Citation: 2007TCC12
Date: 20070131
Docket: 2005-4095(IT)I
BETWEEN:
MARIAN J. ROPER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
O'Connor, J.
[1] This appeal heard in Nanaimo, British Columbia relates
to the disallowance by the Minister of National Revenue ("Minister") in
the 2001, 2002 and 2003 taxation years of certain alleged business expenses of
the Appellant.
[2] At the outset counsel
for the Respondent stated that the reassessment for the 2003 taxation year was
a nil assessment and consequently sought an Order quashing the appeal for that
year pointing out that it is well established by judgments of the Federal Court
of Appeal that there can be no appeal from a nil assessment. The Minister had
advised the Appellant of this fact and instructed the Appellant to request a loss
determination for the 2003 taxation year, to which she could object. The
Appellant did not request a loss determination but E.R. Heese, B.Comm.,
Accounting/Tax Services Ltd., acting for the Appellant indicated that he had
been advised by the Minister's office that the Appellant could raise the 2003
taxation year after a decision had been made in this appeal with respect to the
2001 and 2002 taxation years. I make no comment on that position and trust that
Mr. Heese will take that issue up further with the Minister at a later date. It
is to be noted that although the Minister seeks to quash the appeal for 2003
the Reply analyzes the expenses allowed and disallowed in 2003.
[3] In any event the
ruling that there can be no appeal from a nil assessment is engraved in stone
and consequently the appeal for the 2003 taxation year is quashed.
[4] As a further
preliminary matter I note that apparently through no one's fault, the audit
that was carried out prior to this appeal was less than perfect, arising mainly
from the fact that the Appellant was suffering severely from cancer at relevant
times when being asked to provide various information and documentation and
further by the fact that eventually the auditor acting for the Minister, after
issuing the final reassessments and commentary left the Minister's department
and was not available at the hearing of this appeal. Consequently, her evidence
at the hearing of the appeal was unavailable.
[5] The following sets
forth the three Schedules "A" annexed to the Reply to the Notice of
Appeal which explain the expenses that the Minister allowed and disallowed.
Marian J. Roper v. Her Majesty the Queen
Tax Court of Canada Appeal #2005-4095(IT)I
Summary of disallowed business expenses and
adjustments for 2001, 2002 and 2003.
|
2001
|
Initial
Assessment
May13/02
|
Audit
Reassessment
Nov. 29/04
|
Disallowed
|
|
|
|
|
|
|
Gross business income
|
$ 54,710
|
$ 54,710
|
|
|
|
|
|
|
|
Less: Cost of goods sold
|
|
|
|
|
|
- purchases $ n/a
- direct wage n/a
$ n/a
|
n/a
|
n/a
|
|
|
Gross pofit
|
$ 54,710
|
$ 54,710
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Advertising
|
n/a
|
n/a
|
|
|
Fees, licenses, dues
|
165
|
165
|
|
|
Delivery, freight
|
n/a
|
n/a
|
|
|
Insurance
|
n/a
|
n/a
|
|
|
Interest
|
1,266
|
1,266
|
|
|
Maint. & repairs
|
3,760
|
3,760
|
|
|
Meals & entertain.
|
788
|
788
|
|
|
Motor vehicle
|
8,330
|
8,330
|
|
|
Office expenses
|
8,364
|
8,364
|
|
|
Legal, acctg, professional fees
|
1,752
|
1,752
|
|
|
Travel
|
6,846
|
6,846
|
|
|
Rent
|
4,976
|
4,976
|
|
|
Telephone/utilities
|
2,475
|
2,475
|
|
|
Other expenses (training)
|
34,535
|
3,356
|
31,179
|
|
Capital cost allowance
|
1,580
|
1,580
|
|
|
Total expenses
|
$ 74,837
|
$ 43,658
|
|
|
|
|
|
|
|
Net business income (loss)*
|
$(20,131)
|
$ 11,047
|
|
|
|
|
|
|
Note: * Due to
rounding, there is a minor difference in the mathematical result.
Marian J. Roper v. Her Majesty the Queen
Tax Court of Canada Appeal #2005-4095(IT)I
Summary of disallowed business expenses and
adjustments for 2001, 2002 and 2003.
|
2002
|
Initial
Assmt
Apr 07/03
|
Reassmt.
