(j) The taxpayers Mr Grieve and his wife purchased a rundown farming property of 216 acres for $33,000 in 1969. They formed a partnership with the intention of carrying on a farming business. When they acquired the land, it was not in a suitable condition for farming as the land was heavily infested with gorse, the pastures had deteriorated and the fencing was not in place. They had problems to improve the land because it was surrounded by a forestry area and a wine yard. Mr Grieve put lots of efforts to improve the land slowly and established a Hereford stud herd (of a modest size in 1980 with the intention to bring some profit to them. He worked full-time in the farm and his son joined him as full-time worker from 1975 to 1977. The partnership had made losses from 1972 to 1977. However, only losses from 1972 to 1975 were allowed to be offset against their other income. The Commissioner disallowed the losses in 1976 and 1977 as they said the taxpayers were not carrying on a business in those years. Taxpayers claimed that they had put in time and efforts to slowly improve the land with the intention to make profit from it. Thus, he was carrying on a farming business and losses should be allowed. Discuss whether the partnership was carrying on a business activity in 1976 and 1977 and whether the losses should be allowed.