Docket: 2002-2839(IT)I
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BETWEEN:
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KAREN CLAYTON,
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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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____________________________________________________________________
Appeal heard on common evidence with the appeal of
Franco Manocchio (2002-3538(IT)I) on August 7, 2003,
at Montreal, Quebec.
Before: The Honourable Justice Lucie Lamarre
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Appearances:
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For the Appellant:
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The Appellant herself
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Counsel for the Respondent:
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Anne-Marie Boutin
Dany Leduc
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____________________________________________________________________
JUDGMENT
The
appeal from the assessment made under the Income Tax Act
for the 1991 taxation year is dismissed.
Signed at Ottawa, Canada, this 8th day of September 2003.
Lamarre, J.
Citation: 2003TCC640
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Date: 20030908
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Docket: 2002-2839(IT)I
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BETWEEN:
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KAREN CLAYTON,
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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
Lamarre, J.
[1] Whereas the appellant claimed a
business loss of $13,468 in her 1991 income tax return and such
loss was allowed on initial assessment dated August 21,
1992.
[2] Whereas by reassessment dated
August 16, 1995, the business loss initially allowed was
subsequently disallowed.
[3] Whereas on July 12, 1996, the
appellant filed an application for extension of time to file an
objection, which application was granted and the objection was
considered filed on that date.
[4] Whereas the Minister of National
Revenue ("Minister") confirmed the reassessment by
Notice of Confirmation on May 2, 2002, that is, almost six years
after the Notice of Objection was filed.
[5] Whereas the interest on the amount
reassessed was increasing throughout that period.
[6] Whereas the evidence showed that
the appellant had invested in a tax shelter but had not filed
with the Minister a prescribed form containing prescribed
information, including the identification number for the tax
shelter, as required by subsections 237.1(1) and 237.1(6) of the
Income Tax Act ("Act").
[7] Whereas the appellant is therefore
foreclosed to claim a loss in relation to the investment in a tax
shelter pursuant to subsection 237.1(6) of the Act.
[8] Whereas it is admitted by the
respondent that the Minister took six years to confirm the
reassessment because he was waiting for the decision to be given
in McKeown v. Canada, [2001] T.C.J. No. 236 (Q.L.), which
case was similar to the present one and many other cases, without
first advising the appellant of that decision.
[9] Whereas the appellant is now
prejudicially affected by such delay caused in part by the
actions of the Minister in that the interest amount has increased
accordingly.
[10] Whereas the appellant testified that
she had inquired many times of the Minister about the status of
her appeal.
[11] Wherefore, I have no other choice but
to dismiss the appeal for the reasons set out in paragraphs 6 and
7 above. Nonetheless, I encourage the Minister to use his
discretion pursuant to subsection 220(3.1) of the Act to
determine whether a portion of the interest that has accumulated
partially as a result of the Minister's actions during that
six-year period should be waived.
Signed at Ottawa, Canada, this 8th day of September 2003.
Lamarre, J.
COURT FILE NO.:
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2002-2839(IT)I
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STYLE OF CAUSE:
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Karen Clayton v. The Queen
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PLACE OF HEARING:
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Montreal, Quebec
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DATE OF HEARING:
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August 7, 2003
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REASONS FOR JUDGMENT BY:
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The Honourable Justice Lucie Lamarre
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DATE OF JUDGMENT:
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September 8, 2003
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For the Appellant:
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The Appellant herself
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Counsel for the Respondent:
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Anne-Marie Boutin
Dany Leduc
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For the Respondent:
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Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
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