Dube,
J:—This
is
an
appeal
from
an
assessment
by
the
Minister
of
National
Revenue
on
appellant’s
income
for
1962.
Appellant,
who
is
now
69
years
old,
was
the
owner
of
48
shares
in
the
Compagnie
de
Marbre
et
de
Tuile
de
Québec
Ltée,
the
only
two
other
shares
being
held
by
his
wife
and
daughter.
During
1962,
he
decided
to
sell
his
business,
which
he
had
built
up
himself
and
which
he
had
operated
for
many
years.
He
gave
two
reasons
for
this
decision:
first,
he
was
getting
old
and
had
no
son
to
take
over
from
him;
second,
his
manager,
a
key
person
in
the
office,
was
seriously
ill
and
would
not
be
returning
to
work.
He
met
first
with
Charles
Lacroix,
a
prominent
businessman
in
Quebec,
and
showed
him
his
balance
sheet.
Lacroix
did
not
pursue
the
matter
further.
He
subsequently
heard
of
a
deal
made
by
another
financier,
Jean-
Marc
Baronet,
who
had
just
bought
a
new
business
by
purchasing
the
shares
in
a
company.
He
decided
to
meet
with
him
with
a
view,
as
he
said.
to
obtaining
information
on
the
way
he
should
go
about
selling
his
business.
It
should
be
mentioned
that
appellant
had
left
school
at
age
15,
and
this
explains
his
inexperience
regarding
this
type
of
transaction.
Baronet,
on
the
other
hand,
was
already
an
experienced
financier
at
this
time.
He
showed
a
keen
interest
in
the
matter
and,
according
to
Jobin,
offered
to
buy
the
business
himself
for
the
sum
of
$375,000
on
the
following
terms:
$300,000
cash
plus
Baronet’s
personal
note
for
$75,000,
provided
that
Jobin
loaned
the
company
$300,000
on
a
mortgage.
According
to
Jobin,
it
was
also
agreed
that
commissions
in
the
amount
of
$23,400
owed
appellant
by
the
company
would
be
repaid
to
him
as
weekly
wages
paid
by
the
company.
These
were
rather
simple
terms
in
which
appellant
regarded
the
transaction;
the
manoeuvres
behind
the
deal,
however,
were
somewhat
more
sophisticated.
The
deals
were
concluded
on
September
24
before
three
brokers
to
whom
Baronet
had
taken
Jobin.
According
to
the
latter,
all
the
documents
had
already
been
prepared.
He
was
a
little
taken
aback
to
find
himself
alone
in
this
group,
but
he
signed
without
protest
the
minutes
of
meetings,
the
sales
of
shares
and
the
cheques,
which
represented
the
essence
of
the
deals.
On
September
24,
1962
the
company
declared
dividends
of
$5,800
per
share
(that
is,
50
x
$5,800,
or
$290,000),
payable
to
shareholders
appearing
on
the
register
on
September
25.
Appellant
then
sold
the
50
shares
to
the
three
brokers
for
$6,000
a
share
(that
is,
50
x
$6,000,
or
$300,000).
As
president
of
the
company,
appellant
signed
three
dividend
cheques
in
the
names
of
the
three
brokers
dated
September
25.
On
September
25,
the
three
brokers
resold
the
company’s
shares
to
Baronet
for
$260
a
share
(that
is,
50
x
$260,
or
$13,000).
Appellant
wrote
a
cheque
for
$200,000
in
the
company’s
name
and
was
given
a
mortgage
in
the
same
amount
by
the
company.
It
can
be
seen
that
Baronet
became
owner
of
the
company
for
$13,000.
The
three
brokers
each
collected
$1,000
in
commissions.
Jobin
received
$100,000
in
cash
and
held
a
mortgage
of
$200,000
on
the
company’s
building
and
equipment.
The
company
was
stripped
of
its
surplus.
(The
company’s
surplus
account,
dated
December
31,
1961,
indicated
a
surplus
of
$290,230.74.)
By
a
contract
of
employment,
the
company
hired
Jobin
for
84
weeks:
10
weeks
at
$200
and
74
weeks
at
$300.
Jobin
explained
that
this
payment
represented
the
amount
of
commissions
which
the
company
owed
him
at
that
time.
Baronet,
on
the
other
hand,
maintained
that
the
contract
was
to
ensure
the
continued
services
of
Jobin.
