Kit-Win Holdings (1973) Ltd. v. The Queen, 81 DTC 5030, [1981] CTC 43 (FCTD)

The intentions of the dominant member of a land-development syndicate were attributed to the taxpayer, which was a more passive member, for the purpose of determining whether it had acquired its interest in the syndicate lands on capital account.

"If the Minister has failed to allege as a fact an essential ingredient to the validity of the assessment under the applicable statutory provision there is no onus on then the taxpayer to disprove that fact." Here, there had been a failure to plead that a syndicate had, at the time of acquisition of real property, the intention of possibly disposing of the property at a profit and that that possibility was a motivating factor that induced the purchase. Instead, the Minister had only pleaded that the plaintiff "was always willing to sell the said land building provided a reasonable profit could be realized." There, accordingly, was no onus on the plaintiff to disprove secondary intention.

The plaintiff's intention at the time of acquiring land was to build (10 years later) and then operate an industrial park thereon for profit or, if that was not its exclusive intention, then also with the possibility being present as a motivating factor in the plaintiff's mind that the land might be resold at a profit. Since the presence of the latter, secondary intention was not pleaded as an assumption by the Minister, the plaintiff's appeal was allowed.