Pratte,
J:—This
is
an
appeal
from
a
judgment
of
the
Trial
Division
dismissing
an
appeal
from
a
decision
of
the
Tax
Review
Board
relating
to
the
appellant’s
income
tax
for
the
1965
and
1966
taxation
years.
In
1965
and
1966
the
appellant
realized
a
total
profit
of
$105,608.75
on
the
sale
of
his
interest
in
certain
lands
situated
on
Bourret
Street,
in
Montreal.
His
income
tax
for
those
years
was
first
assessed
on
the
basis
that
the
profit
of
$105,608.75
was
a
non-taxable
capital
gain.
However,
on
July
2,
1970,
the
Minister
of
National
Revenue
reassessed
the
tax
payable
by
the
appellant
for
1965
and
1966
on
the
basis
that
that
profit
was
income
from
a
business
within
the
meaning
of
the
Income
Tax
Act.
The
sole
question
for
determination
on
this
appeal
is
whether
the
Trial
Division
correctly
held
that
those
reassessments
had
been
legally
made.
It
was
first
argued
on
behalf
of
the
appellant
that
the
judge
below
had
erred
in
deciding
that
the
profit
realized
on
the
sale
of
the
Bourret
Street
property
was
not
a
capital
gain.
There
is,
in
my
view,
no
substance
in
that
argument.
A
mere
reading
of
the
record
shows
that
there
is
ample
evidence
Supporting
the
finding
of
the
Trial
Division
on
this
point.
The
appellant’s
second
argument
was
that
the
Minister
could
not
legally
reassess
the
appellant
on
the
basis
that
the
profit
in
question
was
income
because
he
had
previously
agreed
to
treat
that
profit
as
a
capital
gain.
Counsel
submitted
that
this
agreement
had
been
made
during
the
course
of
negotiations
between
representatives
of
the
appellant
and
officers
of
the
Department
of
National
Revenue
concerning
the
appellant’s
assessments
for
the
years
1961
to
1964.
The
appellant
had
agreed,
said
counsel,
not
to
appeal
his
assessments
for
the
1961
to
1964
taxation
years
on
the
understanding
that
his
income
tax
for
1965
would
be
computed
on
the
basis
that
the
profit
here
in
question
was
a
capital
gain.
Counsel
argued
that
the
Minister
could
not
repudiate
that
understanding,
particularly
after
the
expiry
of
the
time
within
which
the
appellant
might
have
appealed
the
1961
to
1964
assessments.
In
my
view,
the
trial
judge
correctly
dismissed
that
argument.
..
the
Minister
has
a
statutory
duty
to
assess
the
amount
of
tax
payable
on
the
facts
as
he
finds
them
in
accordance
with
the
law
as
he
understands
it.
It
follows
that
he
cannot
assess
for
some
amount
designed
to
implement
a
compromise
settlement
.
.
The
agreement
whereby
the
Minister
would
agree
to
assess
income
tax
otherwise
in
accordance
with
the
law
would,
in
my
view,
be
an
illegal
agreement.
Therefore,
even
if
the
record
supported
the
appellant’s
contention
that
the
Minister
agreed
to
treat
the
profit
here
in
question
as
a
capital
gain,
that
agreement
would
not
bind
the
Minister
and
would
not
prevent
him
from
assessing
the
tax
payable
by
the
appellant
in
accordance
with
the
requirements
of
the
statute.
For
these
reasons,
I
would
dismiss
the
appeal
with
costs.
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