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Citation: 2003TCC576
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Date: 20030814
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Docket: 2000-2261(IT)G
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BETWEEN:
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MUKHTIAR HANS,
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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
BOWIE J.
[1] Mr. Hans appeals from
reassessments under the Income Tax Act (the Act)
for the 1991, 1992, 1993, 1994 and 1995 taxation years. At the
relevant times, he was employed as a factory worker on a
full-time basis, and he also operated a driving school from his
house in Brampton, Ontario as a proprietorship under the name
United Drivers Training of Canada (the school) on a part-time
basis. The business had its fiscal year end on February 28 each
year. The reassessments under appeal are predicated on the
Minister's conclusion that the Appellant correctly stated his
revenues from the school, but substantially overstated his
expenses in each of the years under appeal. The adjustments made
by the Minister may be summarized as follows:
|
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1991
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1992
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1993
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1994
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1995
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Business expenses claimed
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$28,316
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$29,186
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$26,128
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$28,119
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$23,617
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Expenses disallowed
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16,813
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21,241
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20,959
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22,433
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18,738
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Total expenses allowed
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$11,503
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$7,945
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$5,169
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$5,686
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$4,879
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The Minister also assessed penalties under subsection 163(2)
of the Act for each year. It is not disputed that the
1991, 1992, 1993 and 1994 taxation years were statute-barred, and
the 1995 year was not. The issues before me therefore are:
1. Has the Minister discharged the
burden of proving that the Appellant made one or more
misrepresentations attributable to neglect, carelessness or
wilful default, in filing his returns for the 1991 to 1994
taxation years?[1]
2. If so, to what extent can the
disallowance of expenses by the Minister for each of those years
reasonably be regarded as relating to such misrepresentations?[2]
3. Has the Appellant satisfied the
burden of showing that the assumptions of fact on which the
Minister based his last reassessment for the 1995 year are
incorrect?
4. Has the Minister discharged the
burden of proving that the Appellant knowingly, or under
circumstances amounting to gross negligence, made a false
statement or omission in his returns for each of the taxation
years in issue,[3]
and of establishing that the penalties assessed were correctly
computed?[4]
taxation years 1991 to 1994
[2] The Minister's right to reassess
the statute-barred years in this case is governed by
subparagraphs 152(4)(a)(i) and 152(4.01)(a)(i).
152(4) The Minister may at any time make an assessment,
reassessment or additional assessment of tax for a taxation year,
interest or penalties, if any, payable under this Part by a
taxpayer or notify in writing any person by whom a return of
income for a taxation year has been filed that no tax is payable
for the year, except that an assessment, reassessment or
additional assessment may be made after the taxpayer's normal
reassessment period in respect of the year only if
(a) the
taxpayer or person filing the return
(i) has made
any misrepresentation that is attributable to neglect,
carelessness or wilful default or has committed any fraud in
filing the return or in supplying any information under this
Act, or
(ii) ...
152(4.01)
Notwithstanding subsections (4) and (5), an assessment,
reassessment or additional assessment to which paragraph
(4)(a) or (b) applies in respect of a taxpayer for
a taxation year may be made after the taxpayer's normal
reassessment period in respect of the year to the extent that,
but only to the extent that, it can reasonably be regarded as
relating to,
(a) where
paragraph (4)(a) applies to the assessment, reassessment
or additional assessment,
(i) any
misrepresentation made by the taxpayer or a person who filed the
taxpayer's return of income for the year that is attributable
to neglect, carelessness or wilful default or any fraud committed
by the taxpayer or that person in filing the return or supplying
any information under this Act, or
(ii) ...
[3] Counsel for the Appellant argued
that the Minister could not sustain his reopening of the
statute-barred years in this case because he had failed to plead
with any specificity the alleged misrepresentations on which he
relied, as Rule 49 requires. He relied upon Shaughnessy
v. The Queen[5]
and Gardner v. The Queen,[6] both cases in which this Court has recently
criticized the Deputy Attorney General's all too frequent
practice of not pleading the specific facts that he alleges and
intends to prove at trial, but simply a general failure to comply
with a provision of the Act, expressed only by a
recitation of the provision that he says was not complied with.
Subparagraphs 7(h) to (l) of the Reply to the Notice of Appeal in
the present case are perhaps as bad an example as I have seen of
this particular violation of the rules relating to pleading.
