AgraCity – Tax Court of Canada finds that the Minister could not plead for a s. 247(2)(c) transfer pricing adjustment if she also pleaded that the offshore affiliate was an empty shell

The taxpayer apparently shifted most or all of its profits to a Barbados company.  The Minister pleaded that the Barbados company did nothing and that the transactions between it and the taxpayer were not on arm’s length terms.  C Miller struck the second pleading as it was logically inconsistent with the first, so that allegations relevant to the application of s. 247(a) and (c) were removed from the Minister’s Reply.  However, he did not strike the Minister’s pleadings directed at ss. 247(2)(b) and (d), as these are much broader provisions.

Neal Armstrong.  Summaries of AgraCity Ltd. v. The Queen, Docket: 2014-1537(IT)G under s. 247(2) and s. 163(2).