In 2021 Bob borrowed $700,000, for a period of 10 years at an interest rate of 6.5% pa from the ABC Bank, mainly to purchase retail premises from which he started up a bakery that he called Hotcakes. He also used the money to buy some equipment, cups, saucers, and ingredients to make baked goods and coffee. His intention was that people could either purchase takeaway from his bakery or sit down and eat the baked goods and coffee that he sold. Although Bob had high hopes for his business, he initially found it hard to attract customers. He sought advice from a firm of business consultants as to how to make the business more profitable. The consultants advised him that he should inject funds into the business to improve the look of the shop. The consultants charged $5,500 for this advice. On the advice of the consultants, Bob borrowed a further $50,000 from the ABC Bank for a period of 10 years at an interest rate of 7%. Bob used $35,000 of this money to purchase new display equipment. He used the $15,000 balance of the borrowed funds to help his sister Liz. Bob loaned the $15,000 to Liz at a rate of 2% pa. Bob was unaware until recently that a rival bakery had also been using the name "Hotcakes" for many years. In February, Bob was successfully sued by his rival in a "passing off" action. As a result, Bob was required to pay damages of $300,000 to the rival. He was also required to pay his lawyer's costs of $77,000. 

Required: 

Advise Bob of the deductibility of the above expenditure with reference to legislation and case law where relevant?