Subparagraphs 7(k) and (l) are particularly offensive. They are
the elements of the pleading that are supposed to aver the facts
that justify the reopening of the statute-barred years and the
imposition of the penalties, as to both of which the Respondent
has the burden of proof. They simply parrot the words of the
statutory provisions referred to in them, and are nothing more
than conclusions of mixed fact and law that the Deputy Attorney
General hopes that the Court might someday reach. Had the Reply
been attacked, as it was in Gardner, I would have made the
same Order that I made in that case. However, the fact that the
Appellant was entitled to have particular allegations of fact
pleaded in the Reply does not entitle him now to have the
Respondent's efforts to show misrepresentation as to the
statute-barred years, and gross negligence to justify the
penalties, foreclosed. Nevertheless, I take the view that in
attempting to justify reassessing the statute-barred years,
the Minister is confined to those misrepresentations that were
known to her and upon which she relied to justify making the
reassessments at the time they were made. She cannot reassess and
then later fish for reasons to justify having done so.
[4] The Minister reassessed the
Appellant for the taxation years 1991 to 1994 on August 18, 1998,
as a result of an audit performed by Mr. Peter Mutch. The
Appellant objected to those reassessments, and as a result he was
reassessed again for slightly lesser amounts on March 23, 2000.
It is these latter assessments that are now under appeal, and so
the reasons for reopening the 1991 to 1994 taxation years stated
by Mr. Mutch in his Audit Report dated May 6, 1998[7] and those stated by
Orest Bozyk, the Appeals Officer, in his Report on Objection
dated February 22, 2000[8] are relevant. These read as follows.
1. Opening
of Statute Barred Years
Subsection 152(4)(a) of the Income Tax Act
provides that a reassessment or assessment of tax, penalties and
interest may be made at any time, if the taxpayer or person
filing the return has made any misrepresentation that is
attributable to neglect, carelessness or wilful default or has
committed any fraud in filing the return or in supplying any
information.
During the initial audit review (audit period: 1994 and 1995
taxation years), it was found that the t/p did not maintain
proper books and records, and the majority of expenses claimed
could not be supported, or were personal in nature. Thus it was
the Department's contention that the t/p was neglectful and
careless in the filing of his income tax returns.[9]
Reason for opening prior years under Par
152(4)(a):
The expenses claimed by the taxpayer are grossly overstated.
It was found that the taxpayer did not maintain proper books and
records and the majority of expenses could not be supported and
were personal in nature. The taxpayer did not maintain any
journals, which could reconcile to the statements filed (log
books, appointments, General ledger, synoptic, etc.) and the
taxpayer has claimed over $120,000 in business losses over 6
calendar years. It appears that the taxpayer has made
misrepresentations in filing of his income tax returns through
neglect and/or carelessness.[10]
In summary, then, the Minister's reasons for reopening the
1991 to 1994 years amount to this: the taxpayer could not
establish the quantum of his expenses, and to some unspecified
extent the expenses that he claimed were personal and not
business related. This resulted from neglect or carelessness,
which included his failure to keep proper records. Certain detail
as to some items is added in the balance of the reports,
however.
[5] An examination of the Audit Report
shows that the expenses that Mr. Mutch concluded had been
overstated by Mr. Hans in his returns fall into eleven
categories. The table below shows for each of these the amount
that Mr. Hans claimed in each of the statute-barred years,
together with the amounts that were disallowed by Mr. Mutch in
making the August 1998 reassessments.
