Before finding that bonuses or discounts received by the taxpayer (a dentist), on on a large portfolio of risky first mortgages acquired by him as his principal source of income and held by him until maturity, constituted business profits when received, Noël J. stated (p. 1354):
"With regard to respondent's contention that appellant's bonuses or discounts here should be regarded as interest and taxable therefore under s. 6(b) of the [pre-1972] Act, I cannot agree. Indeed, it is now settled (cf. Lomax v. Peter Dickson...) that where a loan is made at or above a reasonable commercial rate of interest as is applicable to a reasonable sound security, there is no presumption that a 'discount' at which the loan is made or a premium at which it is payable is in the nature of interest.
Now the interest rate in the present instance...is far above the conventional rate to a point where one can say in determining the true nature of these discounts by looking at all the relevant circumstances such as the term of the loan, the rate of interest, the nature of the capital risk, the extent to which, if at all, the parties expressly took, or may reasonably be supposed to have taken the capital risk into account in fixing the terms of the mortgage, that such discounts are not in the nature of interest...."