[OFFICIAL ENGLISH TRANSLATION]
97-1541(IT)I
BETWEEN:
PORFIRIO VARGAS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on November 12, 1997, at
Montréal, Quebec, by
the Honourable Judge G. Tremblay
Appearances
For the
Appellant:
The Appellant himself
Counsel for the Respondent: Alain
Gareau
JUDGMENT
The
appeal from the assessment made under the Income Tax Act
for the 1995 taxation year is dismissed in accordance with the
attached Reasons for Judgment.
Signed at Québec, Quebec, this 5th day of January
1998.
J.T.C.C.
Translation certified true
on this 3rd day of June 2003.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 19980105
Docket: 97-1541(IT)I
BETWEEN:
PORFIRIO VARGAS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tremblay, J.T.C.C.
[1] This appeal was heard on November
12, 1997, at Montréal, Quebec.
Point at issue
[2] The issue as stated in the Notice
of Appeal and the Reply to the Notice of Appeal is whether the
amount of $15,317.38 indicated on the appellant's T4 for the 1995
taxation year as his income for that year was correctly
calculated by his employer, M. & M. Kitchen Service
Reg'd. According to the appellant, his income was only
$12,977.88. The respondent, at the appellant's request, audited
everything and arrived at the same figure as the employer.
Burden of proof
[3] The appellant has the burden of
showing that the respondent's assessment is incorrect. This
burden of proof results from a number of judicial decisions,
including that of the Supreme Court of Canada in Johnston v.
Minister of National Revenue.[1]
[4] In Johnston, the Supreme
Court held that the facts assumed by the respondent in support of
the assessments or reassessments are presumed to be true until
proven otherwise. In the case at bar, the facts assumed by the
respondent are set out in subparagraphs a. to c. of paragraph 5
of the Reply to the Notice of Appeal. This paragraph reads as
follows:
[TRANSLATION]
5. In
confirming the assessment of May 9, 1996, the Minister assumed,
inter alia, the following facts:
a. during the
year under appeal, the appellant was, among other things, an
employee of the employer;
b. in an
investigation into the employer's affairs by the source
deductions division, it was observed that the appellant's 1995 T4
had been correctly prepared by the employer;
c. on
September 10, 1996, the Minister advised the appellant that the
total amount of the cheques endorsed and cashed by the appellant
corresponded to the amount indicated on the T4 prepared by the
employer and that no change would be made.
Facts in evidence
[5] As Exhibit A-1, the appellant
tendered details regarding the cheques received from his
employer, as shown below:
|
|
1st
|
2nd
|
VACAT
|
CHQ. #
|
DATES
|
TOTAL
|
|
JAN.
|
728.00
|
|
|
3521
|
01-21-95
|
728.00
|
|
FEB.
MARCH
APRIL
MAY
JUNE
JULY
AUGUST
SEPT.
0CT.
NOV.
DEC.
|
643.50
637.00
539.50
578.50
526.50
* 731.50
520.00
520.00
650.00
520.00
520.00
|
598.00
572.00
565.50
598.00
731.50
√
572.00
585.00
572.00
520.00
√
|
√ 434.72
+ 114.66
|
3533-3947
3954
3963
3979
3992
4008
4053-4064-4037
4077
4088
4121
4147
4161
4175
4192
4207
4227
4242
4261
|
02-04-95
02-18-95
02-19-95
03-04-95
03-18-95
04-01-95
04-15-95
05-13-95
05-27-95
05-01-95
06-10-95
06-24-95
08-05-95
09-02-95
09-16-95
09-30-95
10-14-95
10-28-95
11-11-95
11-25-95
12-09-95
TOTAL
|
1,676.22
1,209.00
1,105.00
1,291.16
1,258.00
731.50
1,092.00
1,105.00
1,222.00
1,040.00
520.00
$12,977.88
|
* LOST
STUB
GROSS
TOTAL
$12,977.88
+
BONUS
TOTAL IN DEC.
$15,317.38
√
NOT
WORKED
DIFF.