June 01/04
|
Audit
Reassmt
Nov. 29/04
|
Disallowed
|
|
|
|
|
|
|
|
Gross business income
|
$ 29,741
|
Unchanged
|
$ 29,741
|
|
|
|
|
|
|
|
|
Less: Cost of goods sold
|
|
|
|
|
|
|
- purchases $ n/a
- direct wage n/a
$ n/a
|
n/a
|
|
n/a
|
|
|
Gross pofit
|
$ 29,741
|
Unchanged
|
$ 29,741
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Advertising
|
1,691
|
|
1,691
|
|
|
Fees, licenses, dues
|
256
|
|
256
|
|
|
Delivery, freight
|
n/a
|
|
n/a
|
|
|
Insurance
|
n/a
|
|
n/a
|
|
|
Interest
|
3,256
|
|
1,628
|
1,628
|
|
Maint. & repairs
|
n/a
|
|
n/a
|
|
|
Meals & entertain.
|
n/a
|
|
n/a
|
|
|
Motor vehicle
|
5,092
|
|
1,414
|
3,678
|
|
Office expenses
|
1,191
|
|
1,191
|
|
|
Legal, acctg, professional fees
|
858
|
|
858
|
|
|
Travel
|
5,790
|
|
|
5,790
|
|
Rent
|
2,000
|
|
2,000
|
|
|
Salaries, wages
|
568
|
|
568
|
|
|
Telephone/utilities
|
2,788
|
|
2,788
|
|
|
Other expenses (training)
|
5,241
|
|
|
5,241
|
|
Capital cost allowance
|
1,620
|
|
1,620
|
|
|
Total expenses
|
$ 30,351
|
Unchanged
|
$ 14,014
|
|
|
|
|
|
|
|
|
Net business income (loss)*
|
$( 616)
|
Unchanged
|
$ 15,720
|
|
|
Non-capital loss carryback from
2003 and applied against income for 2002
|
|
$ 12,344
|
$ 4,822
|
|
|
|
|
|
|
|
Note: * Due to
rounding, there is a minor difference in the mathematical result.
Marian J. Roper v. Her Majesty the Queen
Tax Court of Canada Appeal #2005-4095(IT)I
Summary of disallowed business expenses and
adjustments for 2001, 2002 and 2003.
|
2003
|
Initial
Assessment
May 20/04
|
Audit
Reassessment
Nov. 29/04
|
Disallowed
|
|
|
|
|
|
|
Gross business income
|
$ 27,504
|
$ 27,504
|
|
|
|
|
|
|
|
Less: Cost of goods sold
|
|
|
|
|
|
- purchases $4,037
- direct wage 350
$4,387
|
4,387
|
4,387
|
|
|
Gross pofit
|
$ 23,117
|
$ 23,117
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Advertising
|
3,410
|
3,410
|
|
|
Fees, licenses, dues
|
954
|
954
|
|
|
Delivery, freight
|
435
|
435
|
|
|
Insurance
|
59
|
59
|
|
|
Interest
|
7,809
|
3,905
|
3,904
|
|
Maint. & repairs
|
1,735
|
1,735
|
|
|
Meals & entertain.
|
558
|
558
|
|
|
Motor vehicle
|
3,629
|
2,887
|
742
|
|
Office expenses
|
3,027
|
3,027
|
|
|
Legal, acctg, professional fees
|
3,964
|
3,964
|
|
|
Travel
|
4,205
|
2,437
|
1,768
|
|
Telephone/utilities
|
2,027
|
2,027
|
|
|
Other expenses (training)
|
2,637
|
|
2,637
|
|
Capital cost allowance
|
2,694
|
2,694
|
|
|
Total expenses
|
$ 37,144
|
$ 28,092
|
|
|
|
|
|
|
|
Net business income (loss)*
|
$(14,031)
|
$( 4,981)
|
|
|
|
|
|
|
Note: * Due to
rounding, there is a minor difference in the mathematical result.
