Page 39 - TAX4862/2 APPLIED TAXATION

GENERAL DEDUCTION FORMULA

Negative test

 It was unthinkable that the taxpayer should not

comply with the Sullivan Code and concluded

that the expenses were incurred for the

performance of the taxpayer’s income-

producing operations and formed part of the

cost of performing it. This meant that the

expenditure had been ‘incurred for the purposes

of trade and for no other’, and was therefore

incurred in the production of income.

 Warner Lambert v CIR

39