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Citation:2003TCC416
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Date:20030630
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Docket:2003-556(IT)I
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BETWEEN:
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ANTHONY MARK AKENA,
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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
Beaubier, J.T.C.C.
[1] This appeal pursuant to the
Informal Procedure was heard at Edmonton, Alberta, on June 12,
2003. The Appellant was the only witness. He has a Ph D. in
Chemistry.
[2] Paragraphs 1-13 of the Reply to
the Notice of Appeal read as follows:
A. STATEMENT OF
FACTS
1.
He admits:
(a) that the
Appellant filed a Notice of Objection in respect of the
assessment issued by the Canada Customs and Revenue Agency (the
"CCRA") for the 1998 taxation year;
(b) that the
Appellant was arbitrarily assessed for the 1998 taxation year as
he did not file a return of income for the year;
(c) that the
Appellant did file an amended return of income for the 1998
taxation year on November 20, 2002; and
(d) that the
amended return for the 1998 taxation year purports that the
Appellant's taxable income was $3,003.00 and that the tax
payable was nil
as stated in the Notice of Appeal.
2.
He denies that the Appellant was assessed for the 1998 taxation
year on April 26, 2002 as stated in the Notice of Appeal.
3.
He states that there are no other allegations of fact stated in
the Notice of Appeal to admit, deny or put in issue. However, if
there are any other allegations of fact, they are denied.
4.
By letter dated July 6, 1999 and sent to the Appellant on that
date, the CCRA requested that the Appellant file a return of
income for the 1998 taxation year.
5.
By letter dated August 17, 1999 and sent to the Appellant on that
date, the CCRA demanded that the Appellant file a return of
income for the 1998 taxation year.
6.
The Appellant did not file a return of income for the 1998
taxation year as requested and as demanded by the CCRA.
7.
The Minister of National Revenue (the "Minister")
assessed the Appellant on November 6, 2000 and further reassessed
the Appellant on January 3, 2002 pursuant to subsection 152(7) of
the Income Tax Act, R.S.C. 1985 (5th Supp.)
c.1, (the "Act") as amended for the 1998
taxation year.
8.
In assessing the Appellant as stated in paragraph 7 above, the
Minister determined the Appellant's total income to be
$18,783.00, as follows:
Source
Amount
Royal Bank of
Canada
$ 2,000.00
Noramtec Consultants
Inc.
1,003.00
Net Business
Income
15,780.00
Total
Income
$18,783.00
9.
In so assessing the Appellant, the Minister made the following
assumptions of fact:
(a) the Appellant
received the amount of $2,000.00 out of a registered retirement
savings plan from the Royal Bank of Canada in the 1998 taxation
year;
(b) the Appellant
received the amount of $1,003.00 from Noramtec Consultants Inc.
in the 1998 taxation year;
(c) at all material
times to the 1998 taxation year, the Appellant was single;
(d) at all material
times to the 1998 taxation year, the Appellant resided in the
metropolitan area of Edmonton, Alberta;
(e) at all material
times to the 1998 taxation year, the
Appellant was self-employed as a chemist/consultant /
instructor/contract-worker;
(f) the
Appellant did not provide to the CCRA any details with respect to
the nature of his income earning activities for the 1998 taxation
year;
(g) at all material
times to the 1998 taxation year, the Appellant owned at least one
motor vehicle;
(h) the Appellant
paid rent in respect of personal accommodations in the amount of
$492.00 per month, for a total of $5,904.00, in the 1998 taxation
year;
(i) pursuant
to statistics published by Statistics Canada, the average
household expenditures in the metropolitan area of Edmonton,
Alberta for a household with an average of 2.82 persons,
excluding shelter, amounted to at least $30,664.00 for the 1998
year;
(j) based upon
the statistics published by Statistics Canada as stated in
paragraph 9(i) above, it is reasonable to conclude that the
average household expenditures in the metropolitan area of
Edmonton, Alberta for a household with one person, excluding
shelter, amounted to at least $10,873.00 for the 1998 taxation
year;
(k) it is reasonable
to conclude that the personal expenses of the Appellant amounted
to at least $16,777.00 for the 1998 taxation year, being the
total of rent in the amount of $5,904.00 as stated in paragraph
9(h) above and other household expenses in the amount of
$10,873.00 as stated in paragraph 9(j) above; and
(l) the
Appellant was in receipt of net business income in the amount of
at least $13,774.00 in the 1998 taxation year, being the
difference between the Appellant's living expenses in the
amount of $16,777.00 and the income totalling $3,003.00 as stated
in paragraphs 9(a) and 9(b) above.
B. ISSUE TO
BE DECIDED
10.
The issue to be decided is whether the Minister properly assessed
the Appellant pursuant to subsection 152(7) of the
Act.
C. STATUTORY
PROVISIONS, GROUNDS RELIED ON AND RELIEF SOUGHT
11.
He relies on sections 3, 4, 9, 146, 161 and 162, subsection
152(7) and paragraphs 56(1)(h) and 150(1)(d) of the
Act.
12.
He submits that the Appellant was in receipt of net business
income in the amount of at least $13,774.00 in the 1998 taxation
year.
13.
He further submits that the Appellant should be reassessed to
reduce net business income by $2,006.00 from $15,780.00 to
$13,774.00, and he requests that the remainder of the appeal be
dismissed.
[3] The Appellant alleged that he
finally filed an income tax return for 1998 in late 2002. When he
testified he and his tax preparer, Mr. Fedoruk, failed to bring
any back up documents respecting their allegations to Court. Mr.
Akena also claimed medical problems in Court but again failed to
be specific. His lack of specificity in all of his testimony, in
total, amounted to evasiveness.
[4] In particular, the gist of his
evidence is that his job as a chemist for the Province of Alberta
terminated some years ago. He cannot get a recommendation for a
job. As a result he has held a number of private coaching or
tutoring jobs for students and an occasional consulting job in
the last several years, including 1998.
[5] The Appellant admitted that he had
the following income in 1998:
1. RRSP cashed
in
$2,000.00
2. Noramtec Consultants
Inc. $1,003.00
3. Gross income
business
$7,798.30
Total $10,801.30
[6] Against his business income he
claimed a business in-home expense concerning which he was not
specific. In particular he did not describe the space used on
that item used exclusively for business, nor did he describe the
total area of the home. As a result this claim is not allowed. He
also claimed vehicle expenses for his BMW but again he failed to
be specific as to its business use, alleged customers or
locations, or if it was all merely personal or home to work
usage. Finally, he claimed a loss carry forward of $4,399.21
which, again he could not explain or particularize.
[7] As a result the Court finds that
all of the claims against alleged business income are
disallowed.
[8] None of the assumptions in
paragraph 9 were refuted by the evidence.
[9] This Court is most reluctant to
accept an estimation of income based solely on Statistics Canada
figures. However, given the Appellant's own lack of
credibility and failure to provide any credible verification of
his allegations for 1998, the assumptions, as corrected in the
Reply, are accepted.
[10] Therefore the appeal is dismissed.
Signed at Saskatoon, Saskatchewan, this 30th day of June
2003.
J.T.C.C.
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