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Year
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1991
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1992
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1993
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1994
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Advertising
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Claimed
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$6,478
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$6,324
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$5,356
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$5,121
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Disallowed
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770
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5,884
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5,132
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4,712
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Automobile
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Claimed
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$12,432
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$13,123
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$11,862
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$13,972
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Disallowed
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9,474
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9,977
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9,674
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11,691
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Business Tax and Licences
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Claimed
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$200
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$250
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$250
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$300
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Disallowed
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(130)
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50
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-0-
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-0-
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Insurance
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Claimed
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$650
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$675
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$695
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$786
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Disallowed
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650
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675
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695
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786
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Interest
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Claimed
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$0
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$240
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$235
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$239
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Disallowed
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$0
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$240
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$235
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$239
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Maintenance and Repairs
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Claimed
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$725
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$675
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$642
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$650
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Disallowed
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725
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675
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642
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650
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Office in Home
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Claimed
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$2,661
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$2,603
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$1,970
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$1,776
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Disallowed
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889
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2,258
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664
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1,042
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Legal and Accounting
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Claimed
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$600
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$800
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$856
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$214
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Disallowed
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386
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386
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386
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-0-
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Telephone
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Claimed
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$1,150
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$1,198
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$1,063
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$989
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Disallowed
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1,096
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1,144
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1,009
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935
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Salaries and Wages
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Claimed
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$3,000
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$2,990
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$2,925
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$3,210
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Disallowed
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3,000
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2,990
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2,925
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3,210
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Capital Cost Allowance
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Claimed
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$420
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$307
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$274
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$220
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Disallowed
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420
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307
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274
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220
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[6] Mr. Mutch decided that many of the
expenses claimed were excessive simply because Mr. Hans was
unable to produce receipts to substantiate them. In some cases,
he seems to have felt intuitively that the amounts were
unreasonably high. He dealt with the claims for insurance and for
maintenance and repairs as part of the home office expenses. He
reduced the claim for home office expenses from the 50% of the
total house expenses claimed by the Appellant to 10% of the
expenses that the Appellant could substantiate. He also applied
subsection 18(12) of the Act, which precludes deduction of
the expenses related to a home office if they would contribute to
a loss from the business for the year, but permits a carryover of
the excess to succeeding years. Close scrutiny of the audit
report, the oral evidence of Mr. Mutch, and the Appellant's
income tax returns for the statute-barred years does not reveal
any clear evidence of a specific misrepresentation having been
made by the Appellant as to his expenses in the categories other
than automobile expenses, wages, telephone, and home office
expense. I will return to these shortly. It may well be that Mr.
Hans exaggerated some of his expenses in the other categories;
certainly he did not keep proper books, nor did he have vouchers
to establish the amounts that he claimed. However, the Respondent
was not able to show any specific misrepresentations as to the
expenses claimed in those other categories. It appears that Mr.
Mutch simply took the view that once a misrepresentation as to
any claim for expense in a statute-barred year was shown, it
became permissible to reassess the Appellant for that year, and
in doing so to review and disallow any claim for expense of the
business in that year.
[7] The Appellant duly objected to Mr.
Mutch's reassessments, and so Mr. Bozyk reviewed them, along
with additional information supplied and submissions made on the
Appellant's behalf. Mr. Bozyk, for the most part, agreed with the
approach taken by Mr. Mutch, and with the resulting reassessments
that he had made, including the penalties imposed. His single
disagreement with Mr. Mutch was as to the allowable automobile
expense. I shall return to the automobile expenses later, but it
is sufficient at this point to say that Mr. Mutch, in his
assessments, had estimated the total distance driven by the
Appellant each year, and the percentage of that distance that
pertained to the business, and had allowed that percentage of the
total automobile expenses that Mr. Hans was able to support with
vouchers. Mr. Bozyk considered that it was more fair to the
Appellant to take the business kilometres as estimated by Mr.
Mutch, and to allow Mr. Hans 31 ¢ per kilometre as a
reasonable vehicle operating expense. The Appellant argues that
there was no evidence to support the view that 31 ¢ per
kilometre was the cost of operating his vehicle, and he does not
accept Mr. Mutch's estimate of the distance that he travelled for
the purposes of the driving school each year.
[8] In my view, the approach that was
taken by Mr. Mutch and Mr. Bozyk does not give proper effect to
subparagraph 152(4.01)(a)(i) of the Act. Generally,
a taxpayer becomes immune to reassessment by the Minister for any
taxation year when three years have passed since the initial
assessment for that year. Subparagraph 152(4)(a)(i)
creates an exception to permit reassessment in those cases in
which the taxpayer has misled the Minister. Subparagraph
152(4.01)(a)(i) was enacted to ensure that the effect of
any such reassessment is confined to those matters as to which
the taxpayer had misled the Minister. In other words, proof that
the taxpayer misled the Minister as to one category of expense
does not become a licence for the Minister to disallow some or
all of the expenses of another category that were allowed in
arriving at the previous assessment, and require that the
taxpayer discharge the onus of proving each one of them on
appeal. Proof of misrepresentation of a fact relating to the
computation of the taxpayer's automobile expenses will reopen for
the Minister all the elements that make up the claim for
automobile expenses in the year, and she may reassess
accordingly, but it will not permit her to revise the previously
allowed expenses in other categories such as rent or
utilities.
