Sheik Alllm v. Minister of National Revenue, [1983] CTC 2442

Guy Tremblay:—This case was heard in London, Ontario, on November 1, 1982.

1. The Point at Issue

The point is whether the appellant is correct in claiming the amounts of $4,045, $4,350, $3,470 and $3,790 in the computation of his income for the 1977, 1978, 1979 and 1980 taxation years respectively for exemptions concerning his parents, a sister, a brother-in-law and a cousin.

2. The Burden of Proof

2.01 The burden is on the appellant to show that the respondent’s assessments are incorrect. This burden of proof results particularly from several judicial decisions, including the judgment delivered by the Supreme Court of Canada in Johnston v MNR, [1948] CTC 195; 3 DTC 1182.

2.02 In the same judgment, the court decided that the assumed facts on which the respondent based his assessment or reassessment are also deemed to be correct. In the present case, the assumed facts are described in the reply to notice of appeal as follows:

5. In assessing tax as aforesaid, the Respondent relied upon the following findings or assumptions of fact:

(a) that the amounts of $540, $560, $900 and $990 claimed by the Appellant in the 1977, 1978, 1979 and 1980 taxation years respectively, as expenditures for the support of Sheik M Allim (father) were not expended for his support;

(b) that the amounts of $415, $430, $910 and $990 claimed by the Appellant in the 1977, 1978, 1979 and 1980 taxation years respectively, as expenditures for the support of Gladys Allim (mother) were not expended for her support;

(c) that the amounts of $1,600 and $1,810 claimed by the Appellant in 1979 and 1980 taxation years respectively, as expenditures for the support of Gladys Allim (mother), a person allegedly confined to a bed or wheelchair, were properly disallowed as Gladys Allim in fact was not a person confined to bed or wheelchair for any substantial period of time each day in the 1979 and 1980 taxation years;

(d) that the amounts of $750 and $840 claimed by the Appellant in the 1977 and 1978 taxation years respectively, as expenditures for the support of Arlene Allim (sister), were not expended for her support;

(e) that the amount of $780 claimed by the Appellant in the 1977 taxation year for the support of Mickford Durgana (brother-in-law) was not expended for his support;

(f) that the amount of $840 claimed by the Appellant in the 1978 taxation year for the support of David Mallay (cousin) was properly disallowed as he was not a person dependent upon the Appellant within the meaning of paragraph 109(1) of the Act.

3. The Facts

3.01 The position of the two parties in the pleadings are clearly described in paragraph 4 of the reply to notice of appeal:

4. The amounts claimed and disallowed in respect of each relative are set out in the following tables:

1977 Taxation Year

	Claimed		Disallowed
Sheik M Allim (Father in Guyana)	$	540.00	$	540.00
Gladys Allim (Mother in Guyana)		415.00		415.00
Arlene Allim (Sister in England)		750.00		750.00
Mickford Durgana (Brother-in-law)		780.00		780.00
Sanchari Budram (Mother-in-law)		780.00		—
Venoomattie Budram (Sister-in-law)		780.00		—
	$4,045.00		$2,485.00
	2,485.00
Amount allowed by Respondent	$1,500.00
1978 Taxation Year
	Claimed		Disallowed
Sheik M Allim	$	560.00	$	560.00
Gladys Allim		430.00		430.00
Arlene Allim		840.00		840.00
Sanchari Budram		840.00		—
Venoomattie Budram		840.00		—
David Mallay (Cousin)		840.00		840.00
	$4,350.00		$2,670.00
	$2,670.00
Amount allowed by Respondent	$1,680.00

1979 Taxation Year

	Claimed		Disallowed
Sheik M Allim	$	900.00	$	900.00
Gladys Allim		910.00		910.00
— Disability Deduction	1,660.00			1,660.00
	$3,470.00		$3,470.00
	3,470.00
Amount allowed by Respondent
	0
1980 Taxation Year
	Claimed		Disallowed
Sheik M Allim	$	990.00		$990.00
Gladys Allim		990.00		990.00
— Disability Deduction	1,810.00			1,810.00
	$3,790.00		$3,790.00
	3,790.00
Amount allowed by Respondent	d)

3.02 In sum, the appellant is the son of Sheik M and Gladys Allim, the brother of Arlene Allim, the brother-in-law of Mickford Durgana and the cousin of David Mallay.

3.03 At the beginning of the hearing, the appellant informed the Board that he did not appeal the claim for his cousin David Mallay for his 1978 taxation year. The claimed deduction was $840.

