brief the facts for the case

apportionment is required. If an expense produces both income and a capital gain, an apportionment is not required . and the expense is fully deductible. Case: Commissioner of Inland Revenue v Banks [1978] 2 NZLR 472 (CA) (NZT Casebook at [8.2.02) The taxpayer was employed as a part-time polytechnic tutor to prepare and deliver lectures and to set and mark assignments , tests and exams. Except for actual tutoring times, the polytechnic did not provide an office or other facilities. The activities were performed in the taxpayer's home as there was no other place to do the work . In the relevant year, the taxpayer used the dining room solely and regularly for that purpose from six to eight hours per week for 35 weeks of the year. The taxpayer claimed expenses in relation to depreciation, interest , repairs, rates, insurance, heating and lighting in its tax return. The CIR disallowed the deduction. The Court of Appeal held that the expenses were deductible. Richardson J observed that the statutory language contained in s DA 1(1)(a): o "... [does not] specify in concrete terms the kind and degree of connection between the expenditure and the gaining or producing of assessable income required in individual cases for the expenditure to qualify for deduction." Richardson J added with approval the following passage from Amalgamated Zinc (de Bavay's) Ltd v Commissioner of Taxation (1935) 54 CLR 295 where Dixon J stated (emphasis added): "The expression 'in gaining or producing' has the force of in the course of gaining or producing and looks rather to the scope of the operations or activities and the relevance thereto of the expenditure than to purpose in itself. Richardson J then concluded (emphasis added): Sufhen becomes a matter of degree, and so a question of fact, to determine whether there is a sufficient relationship between the expenditure and what it provided, or sought to provide, on the one hand, and the income earning process, on the other, to fall within the words of the section." deductible due to the employment