[9] I do not propose to say any more
about the Appellant's claimed expenses for the items other than
automobile, telephone, wages and his office in the home for the
taxation years 1991 to 1994. On the basis of the evidence, and in
particular pages 4 to 11 of Mr. Mutch's Audit Report, I have
concluded that the Appellant was entitled to have those left
undisturbed by reason of subsection 152(4.01). I turn now to the
claimed expenses for automobile, the office in the home, salaries
and wages, and telephone, for the statute-barred years. Before
doing so, however, I must comment upon the quality of the
Appellant's evidence.
[10] I do not consider the Appellant's
evidence to be at all reliable. I believe that his approach to
giving evidence was to say whatever he thought would be most
helpful to his case. There was much evidence about the odometer
readings on a Plymouth Reliant automobile at various dates. Below
is a schedule of the dates and odometer readings for this vehicle
as they appeared on various repair and maintenance invoices.
Date
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Odometer reading
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April 22, 1991
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24065
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May 6, 1991
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25859
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Oct. 11, 1991
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48435
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Oct. 25, 1991
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49830
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Nov. 1, 1991
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50667
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Nov. 1, 1991
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50701
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Nov. 5, 1991
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51000
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Feb. 7, 1992
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60123
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Feb. 18, 1992
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61020
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Nov. 5, 1992
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82130
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Nov. 5, 1992
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82142
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Nov. 6, 1992
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82188
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Dec. 9, 1992
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82312
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Mar. 22, 1993
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091430
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Nov. 18, 1993
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106478
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Dec. 1, 1993
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107124
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Dec. 30, 1993
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108566
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Jan. 28, 1994
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109819
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During his evidence, at one point the Appellant took the
position that the odometer reading on one of those dates should
be greater by 100,000 kilometres because the odometer had only
five digits and it was on its second cycle. It is difficult to
reconcile this with the reading on March 22, 1993, which records
six digits, of which the first was 0. Counsel for the Appellant
called a witness who had owned a car of the same make and year,
and who is an automobile mechanic. He gave evidence that vehicles
of that make and year had only a five digit odometer. Whether
that is so or not, and I make no finding as to that, it is clear
from the dates and the corresponding odometer readings, which
come from documents produced by the Appellant and which he
accepted as accurate during his evidence, that the vehicle in
question here had not been driven more than 85,754 kilometres
between April 22, 1991 and January 28,1994. There is simply no
period in the schedule of odometer readings between those dates
when the vehicle could have been driven an extra 100,000
kilometres.
[11] The Appellant also sought to justify
his claim for business vehicle use with evidence that he had used
a Cadillac that he owned to pick up students who lived in the
northeastern suburbs of Toronto, drive them to Brampton, where he
was licensed to teach driving, and then return them home. I
consider this evidence to be simply fabrication on his part. He
had not claimed that the Cadillac had been used in his business
until it became apparent to him that he could not rationalize the
number of business kilometres that he had claimed to have driven
in the face of the odometer readings from the Reliant that had
been recorded on the documents. He had insured the Cadillac on
the basis that it was driven less than 12,000 kilometres
annually, and only for pleasure and driving less than
50 kilometres per week to work. In a questionnaire that he
had completed for Mr. Mutch in July 1997, Mr. Hans said that he
had used the Toyota (which had replaced the Reliant) in his
business. There is no mention of the Cadillac having been used
for any business purpose. There was no claim made in his income
tax returns for capital cost allowance on the Cadillac. The
distance that he claimed to have driven it was inconsistent with
the other evidence as to its use.
[12] There were many other discrepancies in
the Appellant's evidence. He admitted that he kept no log to
record his vehicle use for personal and for business purposes. He
explained the statements of the total use and business use on his
returns by saying that he wrote the odometer reading down at the
beginning and end of each year in a book, and then gave the
numbers, either on a piece of paper or the book itself, he could
not remember which, to his accountant. He had no explanation for
how this would permit him to divide the distance travelled
between business and personal use. His evidence as to the loss of
his records when moving from one house to another in 1995 was
also incredible. Some of the records he claimed to have lost were
apparently available to be given to his tax preparer in the
spring of 1996 for the preparation of his 1995 return. He said
that he kept the records in a filing cabinet, and yet the filing
cabinet was not lost in the move, nor were some records that he
was able to produce to Mr. Mutch long after the move. His memory
was very selective. There were significant matters as to which he
simply had no recollection, and yet he was able to remember that
a specific pizza, for which he produced a receipt dated in 1991,
had been eaten by him and his students following a lesson. I also
find it difficult to give much weight to the Appellant's
evidence-in-chief, because most of it was given in answer to
leading questions from his counsel, even though only a few of
these were objected to.