[6] It is obvious that
the Minister has accepted many of the expenses claimed by the Appellant. The
Minister's explanation of the amounts disallowed are set forth in the
Minister's assumptions contained in paragraph 13 of the Reply and all of the
subparagraphs thereof which provide as follows:
13. In reassessing the Appellant for the 2001 through 2003
taxation years, and in confirming the 2001 and 2002 taxation years the Minister
assumed the same facts as follows:
a) at all material times, the Appellant
operated a business providing personal care and alternative therapies (the
"Business Activity");
Training expenses
b) in 2001 the Appellant began studies in
investing in real estate through courses made available by the Whitney
Education Group, Inc. ("Whitney");
c) courses provided by Whitney were held across
Canada, the United States, and further abroad;
d) the Appellant took the training for the
purposes of having retirement income through passive income sources;
e) the Appellant purchased a numbered company through
Whitney, 390802 Canada Inc., for investing in real estate;
f) 390802 Canada Inc. is inactive;
g) the Appellant's studies in real estate
investing are unrelated to the Business Activity;
h) the amount of course fees incurred by the
Appellant to attend Whitney is unknown;
i) the Appellant did not commence a business
investing in real estate;
j) during all material times, the Appellant
did not earn any revenue from real estate studying with Whitney;
k) expenditures incurred to travel to and attend
courses provided by Whitney were personal expenses of the Appellant and not
incurred for the purpose of earning income from a business or property;
l) Peak Potentials Training courses are
motivational training courses geared toward personal wealth, life direction and
personal fulfillment;
m) the amount of course fees incurred by the
Appellant to attend Peak Potentials Training is unknown;
n) the Appellant's studies at Peak Potentials
Training were unrelated to the Business Activity;
o) expenditures incurred to travel to and
attend courses provided by Peak Potentials Training were personal expenses of
the Appellant and not incurred for the purpose of earning income from a
business or property;
p) $3,356.36 of $ 34,535.25 claimed as training
expenses for the 2001 taxation year were incurred for the purpose of earning
income from the Business Activity;
q) expenditures claimed by the Appellant as
training expenses for the 2002 and 2003 taxation years totaling $5,241.65 and
$2,637.33, respectively, were not incurred for the purpose of earning income
from a business or property;
Travel Expenses
r) travel expenses claimed by the Appellant in
the 2002 taxation year in the amount of $5,790.78 were not incurred for the
purpose of earning income from business or property;
s) $2,437.23 of the $4,205.19 travel expenses
claimed by the Appellant in the 2003 taxation year were incurred for the
purpose of earning income from the Business Activity;
t) travel expenses relating to the Appellant's
involvement with network marketing in 2003 were not incurred for the purpose of
earning income from a business or property;
Motor vehicle Expenses
u) the Appellant did not provide proper books
and records detailing the business use versus personal use of her vehicle;
v) in 2003, 25% of the use of the Appellant's
vehicle was in respect of the Business Activity;
w) motor vehicle expenditures in excess of
$1,414.57 for the 2002 taxation year were not incurred for the purpose of
earning income from a business or property;
x) in 2003, the Appellant drove 8,248
kilometres to provide therapy sessions respecting the Business Activity;
y) motor vehicle expenditures in excess of
$2,886.88 for the 2003 taxation year were not incurred for the purposes of
earning income from a business or property;
Interest Expense
z) interest expenses claimed by the Appellant
for taxation years 2002 and 2003 were in respect of bank charges and credit
card interest; and
aa) not more than $1,628.28 and $3,904.89,
representing one-half of the interest claimed by the Appellant for the 2002 and
2003 taxation years, respectively, were incurred for the purpose of earning
income from a business or property.
[7] As further stated in
the Reply the issues to be decided are set forth in paragraph 14 thereof as
follows:
a) whether the Appellant's appeal for the
2003 taxation year is valid; and
b) whether the Minister properly disallowed
business expenses claimed by the Appellant respecting the Business Activity for
the 2001, 2002 and 2003 taxation years.
[8] It was established that
the Appellant was well educated having attained the following degrees, namely,
Registered Nurse, Bachelor of Science and Masters in Communication Studies. She
worked very hard and her testimony was credible.
[9] The Appellant considerably
minimized the impact of the assumptions of the Minister contained in the Reply.
Without reviewing all of her testimony it will be helpful to quote extracts from
her letter of October 25, 2004 to the auditor acting for the Minister in this
matter. This is Exhibit R-3 and may be summarized as follows:
As to the 50/50 allocation
of interest, the Appellant stated that in 2002 and 2003 a more reasonable
allocation was 70% business / 30% personal.
The Appellant attempted to
justify her training and related expenses:
To have a modicum of understanding of the
scope of my endeavours you must incorporate all my credentials. In 1990 I
completed a Master degree in Communication (MCS) Studies at the University of Calgary. This degree is only tangentially related
to my Holistic Health Care practice yet provides a rich background and
foundation for my continuing ventures.