In
a
written
statement,
Jobin
undertook
“not
to
carry
on
a
similar
business
in
the
province
of
Quebec
for
a
period
of
ten
years’’.
By
a
letter
dated
September
24,
Baronet
undertook
not
to
make
any
claim
upon
Jobin
“in
the
event
that
demands
.
.
.
are
made
on
the
said
company
for
taxes’’.
The
latter
document
was
prepared
at
the
suggestion
of
Jobin’s
attorney
and
accountant.
In
his
testimony
the
accountant
stated
that
the
only
information
Jobin
asked
him
for
was
whether
the
sale
of
his
company
was
subject
to
tax.
He
said
that
it
was
not,
but
the
attorney
and
accountant
dictated
the
aforementioned
document
on
the
telephone
to
protect
their
client.
Baronet
and
Jobin
also
agreed
that
the
cars
in
the
possession
of
appellant
and
his
wife
would
continue
to
be
for
their
personal
use
and
the
company
would
be
paid
for
them
at
their
book
value
when
they
were
changed.
To
replenish
the
company’s
funds,
Baronet
then
went
to
the
company’s
bank
with
Jobin
and
personally
guaranteed
a
loan
to
the
company
of
$90,000.
Some
time
after,
appellant
retired
to
Florida,
at
least
for
the
winter,
and
received
the
anticipated
salary.
In
the
spring
he
learned
from
his
brother
that
the
situation
at
the
company
was
deteriorating
and
returned.
He
found
the
premises
in
a
pitiful
condition.
The
new
owner
had
moved
elsewhere
in
Quebec,
taking
the
inventory
and
machinery
with
him.
No
payment
had
been
made
to
appellant
on
his
mortgage,
and
the
mortgage
covered
the
building
and
the
machinery.
A
meeting
was
held
between
Jobin
and
Baronet:
there
were
harsh
words
between
them.
According
to
Jobin,
Baronet
tearfully
suggested
that
he
would
go
bankrupt
if
Jobin
required
payment
of
the
mortgage.
The
note
for
$75,000
signed
by
Baronet
was
destroyed.
Jobin
resumed
possession
of
the
building.
On
August
17,
1964
the
company
was
put
into
liquidation
by
Baronet.
The
latter
withdrew
$60,271
at
the
distribution.
Appellant
tried
to
sell
the
building
through
a
real
estate
agency.
As
there
was
no
purchasers
he
decided
to
resume
the
marble
business
in
1965,
on
his
own
account
but
on
a
reduced
scale.
He
first
obtained
a
legal
notice
to
the
effect
that
“the
liquidation
of
the
company
rendered
the
agreement
void”,
and
that
he
could
begin
his
business
again.
Appellant
sustained
a
loss
as
a
result
of
all
of
this
which
he
set
at
$227,470.
This
figure
for
his
loss
is
based
on
a
sale
price
of
$375,000,
allows
the
building
a
market
value
on
the
date
it
was
re-transferred
of
$85,000
(an
amount
assumed
on
the
basis
of
the
company’s
books
but
not
established
in
evidence)
and
takes
into
consideration
cancellation
of
the
note
of
$75,000.
Further,
appellant
was
assessed
by
the
Minister
on
interest
of
$15,000
owed
on
the
mortgage
but
never
received
by
Jobin.
The
Minister
is
now
claiming
from
appellant
tax
on
the
sum
of
$290,000,
paid
in
dividends
to
the
three
brokers
on
September
24,
1972.
According
to
Baronet
the
purchase
price
of
the
shares
was
not
$375,000,
as
Jobin
understood,
but
actually
$300,000.
The
relationship
between
the
price
of
the
shares,
the
cheques
issued
and
the
company’s
surplus
suggests
that
a
price
of
$300,000
is
more
likely.
The
signature
by
Baronet
of
a
note
for
$75,000
and
its
eventual
destruction
remain
a
mystery.
Baronet
claimed
that
the
note
was
not
part
of
the
initial
price,
but
that
he
signed
it
at
the
last
minute
as
an
additional
condition
imposed
by
Jobin
to
cover
a
surplus
of
inventory.
He
admitted
that
the
note
was
torn
up
in
his
interview
with
Jobin,
when
he
treatened
the
latter
with
going
into
bankruptcy.
As
to
the
salary
paid
to
Jobin,
Baronet
described
it
as
a
legitimate
employment
contract
intended
to
obtain
Jobin’s
services.