3.04 During the trial, the appellant also said that he was not claiming the deduction in the amount of $1,660 (disability deduction) for Gladys Allim for the 1979 taxation year.

3.06 Concerning Mr Mickford Durgana, the evidence is to the effect that:

(a) there were no receipts for any amounts given to him by the appellant;

(b) he arrived in Canada in July 1977 and got married on August 3, 1977 to the appellant’s sister Venus Rohini (it was Allim) (Exhibit R-3, Marriage Certificate);

(c) he started to work in September 1977;

(d) his wife Venus started to work in August 1977.

3.07 Concerning the appellant’s sister, Arlene Allim, the evidence is to the effect that:

(a) in 1977 and 1978, she was a student in Food Technology at the South London College in London, England;

(b) for the year 1977 an affidavit (Exhibit A-2) was signed by Mr Cyril Arjoon, the appellant’s brother-in-law, living in London, England. He affirmed that in 1977 Arlene Allim received $750 from the appellant in money orders. After endorsing the money orders, Arlene, who had no bank account, remitted it to Mr Arjoon. The latter cashed it at his bank and handed the cash to her;

(c) for the year 1978, an affidavit (Exhibit A-1) was signed by Miss Mu- rlena Allim, sister of Arlene. She affirmed that in 1978 she cashed some money orders totalling $840 received from the appellant for the support of Arlene. She gave her the said $840;

(d) pursuant to an affidavit signed by Arlene it confirms that she received $750 in 1977 and $840 in 1978 from the appellant (Exhibit A-7).

3.08 With respect to Mr Sheik Mohamed Allim, the appellant’s father, the evidence is to the effect that:

(a) he was living in Guyana during the years involved;

(b) he was 62 years old in 1977;

(c) he received a pension of about $48 (Canadian money) per month from the Guyana Government (Exhibit A-4) as an ex-gratia pensioner (sugar plant pension) of the estate. He received in fact, $12 per week (Exhibit A-3 — Information from the Personnel Department Albion Estate, Berbice, Guyana);

(d) pursuant to an affidavit (Exhibit A-7) signed by the appellant’s father, he received from the appellant $590 (1977), $560 (1978), $900 (1979) and $990 (1980) in money orders.

3.09 With respect to Gladys Allim, the appellant’s mother, the evidence is to the effect that:

(a) she was 57 years old in 1977;

(b) she was living with her husband in Guyana;

(c) pursuant to an affidavit (Exhibit A-7) she received from the appellant $415 (1977), $430 (1978), $910 (1979) and $1,000 (1980);

(d) she lived in Canada from December 20, 1979 to July 31, 1980;

(e) pursuant to two declarations made by a physician (Exhibits A-5 and A-6) Dr Manwel Bedessee, a specialist in obstetrics and gynaecology in Kitchener, she was suffering in 1980 from rheumatoid arthritis, and “this condition has confined her to bed for the major part of each day.”;

(f) during the time she was in Canada, she received full support from her son (Exhibit R-1 — Letter from Gladys Allim).

3.10 Pursuant to a declaration signed by Sheik Mohamed and Gladys M Allim, the money orders they received from the appellant “were endorsed by us and then delivered to businessmen for cashing. The funds received in exchange were used for our support.” (Exhibit A-8).

3.11 According to Mr Paul Jenkins, investigator for Revenue Canada, the majority of the money orders sent to the appellant’s parents were cashed in Canada. One was cashed in Guyana. Photocopies of money orders were filed as Exhibit R-2.

In fact, the money orders were issued by the Royal Bank of Canada during the years involved and they read as follows:

5 of these 11 money orders were cashed in the USA, 4 in Canada and 2 in St Lucia; 7 of these 14 money orders were cashed in the USA and 7 in Canada; the money orders were cashed in Waterloo, Ontario;

1978	Total
5 to Sheik M Allim	$ 560
9 to Gladys Allim	$ 455

1979	Total
2 to Sheik M Allim	$ 900

1980	Total
2 to Sheik M Allim	$1,000

the money orders were cashed in New Rochelle, New York.

3.12 The money orders sent to Arlene N Allim, Exhibit R-2, are to the effect that:

(a) two money orders ($250 and $500) were issued by the Royal Bank of Canada on November 14, 1977;

(b) b) the money orders were endorsed by Arlene N Allim, herself;

(c) it was not possible to see where they were negotiated;

(d) two money orders ($500 and $300) were issued by the Royal Bank of Canada on June 28, 1978;

(e) the money orders were endorsed by Arlene N Allim, herself; it was not possible to see where they were negotiated;

(f) another money order was issued by the Royal Bank of Canada on November 24, 1978, and was negotiated by the Manhattan Savings Bank on February 20, 1979.