$ 2,339.50
[6] Yves Charette, an auditor
with Revenue Canada, showed the following cheques, based on his
audit, as taken from Exhibit I-1:
|
PERIOD
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
AUGUST
SEPTEMBER
OCTOBER
NOVEMBER
DECEMBER
|
WK ENDING
01/07/95
01/21/95
02/04/95
02/18/95
02/19/95
03/04/95
03/18/95
04/01/95
04/15/95
04/29/95
05/01/95
05/13/95
05/27/95
06/10/95
06/24/95
07/08/95
08/05/95
08/19/95
09/02/95
09/16/95
09/30/95
10/14/95
10/28/95
11/11/95
11/25/95
12/09/95
12/23/95
|
NUMBER
3509 *
3521
3533
3947
3954
3963
3874 *
3992
4008
4024 *
4037
4053
4064
4077
4088
4098 *
4121
4134 *
4147
4161
4175
4192
4207
4227
4242
4261
4278
|
GROSS AMOUNT
875.50
728.00
643.50
598.00
434.72
637.00
572.00
539.50
565.50
552.50
114.66
578.50
598.00
526.50
731.50
590.00
520.00
468.00
572.00
520.00
585.00
650.00
572.00
520.00
520.00
520.00
585.00
|
[7] It is apparent that the cheques
marked with an asterisk, five of which (not including cheque no.
4098 of July 8) totalled $3,053, were not included on the
appellant's list (Exhibit A-1).
|
|
END OF PERIOD
|
NUMBER
|
|
875.50
572.00
552.50
468.00
585.00
3,053.00
|
01/07/95
03/18/95
04/29/95
08/09/95
12/23/95
|
3509
3874
4024
4134
4278
|
The amount of $3,053 added to $12,977.88 gives $16,030.88. The
employer issued a T4 showing an amount of $15,317.38. The
appellant apparently received $713.50 too much. Moreover, if the
bonus of $114.66, which appears for June on
Exhibit A-1, is added, the appellant would appear to
have received an amount of $828.16 ($713.50 + $114.66)
in addition to that indicated on the T4 that was issued.
[8] Furthermore, according to the
appellant, he did not work at the beginning of January 1995, nor
for two weeks in July, nor at the end of December 1995. Cheque
no. 3059 in the substantial amount of $875.50, issued in
early January for the week ending on January 7, no doubt includes
income from a period in December 1994. Since it was received in
1995, the amount is taxable in that year. Moreover, the last
cheque in December 1995 is for the period ending on December 23.
The salary for the last week must have been taxed in 1996. As for
the statement that he did not work for a couple of weeks in July,
this is confirmed by cheque no. 4088, which is the only one
issued in July. As for cheques nos. 3874, 4024 and 4134, the
appellant could provide no explanation concerning them.
The best evidence
[9] With respect to the respondent's
evidence, the Court notes that the auditor, who had access to the
cheques at the employer's place of business and there observed
the endorsements on the back, did not bring those cheques with
him or at least make photocopies thereof. That would have been
the best evidence, because the respondent is also subject to the
best evidence rule. In a recent case (Simard,
96-3554(IT)I), this Court refused the respondent's
evidence. The testimony of one or two witnesses who have seen a
person's signature on the back of a cheque cannot have the same
value as the cheque itself or at least a photocopy of it. When
such is shown to a litigant, it constitutes evidence of which the
Court may also take notice. It is true that in Simard
there was reason to doubt the employer's honesty, which does not
seem to be the case here.
[10] In any event, out of a simple concern
for presenting the best evidence, an investigator who takes the
trouble to go somewhere for the purposes of an audit, the results
of which might possibly be presented before a court, should act
with that in mind.
[11] Furthermore, in the instant case, if
front and back photocopies of the cheques had been made and sent
or shown to the appellant following the notice of objection,
there would probably have been no appeal. This would have avoided
a loss of time greater than the time it would have taken to
photocopy the cheques front and back and would have meant far
less time lost for the Court, the witnesses and counsel.
Conclusion
[12] The appeal is dismissed.
Signed at Québec, Quebec, this 5th day of January
1998.
J.T.C.C.
Translation certified true
on this 3rd day of June 2003.
Erich Klein, Revisor
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