According
to
Baronet,
Jobin
refused
to
co-operate
and
even
caused
trouble
among
the
employees
of
the
business
before
leaving
for
Florida.
He
regarded
this
lack
of
co-operation
as
one
of
the
factors
leading
to
the
failure
of
the
company.
Baronet
insisted
that
he
wanted
the
business
to
be
a
success,
as
indicated
by
his
personal
undertaking
in
the
loan
for
$90,000
to
get
the
company
moving
again.
According
to
him,
once
stripped
of
its
surplus
the
company
was
not
worth
more
than
$13,000,
and
that
is
what
he
paid
for
it.
According
to
Baronet,
another
reason
why
the
company
ran
into
trouble
was
that
existing
contracts
had
been
obtained
by
Jobin
at
figures
that
were
too
low.
In
his
reply
to
the
notice
of
appeal,
the
Minister
relied
on
subsections
2(1),
2(3),
sections
3,
4,
subsection
5(1),
paragraph
6(1
)(a),
subsections
8(1),
16(1),
16(2),
81(1),
81(3),
81(4),
paragraphs
82(1)(a),
82(1)(b),
82(1)(c),
subsections
137(2)
and
139(5)
of
the
Income
Tax
Act.
The
Minister’s
notice
of
assessment,
on
the
other
hand,
was
based
only
on
subsections
6(1),
16(1)
and
135(2).
However,
the
Minister
did
not
confine
his
arguments
to
the
section
of
the
Act
cited
in
the
notice
of
assessment.
In
his
reply
to
the
notice
of
appeal,
he
may
allege
other
facts
and
plead
other
sections
of
the
Act
(see
Conn
Stafford
Smythe
v
MNR,
[1969]
CTC
558;
69
DTC
536).
The
most
relevant
clauses
are
the
following:
6.(1)
Without
restricting
the
generality
of
section
3,
there
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year
(a)
amounts
received
in
the
year
as,
on
account
or
in
lieu
of
payment
of,
or
in
satisfaction
of
(i)
dividends,
8.(1)
Where,
in
a
taxation
year,
(b)
funds
or
property
of
a
corporation
have
been
appropriated
in
any
manner
whatsoever
to,
or
for
the
benefit
of,
a
shareholder,
or
(c)
a
benefit
or
advantage
has
been
conferred
on
the
shareholder
by
a
corporation,
otherwise
than,
(i)
on
the
reduction
of
capital,
the
redemption
of
shares
or
the
winding-up,
discontinuance
or
reorganization
of
its
business,
(ii)
by
payment
of
a
stock
dividend,
or
(iii)
the
conferring
on
all
holders
of
common
shares
in
the
capital
of
the
corporation
a
right
to
buy
additional
common
shares
therein
the
amount
of
value
there
of
shall
be
included
in
computing
the
income
of
the
shareholder
for
the
year.
16.(1)
A
payment
or
transfer
of
property
made
pursuant
to
the
direction
of,
or
with
the
concurrence
of,
a
taxpayer
to
some
other
person
for
the
benefit
of
the
taxpayer
or
as
a
benefit
that
the
taxpayer
desired
to
have
conferred
on
the
other
person
shall
be
included
in
computing
the
taxpayer’s
income
to
the
extent
that
it
would
be
if
the
payment
or
transfer
had
been
made
to
him.
(2)
For
the
purposes
of
this
Part,
a
payment
or
transfer
in
a
taxation
year
of
property
made
to
the
taxpayer
or
some
other
person
for
the
benefit
of
the
taxpayer
and
other
persons
jointly
in
a
taxation
year
shall
be
deemed
to
have
been
received
by
the
taxpayer
in
the
year
to
the
extent
of
his
interest
therein
notwithstanding
there
was
no
distribution
or
division
thereof
in
that
year.
81.(1)
Where
funds
or
property
of
a
corporation
have,
at
a
time
when
the
corporation
had
undistributed
income
on
hand,
been
distributed
or
otherwise
appropriated
in
any
manner
whatsoever
to
or
for
the
benefit
of
one
or
more
of
its
shareholders
on
the
winding-up,
discontinuance
or
reorganization
of
its
business,
a
dividend
shall
be
deemed
to
have
been
received
at
that
time
by
each
shareholder
equal
to
the
lesser
of
(a)
the
amount
or
value
of
the
funds
or
property
so
distributed
or
appropriated
to
him,
or
(b)
his
portion
of
the
undistributed
income
then
on
hand.