...
The comments and decisions declared in
the reassessment clearly take a myopic view that I am only functioning as a
1–skill healthcare therapist, whereas I have been steadily developing business
skills and qualifications since I chose to leave my salaried nursing position
in the late 1980's and early 1990's. The Master's Degree is an indication of my
intention to expand my career. This was completed in 1990 and includes varied
applied skills and qualifications. My MCS degree was academic in nature with
the addition of applied experiences. In addition, I was employed as a student
assistant by professors for their research and private work to pay for my
education. The course and work content of the MCS experience clearly show that
the Whitney Education Group (see B1-6) and Peak Potentials (B7-10) trainings
were taken merely to "maintain, update or upgrade already existing skills
or qualifications with respect to my business or profession" (reference
Interpretation Bulletin IT-357R2).
...
Clearly both Peak Potentials and Whitney
training were related at many varied levels and provided me with current
practical applications to help me augment and grow my MCS foundation.
... the disallowance of the Whitney
Training is also limited and erroneous. It was: (1) not real estate training in
context you imply; (2) a capital expenditure connected to a numbered
corporation purchased as part of the package. The corporation was an optional
purchase offered there as asset protection relevant to 2001 (remember my basis
came from late 80's early 90's). Further I never activated this corporation.
It's defunct!
...
I clearly have well established skills
and qualifications that I am endeavouring to turn into revenue, in my
entrepreneurship. I also clearly require exposure to current trends, markets
and perspectives to augment my educational and professional foundation in the
MCS degree. I obtained this in the Whitney and Peak Potentials training. I
incurred travel and motor vehicle expenses doing so clearly you can see that if
I worked more than 40 hours weekly as a Hands-On Therapist and additionally
participated in these and other training I was a workaholic and worked 100% of
my time.
...
Once again, how could you possibly judge
that these courses (Whitney and Peak Potentials) were not related to my
existing skills, qualifications, business and professions ...
...
I continued to augment my holistic health
care business as well. Most notably, Consegrity (D1 and 2 illustrate what this
is and my brochure). During 2001, I not only attended 2 Consegrity Training
sessions (St. George, Utah and Witchita, Kansas). I was
instrumental in bringing this work to Canada by
single-handedly organizing 2 conferences. ...
I became the Canadian coordinator for
Consegrity and the 1st Certified Consegritist in Canada (see D5-8). Training, motor vehicle and travel expenditures were clearly
a large part of this endeavour. I travelled alone between Alberta and BC promoting & demonstrating this work.
This endeavour boasted my own personal
hand-on practice as I was featured on local radio & T.V. stations. My
marketing, coordinating and speaking skills, 1st learned at University of
Calgary, then enhanced through Whitney Education Group information worked well
(see D5-8).
...
I turned to consulting, health care
presentations and building skills I learned through the Peak Potentials courses
during the remainder of 2002. I found that Peak Potentials exposed me to
Network Marketing as a form of passive income development (a concept introduced
at the U of Calgary) and I met many contacts who became distributors, resources
& support when I worked in Network Marketing for Brain Garden.
...
Further ... you
will note I was clearly seeking new business ventures for my sole
proprietorship entrepreneurial business by adding this part time endeavour. My
intention was to become more and more involved in related skills for my Master's
Degree background with this endeavour. Peak Potential training, my Master's
Degree work, my Holistic Health Care practice are all interrelated,
well-defined and established credentials I had developed from the late 80's
(indeed, my whole professional working life) meant I could write an appropriate
resume for this work. As this was to be a part time job, it is clear that it
was one more attempt at adding to my entrepreneurial base of business
endeavours.
As noted in
Interpretation Bulletin IT-357R2, cost incurred ... to enable a professional to
learn this latest methods of carrying on her profession are allowable for a
self-employed individual to continue to be viable and earn income, it is
critical to have the leeway to choose which endeavours will support this endeavour.
I only took training I was previously qualified to understand through my
foundation built during my Masters Degree work.
...
Note 2 also
references the lack of a log as being reason for disallowance of automobile
expenses. I submitted my annual daytimers and computer disk. My records may not
appear as a “log” that you prefer yet this is my log and my record. They are
complete and extensive and I am able to access any given day and indicate Km
totals, the business and personal breakdown from my activities recorded. My
business percentage of vehicle use was derived this way. It is clear from the
Income Tax Circular you sent me that daytimers (see GI-7) records do indeed fit
within the accepted definition of “record”. Also, I understand mileage is calculated
@ 42¢ / Km regular. It is absolutely valid to say I worked 90% of the time. I
am a recovering workaholic and my health (present) status is the best
verification of this I can submit. I learned the hard way in 2003 and am still
paying the price as I attempt to recover from cancer and total collapse from
stress and overwork.