[13] I have no doubt that in filing his
income tax returns from 1991 to 1994 the Appellant greatly
overstated the number of kilometres that he drove his vehicle for
the purpose of earning income. He reported the following numbers
of kilometres:
|
year
|
total kilometres
|
business kilometres
|
|
1991
|
82,500
|
66,900
|
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1992
|
75,266
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60,210
|
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1993
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58,613
|
47,506
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1994
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56,675
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45,526
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|
total
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273,054
|
220,142
|
Remembering that the 1994 year of the business ended on
February 28, 1994, and that by January 28, 1994, the Reliant used
in the business had travelled a total of 85,754 kilometres since
April 22, 1991, it is clear that distances reported by the
Appellant were fictitious.
[14] I accept Mr. Bozyk's approach of
allowing the Appellant 31 ¢ per kilometre travelled on
business as being a fair and realistic way to estimate the
automobile expense in these circumstances, where there is no
reason to have confidence that the vouchers produced represent
the true expense incurred by the taxpayer. The Minister need not
prove the exact cost of operating the vehicle. Once
misrepresentation has been established as to the claimed
automobile expenses, as it has been here, it is for the Appellant
to prove his expenses. He produced no credible evidence to do
that. I accept the Minister's estimate of 31 ¢ per kilometre
as being a reasonable one. I do not, however, accept that
Mr. Mutch's approach to determining the ratio of business
distance to total distance travelled for each year is a valid
one. By applying a reasonable amount for business travel to an
inflated total distance travelled he arrived at an unrealistic
ratio of business to total expenses. In my view, it is more
appropriate to estimate the business kilometres for each of the
years from the gross revenues reported for each of those years,
bearing in mind that the parties are in agreement as to the
amount of the revenue for each year. Each lesson was
45 minutes. If one assumes that the average speed of the
vehicle during a lesson was 30 kilometres per hour, which is
generous considering that driving lessons involve parking
practice and discussions while the vehicle is stopped, then the
distance travelled during the year while giving lessons would be
derived by the formula gross revenue ÷ rate per lesson x
¾ x 30. The Appellant's evidence was that the rate he
charged per lesson was $10 when he began to teach in 1990, and
that it increased by $2 each year thereafter. Applying that
formula, and 31 ¢ per kilometre, produces the following
estimate of kilometres per year for business use, and estimate of
expense:
|
1991
|
20,953
|
$4,330
|
|
1992
|
19,153
|
$3,958
|
|
1993
|
10,903
|
$2,253
|
|
1994
|
10,661
|
$2,203
|
|
1995
|
4,884
|
$1,009 - to February 28
|
|
|
3,314
|
$
685 - after February 28
|
[15] It is normal for a driving instructor
to pick up the students and to take them home after the lesson. I
do not accept Mr. Hans' evidence about picking up students in
the east end of the metropolitan area and returning them there.
It was vague at best and improbable at worst. In the absence of
any reliable evidence, I would add 50% to the distance driven,
and so to the cost of operating the vehicle, to account for pick
up and drop off of students. The total automobile expenses for
the five years, estimated by this formula, followed by the
amounts allowed by Mr. Bozyk, in parentheses, would then be:
|
1991
|
$6,495
|
($5,197)
|
|
1992
|
$5,937
|
($5,542)
|
|
1993
|
$3,379
|
($3,605)
|
|
1994
|
$3,304
|
($3,966)
|
|
1995
|
$2,541
|
($3,389)
|
Both sets of numbers are imprecise estimates. The Appellant's
failure to keep proper records makes it impossible to determine
the amounts that he is entitled to deduct with any precision. Mr.
Mutch and Mr. Bozyk attempted to allow him reasonable amounts.
Although the numbers that I have estimated and those that
Mr.Bozyk estimated differ somewhat year-by-year, the aggregates
for the five years are remarkably close. In the circumstances, I
see no reason to alter the deductions that were allowed by Mr.
Bozyk in the reassessments under appeal.