3.13 Miss Mary Shally, accountant clerk at the Royal Bank of Canada in Waterloo, testified that:

(a) a money order in the amount of $500 dated November 14, 1978 was deposited at the Royal Bank in Waterloo, Ontario (Canada) on November 21, 1978. The Board states that the signature of the endorsement looks more like the appellant’s signature than his father’s signature which was taken from different documents signed by him (affidavits and money orders);

(b) a money order of $600 made payable to the name of Sheik Mohamed Allim dated October 1, 1979 was deposited at the Royal Bank of Canada in Waterloo, Ontario (Canada) on October 5, 1979;

(c) a money order of $150 made payable to the name of Gladys Allim dated December 27, 1978 was sent to Guyana and was deposited on December 29, 1978 at the Royal Bank of Canada in Waterloo, Ontario (Canada).

3.14 According to the appellant, the money orders were sent to his parents by mail from Canada.

4. Law — Cases at Law — Analysis

4.01 Law

The main provisions of the Income Tax Act involved in the present case are paragraphs 109(1)(e) and (f), 110(1)(e) and subsection 252(2). They shall be quoted in the analysis, if necessary.

4.02 Cases at Law

1. Dilbag Singh Mangat v MNR, [1980] CTC 2011; 80 DTC 1008;

2. Karnail S Cheema v MNR, [1980] CTC 2273; 80 DTC 1230;

3. The Queen v Aldo Diaz, [1981] CTC 138; 81 DTC 5112;

4. Abdulmalik Karimi v MNR, [1979] CTC 2471; 79 DTC 408.

4.03 Analysis

4.03.1 As explained above in paragraph 2, the appellant has the burden of proof. The preponderance of the evidence must reverse the respondent’s thesis. It is a heavy burden.

The Board must consider the deduction claimed for each person in regard to the evidence adduced for the said deductions. After the trial the Board received two letters from the appellant giving new facts concerning this case. The Board cannot take these facts into consideration.

4.03.2 Mickford Durgana — 1977 — $780

On this point with the adduced evidence, the Board has no hesitation to dismiss the appeal. Indeed up to the date of the marriage (August 3, 1977), the appellant could not have taken Mr Durgana in charge because he was not related to him. After the marriage, Mr Durgana was under the charge of his wife and she started to work in August. Mr Durgana started to work in September. Moreover, the appellant did not file any receipts concerning the amounts of money given or expended to Mr Durgana.

4.03.3 Arlene Allim

Arlene Allim is the appellant’s sister. He claimed $750 in 1977 and $840 in 1978 (para 3.01). To confirm the appellant’s testimony, the adduced evidence (para 3.07) consists of 3 affidavits (Exhibits A-1, A-2 and A-7) signed by Arlene Allim, by his brother-in-law and her sister. Money orders in the name of Arlene N Allim were filed by the respondent. The evidence is to the effect that it was not obvious in 1977 and 1978 that the said money orders were negotiated in England where Arlene was supposed to study. One can see the endorsement of Arlene N Allim and not the endorsement of Mr Cyril Arjoon for 1977 when he was supposed to be the one to have cashed it pursuant to the affidavit (Exhibit A-2 — para 3.07(a)). In 1978, one can see the endorsement of Arlene N Allim, but not the one of Murlena Allim, her sister, pursuant to the affidavit (Exhibit A-1, para 3.07(b)).

The appellant has not reversed the burden of proof. The appeal must be dismissed on this point.

4.03.4 Sheik M and Gladys Allim

The testimony of Mary Shally (para 3.13) concerning the money orders cashed in Canada, 7 days, 4 days and 2 days after they were issued and after they were sent by mail to Guyana, strongly affects the credibility of the appellant on his testimony and on all the documents filed before the Board. The latter would be justified to dismiss the appeal only on this point. However, one point appears to be true in the evidence and it is the fact that the appellant’s mother arrived in Canada in Dcember 1979 and she left at the end of July 1980. During that period, she received full support from the appellant. For this reason, the Board allows $600 for 1980.

5. Conclusion

The appeal is allowed in part and the matter referred back to the respondent for reassessment in accordance with the above reasons for judgment.

Appeal allowed in part.