...
I believe this
reassessment is incomplete and lacks comprehensive awareness of what an
entrepreneur such as me actually does working at generating revenue. I have a
lifelong passion for learning that I have consistently applied to generate
revenue in my work environment. This has meant a life of little else than work
and fairly created expenses. I believe Revenue Canada must judge me in the
category of worker that I fit – an entrepreneur and self-employed business
person – and not attempt to keep me in the box of health care professional I
have been trying to expend for years. ...
Thank you.
[10] The principal
submissions of counsel for the Minister are contained in his formal argument.
Extracts from the transcript reads as follows:
M. MAHIL:
...
The issue in this appeal, in the Respondent’s submission, is whether
the Appellant is entitled to deduct additional business expenses in excess of
the amount allowed by the Minister. ...
The Respondent’s submission is that the Appellant is not entitled to
deduct any additional amounts in 2001 or 2002. The Respondent submits that
these amounts were either unvouched or were personal and living expenses of the
Appellant.
The Respondent submits that the Appellant did not discharge her onus of
establishing that these disallowed amounts were incurred for business purposes.
I have included legislation. I believe the court is familiar with the Section
18, paragraph 1(a) and 1(h) dealing with the limitations on expenses. Paragraph
(a) is a limitation on expenses made just to the extent that they are made or
incurred to earn income from business for property. Paragraph (h) excludes any
expenses that are personal or living expenses of the taxpayer.
I have also included at Tab G of my book of authorities Section 230.1
of the requirement for a taxpayer to keep adequate books and records in such
form and containing such information to enable taxes to be deducted -- to allow
taxes to be determined.
...
At Tab 4, a leading case in Njenga from the Federal Court of Appeal
about business expenses and deductions. I have highlighted paragraph 3,
The income
tax system is based on self-monitoring as a public policy matter the burden of
proof of deductions and claims properly rests with the taxpayer. The Court
states that the Appellant must maintain and have detailed information available
to support the claims that they make. (Counsel
referred to several cases).
It is the Respondent’s submission that -- I will go through each
category of expense now briefly. The training expense, there are two amounts.
One for the year 2001, one for the year 2002, one for 2001 appears to relate to
the course by Whitney Education Group. This is training for real estate
investing. (Counsel discussed this issue).
...
With respect to the 2002 training the Peak Potentials, it is also the
Respondent’s submission that this training is also capital in nature and that
the courses outlined, in evidence and in the document submitted, indicate
personal wealth and motivation themes. These courses were to educate and
inspire people.
In the
Respondent submission with these courses do not specifically apply to the
Appellant's current business interests at the time. And again, this training
also has lasting benefit to the Appellant and therefore, is a capital asset and
again not a current deductible expense.
Accordingly, the Respondent submits that these expenses were not
incurred to earn income from business or property. The travel expenses also
related, in my understanding, to these courses that are claimed and to that
extent the Respondent submits that these expenses -- the travel expenses that
is -- were not incurred for the purpose of earning income from a business or
property.
...
I have included at Tab 12 the training, the IT bulletin dealing with
training expenses. I have highlighted a portion in the summary at page 1 of
this bulletin. The bulletin states,
The training
costs are not deductible as current expenses if they are capital expenditures.
They are considered to be capital in nature when the training results in the
lasting benefit to the taxpayer, i.e., where a new skill or qualification is
required. Where on the other hand this training is taken merely to maintain, update
or upgrade already existing skill or qualification and related costs are not
considered to be capital in nature.
...
In Cormier and this is another decision of the Tax Court,
Justice Lamar, and I highlighted paragraph 15. I would like to refer to that.
The first sentence of that paragraph,
Education
expenses are deductible as business expenses in computing the Appellant's
income under section 9.1 of the Act. If the deduction is consistent with
ordinary business principles are well recognized principles of normal business
practice.
Then,
at paragraph 20 the Court states that,
In order to
be deductible as business expenses education expenses must have been incurred
by the Appellant for the purpose of gaining or producing income from the
business.