137.(2)
Where
the
result
of
one
or
more
sales,
exchanges,
declarations
of
trust,
or
other
transactions
of
any
kind
whatsoever
is
that
a
person
confers
a
benefit
on
a
taxpayer,
that
person
shall
be
deemed
to
have
made
a
payment
to
the
taxpayer
equal
to
the
amount
of
the
benefit
conferred
notwithstanding
the
form
or
legal
effect
of
the
transactions
or
that
one
or
more
other
persons
were
also
parties
thereto;
and,
whether
or
not
there
was
an
intention
to
avoid
or
evade
taxes
under
this
Act,
the
payment
shall,
depending
upon
the
circumstances,
be
(a)
included
in
computing
the
taxpayer’s
income
for
the
purpose
of
Part
I,
(b)
deemed
to
be
a
payment
to
the
non-resident
person
to
which
Part
III
applies,
or
(c)
deemed
to
be
a
disposition
by
way
of
gift
to
which
Part
IV
applies.
(3)
Where
it
is
established
that
a
sale,
exchange
or
other
transaction
was
entered
into
be
persons
dealing
at
arm’s
length,
bona
fide
and
not
pursuant
to,
or
as
part
of,
any
other
transaction
and
not
to
effect
payment,
in
whole
or
in
part,
of
an
existing
or
future
obligation,
no
party
thereto
shall
be
regarded,
for
the
purpose
of
this
section,
as
having
conferred
a
benefit
on
a
party
with
whom
he
was
so
dealing.
The
Minister
accordingly
relies
on
the
provisions
cited
above
in
arguing,
alternatively,
that
dividends
received
in
the
year
(subparagraph
6(1
)(a)(i));
a
payment
of
money
made
on
appellant’s
instructions
to
some
other
person
for
the
benefit
of
appellant
(subsection
16(1));
a
surplus
distributed
to
appellant
at
the
time
of
liquidation
(Subsection
81(1));
a
benefit
attributed
by
the
company
to
appellant
(paragraphs
8(1)(b)
and
8(1)(c));
or
a
benefit
conferred
on
appellant
by
the
transaction,
notwithstanding
the
form
of
the
transaction,
are
taxable
under
the
Act.
The
Minister’s
fundamental
proposition
is
that
the
three
brokers
were
appellant’s
mandataries
for
the
purposes
of
dividend
stripping,
and
that
the
payments
made
to
them
were
made
to
appellant
for
purposes
of
the
Act.
Learned
counsel
for
the
appellant
conceded
that
it
was
clearly
a
case
of
dividend
stripping,
but
he
submitted
that
it
was
Baronet
who
really
benefited
from
this
stripping
and
that
the
three
brokers
were
his
mandataries.
He
correctly
pointed
out
that
Jobin
did
not
know
the
brokers
and
that
they
had
been
called
in
by
Baronet.
In
fact,
Baronet
conceded
that
it
was
his
accountant
and
adviser
Guy
Fortier
who
called
in
the
brokers,
prepared
the
documents
and
organized
the
meeting
of
September
24,
1972.
Counsel
emphasized
that
according
to
Art
1702
of
the
Civil
Code,
a
mandate
is
gratuitous,
whereas
the
three
brokers
made
a
profit
of
$3,000
on
the
transactions.
The
calculation
of
the
amounts
concerned
may
support
the
conclusion
that
the
$3,000
of
commission
came
from
the
sum
of
$13,000
spent
by
Baronet.
It
is
also
inconceivable
that
a
man
with
as
little
experience
as
appellant
could
even
have
imagined
the
type
of
deal
concocted
by
Fortier
and
Baronet.
If
the
brokers
were
Jobin’s
mandataries,
they
obviously
were
so
unknown
to
him.
Morover,
if
Jobin
had
foreseen
the
liquidation
of
his
company
by
Baronet,
he
surely
would
not
have
invested
$200,000
without
first
having
obtained
a
personal
guarantee
by
Baronet.
As
he
put
it,
if
he
had
wanted
to
liquidate
he
would
have
done
it
himself,
without
going
through
Baronet.
It
seems
clear
that
the
liquidation
was
not
foreseen
by
either
of
the
two
parties.
It
is
very
difficult
to
believe
that
Jobin
knowingly
brought
about
the
destruction
of
his
life’s
work.
