I.R.D. decision upheld

Press, 24 April 1986, Page 35

I.R.D. decision upheld

PA Wellington The Inland Revenue Department has disallowed a claim by a man who sought a tax deduction for subscribing to a club where he had entertained the Governor-Gen-eral. The Commissioner of Inland Revenue had disallowed the deduction when the man filed his return for the year ended March, 1984. However, the man objected and took the matter to the Taxation Re-

view Authority. After a hearing on March 17 in Wellington, Judge Bathgate backed the commissioner’s decision. The man, who is identified in Judge Bathgate’s 13-page decision only as the objector, was appointed to an office of the Crown in 1979 by warrant of the Governor-General. He was the first person to assume the newly created office. The man said in a letter to the department that he had only joined the club

“so that I could extend hospitality to various officials with whom I came in contact.” Those officials included the Governor-General, Cabinet Ministers, members of Parliament, the presidents of local societies, and a considerable number of overseas Government officials. The man was charged an annual subscription for his membership of the club. In the years before and after the year ended March 31, 1984, the com-

missioner allowed the subscription as a tax deduction, said Judge Bathgate. But he said that the expenditure was not required of the man, either by his employer or by the Crown. It was not a condition of his employment. “It was solely the objector’s own decision to incur the expenditure. He was the person best suited to decide that issue. “At most it was more of a social obligation or convention,” he said.