[16] Mr. Hans claimed in his returns for
each of the years from 1991 to 1994 to be entitled to deduct as
expenses of the office in his home 50% of the expenses associated
with ownership of the house. Implicit in this is the assertion
that 50% of the house was used for business purposes. It is
abundantly clear from the evidence that this was a gross
exaggeration. There were eight or nine people living in the
house, which the Appellant testified was 2,000 square feet;
Mr. Hans used one room of ten feet by twelve feet for his
part-time business. Mr. Mutch allowed him 10%, which was
generous. Counsel suggested to Mr. Mutch in
cross-examination that he should have allowed the capital cost
allowance that was claimed on the contents of the office. I
cannot fault him for not doing so; he had no basis on which he
could establish the cost, actual or deemed, of the contents when
the business was begun. Nor was this established in the evidence
before me. I would not make any change to the amount that the
Minister allowed for the office in the home. He properly applied
subsection 18(12).
[17] The Appellant also claimed to be
entitled to deduct telephone expenses on the basis that he had a
telephone dedicated to the business; in fact all the occupants of
the house used the same telephone line. At one time (it is not
clear when) there had been a separate ring for the household and
one for the business, with different numbers, but I did not
understand Mr. Hans to say that there had ever been a separate
business line in the house. He also claimed as a business expense
the cost of long distance calls to Vancouver and to England. In
his evidence, he claimed that these were calls to people who
would be moving to Toronto and that he was calling them for
business reasons. I do not believe him. There is no reason to
change the amounts allowed by Mr. Mutch and Mr. Bozyk.
[18] The final item is the claims for salary
and wages. The amounts claimed by the Appellant were:
|
1991
|
3,000
|
|
1992
|
2,990
|
|
1993
|
2,925
|
|
1994
|
3,210
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Mr. Hans completed and signed a questionnaire on July 10, 1997
in which he said that there were no employees of his business.
His evidence before me was that these amounts were paid to his
children to wash the car and to answer the telephone. As in so
many other areas, his evidence about this was extremely vague,
and it lacked the ring of truth. It was not corroborated by
anyone who could testify to having been paid by him for these or
any other services. In the questionnaire, he said that no family
members helped him in his business, and that he did not pay any
family members to do work for him. I conclude that the payments
as to which he testified were imaginary, and that his claim that
they were made was a misrepresentation. Mr. Mutch and Mr. Bozyk
were correct to disallow them.
the 1995 year
[19] The 1995 year was open for
reassessment. The onus is on the taxpayer to establish that the
assessment is wrong. Mr. Fitzsimmons tried to establish through
his cross-examination of Mr. Mutch and Mr. Bozyk, and also
through a great many leading questions directed to his client,
that it would be fair and reasonable to allow certain additional
items of expense to be deducted in computing the Appellant's
business income for the year 1995. The only one of these as to
which there was any evidence that I found to be at all persuasive
was the claim to deduct interest. The Appellant claimed a total
of $251, and Mr. Mutch agreed that this was a reasonable
claim. I estimated at paragraph 15 above that his automobile
expense for the 1995 year, in the aggregate, was $2,541. The
Minister's assessment allowed him $3,389. I cannot, of course,
increase the amount of the Minister's assessment,[11] but I am far from
being persuaded that it is too high, in spite of his failure to
allow any amount for interest. I would therefore make no change
to the tax assessed for 1995.
[20] There remains the issue of the
penalties. I agree with Associate Chief Justice Bowman's view, as
he expressed it in Urpesz,[12] that the Minister can only sustain
the penalties if he puts before the Court some evidence to
establish that they have been correctly computed. He has not done
so in this case. Although I consider that to a considerable
degree the Appellant's income tax returns were a work of fiction,
I must allow the appeals insofar as the penalties are concerned.
The Minister has not discharged his burden of showing that the
precise penalties imposed were justified. Neither the Reply nor
the evidence reveals how the Minister computed the penalties that
he imposed.
[21] In summary, then, the appeals from the
reassessments for the taxation years 1991 to 1994 are allowed,
and the assessments are referred back to the Minister for
reconsideration and reassessment on the basis the Appellant is
entitled to deductions for the expenses of advertising, business
tax and licences,[13] interest, and legal and accounting as allowed by the
last assessments prior to those of August 18, 1998. The
deductions for the expenses for automobile, office in the home,
including maintenance and repairs and capital cost allowance on
the contents of the office, and for telephone are to be as
allowed by the reassessments made on March 23, 2000. No deduction
is to be allowed for salary or wages. The penalties are to be
deleted. The appeal from the reassessment for the 1995 taxation
year is allowed, and the assessment is referred back to the
Minister for reconsideration and reassessment on the basis that
only the penalties are to be deleted.
[22] Success being divided, I make no Order
as to costs.
Signed at Ottawa, Canada, this 14th day of August, 2003.
Bowie J.
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