Estate of the Late Ervin Leslie Sitler v. Minister of National Revenue, [1984] CTC 2482

Goetz, TCJ [ORALLY]:—At the conclusion of the appellant’s case the respondent made a motion for dismissal of the appeal on the following grounds:

1. That the allegations made by the Minister were not disproven.

2. That though there was evidence of an arm’s length transaction there was no evidence to meet the requirements of Section 164(6) of the Income Tax Act.

3. There was no evidence of a capital loss or a capital gain.

In my view there was no evidence to refute the Minister’s allegations in his reply, especially paragraphs 5 and 6 which read as follows:

5. In further answer to paragraphs 6, 7 and 8 of the Notices of Objection, the Respondent says:

(a) In the T-l Personal Return of the late Ervin Leslie Sitler for his 1980 taxation year, there was reported a deemed disposition of the property situated at Sl/2—13-18—22 West 2nd (hereinafter referred to as “the property”) which was as follows:

(i) Proceeds	$112,000.00
(ii) Adjusted Cost Base	40,000.00
(iii) Capital Gain	72,000.00

(b) In the T-3 Trust Return of the Estate of Ervin Leslie Sitler for his 1980 taxation year, there was reported on the disposition of the property the following amounts:

(i) Proceeds	$ 9,600.00
(ii) Adjusted Cost Base	112,000.00
(iii) Capital Loss	102,400.00

and further there was filed a purported election pursuant to the provisions of section 164(6) of the Income Tax Act;

6. By way of Notices of Reassessment dated November 12, 1981 and November 16, 1981, the Respondent reassessed the Personal Return and the Trust Return of Ervin Leslie Sitler respectively by:

(a) revising the reported deemed proceeds of disposition from the property in the T-l Personal Return to $152,000.00 with the consequence that a capital gain in the amount of $112,000.00 rather than $72,000.00 was assessed;

(b) disallowed the claimed capital loss in the amount of $102,400.00 reported in the Appellant’s T-3 Trust Return;

on the basis that the fair market value immediately preceding the Appellant’s death was $152,000 rather than the $112,000 as declared and further that the option granted to the purchaser pursuant to the Appellant’s will was a non-arm’s length transaction with the consequence that the provisions of section 69(1 )(b) deemed the proceeds received by the estate to be the fair market value of the property.

The T-l and T-3 forms merely stand for what they say but are not evidence of value and there was no evidence of market value.

The appellant’s main argument was that he received an option and not a testamentary gift as was stated by counsel for the Minister. Weighing counsel’s respective arguments, I have no alternative but to grant the Minister’s motion for dismissal and I so dismiss the appeal.

Appeal dismissed.