1TAXATION ASSIGNMENT Answer (1): Requirement-1: Issue: In the given scenario, it is seen whether the expenditures incurred by any taxpayer in moving anycapital asset should be taken as permissible for deduction. Rule: i) “Section 8 (1) of the ITAA 1997”ii) “British Insulated & Helsby Cables v Atherton 1926”Application: The concerned expenditures of the taxpayers, as stated in the “Section 8 (1) of the ITAA 1997”,are applicable for deductions when the amount is in the form of loss or incurred as outgoing capitaland also when the expenditure is private expenditure. The expenditure is allowable for deductions,which are a part of daily functions of enterprises. The given scenario, dealing with shifting of themachineries from an old site to new one, shows the outgoing type of capital and is a smallvariation and therefore, the same is not considered allowable deductions (Jacob and Jacob 2013). Taking reference of the case of “British Insulated and Helsby Cables Ltd v Atherton 1926”, thedepreciable properties shifted, caused a hike in the benefits of the commercial enterprise andtherefore should not be taken as permissible deduction because of their capital expenditure nature.As per the “Taxation ruling of IT 2197”, the expenditures of outgoing machines and installing thesame shall not be permissible for tax deduction (Law.ato.gov.au, 2017).

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