As
to
Baronet,
if
he
had
anticipated
a
liquidation
it
is
hard
to
see
why
he
would
have
offered
a
personal
guarantee
of
$90,000
when
the
loan
was
obtained
from
the
bank
to
get
the
company
moving
again.
He
also
would
not
have
continued
to
operate
the
company
and
to
assume
new
contracts
after
the
transaction
of
September
24,
1972.
Baronet
had
already
been
successful
with
this
type
of
transaction,
using
brokers,
in
his
earlier
purchase
of
another
company
of
the
same
kind.
This
other
company
had
not
been
liquidated
and
he
continues
to
operate
it
successfully.
It
is
therefore
not
very
hard
to
see
that
he
was
in
a
position
to
convince
Jobin
to
adopt
the
same
formula,
not
to
benefit
Jobin,
of
course,
but
to
enable
himself
to
purchase
another
profitable
company
in
full
operation
for
the
relatively
modest
sum
of
$13,000.
From
Baronet’s
point
of
view,
it
was
a
good
deal.
Does
the
Income
Tax
Act
require
Jobin
to
bear
the
cost?
Earlier
decisions
in
the
matter
of
dividend
stripping
indicate
certain
criteria
which
aid
in
penetrating
the
screen
of
complex
operations
behind
which
the
true
nature
of
the
transaction
is
concealed.
In
the
final
analysis,
however,
every
case
is
different
and
each
one
must
be
dealt
with
in
terms
of
the
particular
circumstances
surrounding
it.
At
the
outset,
it
should
be
noted
that
this
is
an
assessment
for
1962
prior
to
the
amendment,
section
138A,
which
conferred
on
the
Minister
a
discretionary
power
to
assess
any
amount
received
by
a
taxpayer
as
a
result
of
dividend
stripping
after
June
13,
1963,
including
amounts
received
for
the
sale
of
shares.
The
purpose
of
this
amendment,
of
course,
was
to
prevent
dividend
stripping,
hence
the
indication
that
the
sections
existing
before
that
date
did
not
have
the
desired
result.
As
section
138A
was
not
retroactive,
the
theory
of
agency,
or
mandate,
was
subsequently
developed
as
a
means
of
assessing
transactions
concluded
before
June
13,
1963,
and
according
to
it
brokers
involved
in
such
sales
were
only
agents
(or
mandataries
under
the
Civil
Code)
of
the
taxpayer
(see
“Why
Was
Section
138A
Enacted?”*).
In
a
case
of
contract,
agency,
or
mandate,
however,
the
agent
must
have
the
power
or
authority
to
represent
the
contracting
party.
This
power
may
derive
from
an
agreement
(as
in
the
case
of
the
mandatary)
or
it
may
be
legislative
or
judicial
(see
Les
obligations,
G
L
Beaudoin,
p
168).
The
mandate
may
be
written,
verbal
or
implied.
An
implied
mandate
may
result
from
a
series
of
acts
of
the
same
type
performed
by
the
mandatary
to
the
knowledge
of
the
mandator.
The
person
alleging
the
existence
of
a
mandate
must
prove
it,
and
in
the
absence
of
a
document,
an
implied
mandate
remains
subject
to
the
general
rules
of
contract,
including
the
rules
of
evidence
(see
Traité
de
droit
civil
du
Québec,
Art
1701,
pp
18
to
237).
In
the
present
context,
it
should
be
noted
that
the
alleged
mandator,
in
this
case
appellant,
denies
the
mandate,
and
that
the
alleged
mandataries,
the
three
brokers,
did
not
testify.
As
to
Baronet,
he
admitted
that
it
was
his
accountant
Fortier
who
put
together
the
entire
deal.
In
Simard-Beaudy
Inc
v
MNR,
[1974]
2
FC
131;
[1974]
CTC
715;
74
DTC
6552,
a
dividend
stripping
case,
my
brother
Addy,
J
came
to
the
conclusion
that
an
agent
was
the
alter
ego
of
the
vendor
companies
and
their
shareholders,
that
the
agent
was
acting
for
both
parties
to
the
transaction
“in
order
to
bring
to
fruition
the
planned
financial
operations’’,
that
the
manoeuvres
did
not
benefit
appellant
directly
but
indirectly,
since
otherwise
the
purchase
would
not
have
taken
place
at
the
agreed
price,
and
that
appellant
was
aware
of
the
manoeuvres
and
of
their
ultimate
aim.
He
nevertheless
allowed
the
appeal.
