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Citation: 2005TCC355
Date: 20050526
Docket: 2004-4097(IT)I
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BETWEEN:
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SYED MANSOOR ALI
NAQVI,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
(delivered orally from the Bench at
Toronto,
Ontario, on April 12, 2005)
[1] This appeal
pursuant to the Informal Procedure was heard at Toronto, Ontario on April 11, 2005. The Appellant
testified. The Respondent called Noory Ali, the owner and operator of
North American Foreign Exchange and Navjit Bolina, the Appeals Officer on the
file.
[2] At the outset, the
Respondent acknowledged the Appellant may deduct from the income assessed, the
sum of $6,425 paid by the Appellant on account of a business loan in the
taxation year and this matter is referred to the Minister of National Revenue
for reconsideration and reassessment accordingly.
[3] With respect to the
remaining sum of a further $21,289 assessed as income for 2000 which remains in
dispute, the particulars are set out in paragraphs 7 to 13 of the Reply to the
Notice of Appeal. They read:
7. In computing
income for the 2000 taxation year, the Appellant reported employment income in
the amount of $15,000 to reflect the T-4 slip from Mansoor Brothers Enterprises
in the amount of $8,000 and the T-4 slip from 1226507 Ontario Inc. in the
amount of $7,000.
8. The
Appellant was initially assessed for the 2000 taxation year as filed. The
Notice of Assessment is dated July 23, 2001.
9. The
Appellant was reassessed for the 2000 taxation year. In the Notice of
Reassessment dated September 22, 2003, the Minister of National Revenue (the “Minister”)
increased the Appellant’s employment income by the amount of $27,714 with
applicable interest and late filing penalties.
10. The Appellant
objected to the reassessment dated September 22, 2003 by Notice of Objection,
dated September
20, 2003
and received on October 31, 2003.
11. The Minister
confirmed the reassessment. The Notification of Confirmation is dated September 7, 2004.
12. In
reassessing tax for the 2000 taxation year, the Minister assumed the following
of facts:
a) the
Appellant’s return of income for the 2000 taxation year (the “Return”) was
required to be filed with the Minister on or before April 30, 2001;
b) the
Appellant failed to file the Return as and when required by the Act;
c) the
Appellant’s return was filed on June 18, 2001;
d) at
all material times, the Appellant held 100% ownership of two franchises known
as Mansoor Brothers Enterprises and 1226507 Ontario Inc. purpose of such
franchises were selling coffee, donuts, muffins, etc.;
e) for
the 2000 taxation year, the Appellant was supporting three people, the
Appellant, his spouse and one child (one years of age);
f) in
reporting income for the taxation year at issue the Appellant did not include
all of the income received in the said taxation year;
g) during
the 2000 taxation year, the Appellant understated his income by the amount of
$27,714, inclusive of:
(i) $19,468,
determined through the source and application of funds, as outlined in
paragraph 3 above;
(ii) $845,
funds or property conferred on the Appellant in his capacity as a shareholder
of Mansoor Bros Inc.;
(iii) $7,401,
funds or property conferred on the Appellant in his capacity as a shareholder
of 1226507 Ontario Inc.
B. ISSUES TO
BE DECIDED
13. The issue is
whether the Minister has properly included the additional income in the amount
of $27,714 in Appellant’s income in the 2000 taxation year.
[4] Based upon
credibility, the Appellant failed to refute the assumptions remaining in
question insofar as the $21,289 is concerned.
[5] Noory Ali did not
supply any concurrent documents, whether money transfer documents, or business
account ledgers or similar documents which confirmed his oral testimony. Such
documents are normal business records when dealing with sums of money. The
documents Mr. Ali supplied were completed by him long after the alleged events
and after urging by the Appellant.
[6] Mr. Naqvi gave
general conflicting accounts of his receipts of funds over the periods of his
dealings with CRA. They include:
1. Having
Ms. Forrest, his accounting representative tell CRA that the Appellant received
$21,700 in Canada from visiting relatives while they were in Canada.
2. Mr.
Naqvi telling the Appeals Officer that he received different identified sums.
3. Finally
identifying a third set of sums in his Royal Bank statements which Mr. Naqvi
had Mr. Ali confirm in the manner described.
[7] The result is that
Mr. Naqvi presented three versions, which fail to correspond to each other,
each of which lack the confirming bank transfer or business record
documentation which are to be expected in ordinary monetary transactions.
[8] For this reason the
portion of the appeal relating to the $21,289 remaining in dispute is denied.
Signed at Ottawa, Canada, this 26th day of May 2005.
Beaubier,
J.
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