Burden of proof for directors' fees deduction failed where shareholders fixed their own remuneration and gave no supporting evidence.

A taxpayer claiming a deduction for directors' fees had to prove that the whole amount was exclusively incurred in producing assessable income. The burden lay on the objector to show that the assessment was excessive, and the Commissioner was not bound to accept the company's resolution and vouchers at face value where the same individuals were sole shareholders and sole directors, fixed their own remuneration late in the year, and declined to explain the basis of the fee determination. On the evidence, the deduction was not proved in full and the assessment was not shown to be excessive.

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Issues: Whether the appellants had proved that the directors' fees of 10,000 were exclusively incurred in the production of assessable income and were therefore deductible in full.

Analysis: The statutory scheme placed the burden on the objector to show that the assessment was excessive. The evidence showed that the same persons were both sole shareholders and sole directors, that they fixed their own remuneration near the end of the accounting year, and that they declined to give evidence on the circumstances in which the fees were fixed. In that setting, the Commissioner was not confined to accepting the company's resolution and vouchers at face value. The Magistrate was entitled to conclude, on the whole of the evidence, that the appellants had not discharged the burden of proving that the whole of the amount claimed was exclusively incurred in earning the assessable income.

Conclusion: The deduction was not established in full and the assessment was not shown to be excessive; the issue was decided against the appellants.

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