Dominion Bridge Co. Ltd. v. The Queen, 75 DTC 5150, [1975] CTC 263, aff'd 77 DTC 5367, [1977] CTC 554 (FCA)

The amounts paid by a wholly-owned Bermudan subsidiary ("Span") for purchases of steel were found to constitute the taxpayer's cost of that steel, rather than the higher price charged by Span to the taxpayer, because Span was a puppet of the taxpayer, and the business of the taxpayer accordingly included the activities or purported activities of Span. A vice-president of the taxpayer "controlled every step of the operations of Span from the purchase price to the selling price of off-shore steel" and in fact was permitted by the Articles of Association of Span to exercise the powers of its board.

The amounts paid by a wholly-owned Bermudan subsidiary ("Span") for purchases of steel were found to constitute the taxpayer's cost of that steel, rather than the higher price charged by Span to the taxpayer, because Span was a puppet of the taxpayer, and the business of the taxpayer accordingly included the activities or purported activities of Span. A vice-president of the taxpayer "controlled every step of the operations of Span from the purchase price to the selling price of off-shore steel" and in fact was permitted by the Articles of Association of Span to exercise the powers of its board. [CR: Tax Avoidance]

The amounts paid by a wholly-owned Bermudan subsidiary ("Span") for purchases of steel were found to constitute the taxpayer's cost of that steel, rather than the higher price charged by Span to the taxpayer, because Span was a puppet of the taxpayer, and the business of the taxpayer accordingly included the activities or purported activities of Span. A vice-president of the taxpayer "controlled every step of the operations of Span from the purchase price to the selling price of off-shore steel" and in fact was permitted by the Articles of Association of Span to exercise the powers of its board. [CR: Tax Avoidance]