Heald,
J
[ORALLY]:—In
our
view
the
learned
Trial
Judge
did
not
err
in
holding
that
the
provisions
of
paragraph
7(1
)(a)
of
the
Income
Tax
Act
apply
to
the
factual
situation
in
this
case.
We
also
think
he
was
correct
in
finding
that
section
51
of
the
Act
cannot
be
interpreted
so
as
to
exempt
the
appellant’s
share
acquisition
from
taxation
pursuant
to
paragraph
7(l)(a).
We
are
of
the
further
view
that,
on
these
facts,
the
benefit
conferred
on
the
appellant
by
the
relevant
agreement
was
received
by
him
.
in
respect
of,
in
the
course
of,
or
by
virtue
of
.
.
.”
his
employment.
Accordingly,
in
our
opinion,
subsection
5
of
section
7
cannot
be
invoked
in
order
to
exempt
the
appellant
from
the
provisions
of
paragraph
7(l)(a).
Finally,
we
are
unable
to
accept
the
appellant’s
submission
that,
assuming
the
application
of
paragraph
7(l)(a),
the
amount
paid
for
the
shares
also
represents
the
value
of
the
convertible
debenture
at
the
time
of
conversion
in
October
of
1977.
No
evidence
was
led
at
trial
to
establish
the
value
of
the
convertible
debenture
as
of
October
1977
nor
was
this
issue
sufficiently
pleaded
by
the
appellant.
In
the
absence
of
such
evidence
as
to
value,
the
Court
must
assume
that
the
value
of
the
debenture
was
the
purchase
price
thereof.
Accordingly
we
believe
that
this
argument
is
not
open
to
the
appellant
on
this
record.
Furthermore
we
agree
with
the
submission
by
Counsel
for
the
respondent
that
to
hold
that
the
October
1977
value
of
the
convertible
debenture
constitutes
the
“amount
paid”
for
the
shares
within
the
meaning
of
paragraph
7(1
)(a),
would
have
the
result
of
rendering
that
paragraph
of
no
effect.
Accordingly,
and
for
the
above
reasons,
the
appeal
should
be
dismissed
with
costs.
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