He
observed,
at
719
[6555]:
The
law
is
too
clear
for
any
useful
purpose
to
be
served
by
citing
jurisprudence
to
that
effect,
that
a
person
may
act
as
an
agent
of
two
people
without
thereby
creating
joint
responsibility
between
them
for
all
their
actions
or
for
those
of
the
agent.
The
fact
that
Melançon
was
acting
as
an
agent,
but
for
different
objects,
for
the
Simard
Brothers
and
their
company
on
the
one
part
and
for
Brillant
and
the
appellant
on
the
other
part,
could
and
should
in
the
present
circumstances
impute
a
mutual
knowledge
of
their
respective
actions
but
not
necessarily
a
mutual
responsibility
as
to
those
actions.
In
Conrad
David
v
The
Queen,
[1975]
FC
43;
[1975]
CTC
197;
75
DTC
5136,
my
brother
Walsh,
J
held
that
the
liquidation
was
part
of
the
plan
and
applied
paragraph
81(1)(b).
In
the
case
at
bar
the
evidence
does
not
demonstrate
that
Jobin
and
Baronet
concluded
their
deal
in
anticipation
of
the
liquidation.
On
the
contract,
the
actions
of
the
two
men
clearly
indicate
their
intention
to
continue
the
business.
Both
relied
on
the
successful
operation
of
the
company.
The
decision
of
the
Supreme
Court
of
Canada
in
Conn
Stafford
Smythe
v
MNR,
[1970]
5
CR
65;
[1969]
CTC
558;
69
DTC
5361,
is
a
leading
case
in
dividend
stripping
and
concerns
the
taxation
year
1961,
which
was
not
affected
by
the
amendment
in
section
138A,
cited
above.
In
that
case,
the
old
company
had
considerable
undistributed
income
on
hand.
A
new
company
was
formed
with
the
same
shareholders.
All
the
assets
of
the
old
company
were
sold
to
the
new
in
exchange
for
a
note.
When
all
the
rather
complex
transactions
were
concluded,
the
undistributed
income
of
the
old
company
was
in
the
hands
of
appellants.
The
Minister
assessed
them
pursuant
to
subsection
81(1).
The
Exchequer
Court
affirmed
the
assessment,
but
based
its
judgment
on
the
application
of
subsections
137(2)
and
8(1)
of
the
Act.
The
Supreme
Court
dismissed
the
shareholders’
appeals,
establishing
that
subsection
81(1)
of
the
Act
clearly
applied.
The
Court
found
that
there
had
been
a
liquidation
and
termination
of
the
business
of
the
old
company.
It
did
not
rule
on
the
scope
of
subsection
137(2).
In
Smythe
the
same
shareholders
in
effect
transferred
the
shares
of
an
old
company
to
a
new,
and
then
discontinued
any
commercial
activity
of
the
old
company.
In
the
case
at
bar,
Jobin
in
effect
transferred
the
shares
of
the
company,
not
to
himself,
but
to
Baronet,
and
the
company
continued
its
activities.
In
Smythe,
supra,
the
transactions
were
artificial
and
their
sole
aim
was
to
distribute
the
undistributed
income
on
hand
to
the
shareholders.
In
the
case
at
bar,
on
the
other
hand,
appellant’s
objective
was
to
sell
his
business
at
a
price
that
suited
him,
and
the
aim
of
the
purchaser
was
to
obtain
a
thriving
and
ongoing
business
at
a
very
low
cost.
It
is
also
unnecessary
in
the
case
at
bar
to
express
any
opinion
as
to
the
scope
of
subsection
137(2),
since
in
my
view
appellant
benefits
from
the
exception
provided
for
in
subsection
137(3).
He
dealt
with
Baronet
in
good
faith
and
at
arm’s
length.
They
hardly
knew
each
other
before
the
deal
and
they
testified
freely.
So
far
as
Jobin
was
concerned,
he
concluded
the
sale,
not
in
accordance
with
some
other
transaction
or
to
discharge
some
obligation,
but
to
dispose
of
his
business
at
a
Suitable
price.
The
results
were
disastrous
for
him
and
this
disaster
is
definitely
not
subject
to
assessment.
The
appeal
is
accordingly
allowed,
the
assessment
of
the
Minister
is
vacated,
and
the
taxable
income
for
1962
is
the
net
income
reported
and
paid.
Respondent
is
ordered
to
pay
costs.