Porfilio c. La Reine, 2003 TCC 644 (Informal Procedure)

Appeals heard on August 5, 2003, at Montréal, Quebec

JUDGMENT

          The appeals from the assessments made under the Income Tax Act for the 1997, 1998 and 1999 taxation years are dismissed.

Signed at Ottawa, Canada, this 8th day of September 2003.

Lamarre, J.

Translation certified true

on this 27^th day of July 2004.

Sophie Debbané, Revisor

REASONS FOR JUDGMENT

Lamarre, J.

[1]      The appellant has appealed from assessments made for the 1997, 1998 and 1999 taxation years by which the Minister of National Revenue (the "Minister") added to his income taxable benefits of $2,359 in 1997, $2,963 in 1998 and $2,941 in 1999 in respect of a standby charge for an automobile provided by his employer pursuant to paragraph 6(1)(e) and subsection 6(2) of the Income Tax Act ("Act"). Two vehicles, a Hyundai and a Honda Civic, were provided by the employer during that period.

[2]      The only issue is the percentage of personal use of the vehicle by the appellant or his family during those years.

[3]      The appellant contends that he used the vehicle in question for personal purposes less than 10 percent of the annual total kilometrage. He says that the only personal use he made of it was to travel from his home to the employer's head office. According to his testimony, the distance between the two varied from four to six km depending on the route taken. The round trip thus corresponded to a distance of eight to 12 km. This is consistent with the personal kilometrage stated on the "Calculation of Taxable Benefit (Automobile)" card provided by the employer (Exhibit A-1).

[4]      According to the cards completed for the years in issue, the appellant travelled 2,415 km for personal purposes in 1997 out of a total of 26,074 for the year. The number reported is 2,015 km in 1998 out of a total of 22,419 km in the year and 2,088 km in 1999 out of a total of 25,222 km in the year. The appellant says that he is married and has two children. His spouse has a four-door Honda Civic, which she uses every day to go to work. The appellant says that he used his spouse's Honda Civic only on weekends and on vacation. He noted that, apart from travel for the office, he did not use the vehicle provided by the employer.

[5]      The respondent disputes this. In reassessing the appellant, the Minister considered that the appellant had used the employer's vehicle more than the appellant had stated. It is the Minister's view that the appellant did not show that all or substantially all of the distance that he had travelled using the employer's vehicle during the years in issue had been in connection with or in the course of the office or employment. The taxable benefit was thus recalculated accordingly in accordance with subsection 6(2) of the Act.

[6]      The auditor of the Canada Customs and Revenue Agency ("CCRA") assigned to the appellant's case conducted an audit of all the employees for whom an automobile had been made available by their employer. The employer was unable to provide adequate justification that he had verified the accuracy of the personal kilometrage travelled by its employees and reported by them for the purposes of preparing the slips given to the employees for tax purposes.

[7]      The appellant tried to justify the number of kilometres travelled for his employment, as he had reported to his employer, by filing his day planners (Exhibit A-2). However, although they show a rather full appointment schedule, the day planners do not state the number of kilometres travelled for business purposes. Here and there, it can be seen that the appellant travelled to Lévis or Beauport, for example, and this is confirmed by gas fill-ups at those places, according to Exhibit A-6. However, the appointments in the day planners do not necessarily correspond to the kilometrage stated in the log books on a given day. According to Exhibit A-1, the reported kilometrage is either too high or no kilometrage is reported for the travel stated in the day planner. The appellant explained that the appointments indicated could be merely tentative and did not necessarily correspond to what had happened that given day.

[8]      In fact, it is very hard to see from the day planners the number of kilometres travelled for business purposes. The logs were completed by the employee and were handed over to the employer only at the end of the year. The appellant says that he completed it as he went along, but there is no specific indicator making it possible to determine the number of kilometres travelled for business purposes. In fact, the number looks much more like an estimate than a detailed calculation.

[9]      Since the appellant contends that he drove his vehicle very little for personal purposes, the burden is on him to prove that that was the case. I find the evidence before me insufficient to rule in the appellant's favour in the circumstances. All the evidence brought by the appellant shows that the vehicle was in fact used, but that evidence does not tell us what personal use was made of it.

[10]     Furthermore, the employer's automobile policy, which appears in Exhibit A-8, clearly states that the vehicle may be used for personal purposes and that spouses and children who hold valid driver's licences may also use the vehicle.

[11]     Having regard to the evidence in the record, I find that I must dismiss the appeals and confirm the assessments in appeal.

Signed at Ottawa, Canada, this 8th day of September 2003.

Lamarre, J.

Translation certified true

on this 27^th day of July 2004.

Sophie Debbané, Revisor