At paragraph 22 the existence of a business-related purpose within the
meaning of Section 18(1)(a) is a question to be decided taking all of the
circumstances into account in light of the various factors.
The Court states at paragraph 23 that the question that should be
answered in other words is: does the expense fill a need of the business or a
need of the taxpayer. And in this case it is the Respondent’s submission this
fills a need of the taxpayer and not a need of the actual business that was
being pursued at the time. Accordingly then, it is a capital expense not a
current expense.
I have also included at tab 9 the decision in Neville. I’ve highlighted
portions of page 5 and page 6.
And again, at page 5 at the bottom the court refers to IT bulletin 357.
In the last portion of the statement there I can think of no more apt
distinction between capital and current then that made in the bulletin for the
guidance of taxpayers. And the distinction there is quoted as follows on to the
next page.
...
Again, the Respondent submits that in the case at bar that has an
application. In the case at bar the Appellant’s business was more of a holistic
healthcare business, there was no real estate business per se being conducted.
The fact that she wanted to acquire skills in respect of real estate investing
is not a current expense.
...
In the Respondent’s submission the Appellant has not established that
the real estate training or personal growth training were required of her or
that they would relate to business that she was providing. Accordingly, we
submit that it is a capital expense.
In terms of the motor vehicle expenses, the Appellant claims motor
vehicle expenses in respect of her vehicle. She claims -- it appears she
claimed 90 percent business use of her vehicle. In the Respondent’s submission,
she has not demonstrated such high business use. She has agreed to having used
that same vehicle for personal activities and the apportionment of the personal
and the business travel is not clearly identifiable in the Respondent’s
submission. There is no adequate mileage log that would establish the amount
used for business, and the amount used for personal. In the Respondent’s
submission, the exhibit R-6 being the calendar is not sufficient for those
purposes and the Minister’s decision was reasonable.
...
At paragraph 20 at Tab 6 on page 6 of the decision (Dore) the Court
states, and I have highlighted this portion,
Business
people who use personal vehicle for business need to keep accurate logs of
their mileage actually driven if they expect to be entitled to deduct all the
costs of operating those vehicles for business purposes. Estimates made at year
end by subtracting an amount estimated to be their personal use from the annual
total mileage driven are only that, estimates. They generally attempt to be
generous to the estimator.
The Respondent’s submission is well known that an automobile log is a
necessity for claiming such expenses. In the Respondent’s submission, the
Appellant’s estimate of 90 percent business use of her vehicle was indeed
overly generous. It has not been shown that the car was only used 10 percent of
the time for personal purposes. It is reasonable that the Appellant would have
used the car for everyday errands, grocery shopping, personal banking,
appointments, visiting friends or family and she did allude to the fact that
she did travel to Alberta also in part to visit family.
Given the lack of documentation to substantiate these claims we submit
that the Minister's decision is reasonable.
With respect to the interest and bank charges the Appellant has claimed
100 percent of these expenses. The Respondent submits that the Minister’s
decision to allow 50 percent is reasonable in the circumstances.
The Appellant agrees that these expenses relate both to business and
personal items. She has given evidence that she lived off her credit cards
during that period of time.
The Appellant agreed with the auditor to a 50 percent amount, however
in her letter that was marked as exhibit R-3 she later suggested a different
allocation, 70 percent business and 30 percent personal. In the Respondent’s
submission is that the Minister's original amount, 50 percent, is the
reasonable amount in these circumstances.
The interest expense, again primarily relates to training and
associated expenses that, in the Minister’s submission, are not allowable as
business expenses in any event.
I have explained the onus on the Appellant already. The Respondent
submits, as in other business expense cases, that the provisions of the Act are
clear and unambiguous that the Act requires strict interpretation and that in
this case the Appellant has not established that any additional amount should
be allowed in excess of that allowed by the Minister. The Respondent request that
the Court dismisses this appeal for the 2001 in 2002 years and quash the appeal
for the 2003 taxation year.
[11] With respect to the
2003 taxation year, the appeal as mentioned is quashed. However, as explained
earlier, the Appellant's representative may address this matter further with
the Minister.
[12] In conclusion, the
appeal for the 2003 taxation year is quashed. The appeals for the 2001 and 2002
taxation years are allowed to the extent and on the basis of these Reasons for
Judgment and as detailed in the actual Judgment in these appeals.
Signed at Ottawa, Canada, this 31st day of January, 2007.
"T. O'Connor"
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