive car or truck is quite inappropriate.
10. The carry-all, so also the ripper, is a separate physical object which is not designed and constructed as part of a tractor;
80 ATC 691
each may be contrasted with the wheels or tracks of the tractor, as the tractor is not complete unless it has wheels or tracks. Accordingly for the purposes of sec. 82AB the tractor is one unit, the carry-all is a second unit, and the ripper is a third unit; and as the cost of the second unit did not exceed $500, so also the cost of the third unit, each fails to meet the monetary test as in sec. 82AB(1)(b).
11. The decision on the objection is correct, and the assessment is confirmed.