D
E
Taylor:—Gentlemen,
this
will
be
the
decision
of
the
Board
with
regard
to
this
matter
just
completed.
i
would
normally
take
it
and
complete
the
appeal
by
writing
my
comments
with
regard
to
the
merits
of
the
issue
itself.
However,
as
I
see
it,
both
of
you
have
indicated
certain
respective
bases
upon
which
the
Board
can
allow
or
dismiss
the
appeal,
and
with
the
greatest
respect
to
Mr
Trotta,
counsel
for
the
appellant,
his
argument
comes
down
to
one
of
credibility.
That
has
been
put
in
the
form
of
a
direct
challenge
—
not
a
basis
for
decision
which
I
relish
in
general,
but
neither
is
it
one
from
which
I
may
abstain.
Therefore,
since
the
essence
of
this
decision
will
relate
to
credibility,
l
have
no
intention
of
going
into
great
detail
about
this
matter.
I
will
deal
with
it
quickly
and
orally,
and
quite
frankly
thereby
permit
both
of
you
the
early
opportunity
of
reviewing
the
evidence
and
testimony
in
any
way
and
for
any
purpose
you
wish.
The
sooner
we
get
to
that
process,
the
better.
This
is
an
appeal
against
an
income
tax
assessment
for
the
year
1971
from
Fernand
Larose.
The
details
and
description
of
the
nature
of
that
appeal
and
the
matters
covered
by
it
are
reviewed
in
an
order
of
the
Board
dated
March
10,
1981,
resulting
from
a
motion
made
by
counsel
for
the
respondent
[1981]
CTC
2584;
81
DTC
198.
This
appeal
has
now
been
continued
following
that
order.
The
order
of
March
10,
1981
said,
and
I
quote:
In
my
view,
counsel
for
the
appellant
summarized
the
appellant’s
problem
in
argument
as
follows:
“One
final
point
is
I
did
put
a
great
deal
of
reliance
on
this
date
May
5,
’72.
However,
all
I
said
was
that
it
was
possible
that
a
lot
of
those
handwritten
exhibits
introduced
by
Mr
Cadieux
were
prepared
after
(that
date).
I
did
not
say
definitely,
of
course
I
could
not
say
definitely,
that
they
were
prepared
after
because
it
is
possible,
I
don’t
know.
There
is
no
evidence
from
the
author
of
those
documents
as
to
when
exactly
they
were
prepared.”
Continuing
in
the
order:
The
conclusion
I
reach
on
the
balance
of
probabilities
is
that
the
Minister
is
entitled
to
recalculate
the
reported
net
income
of
the
partnership
for
the
year
1971
($87,781.70)
so
that
one
amount
of
$6,229.97
included
therein
should
be
credited
to
the
income
of
the
appellant,
and
so
that
of
the
balance
($81,551.73),
an
amount
of
$48,931.03
representing
60%,
should
also
be
credited
to
the
appellant
as
income.
The
reassessment
at
issue
for
the
year
1971
is
therefore
declared
valid.
The
adjourned
hearing
will
be
rescheduled
by
the
Board
to
provide
the
parties
with
an
opportunity
to
bring
forward
further
matters
considered
by
them
to
be
relevant
to
the
appeal.
There
was
a
discussion
between
counsel
and
the
Board
at
the
commencement
of
this
adjourned
part
of
the
hearing
with
regard
to
the
particular
nature
of
subsection
152(4)
and
subsection
152(5)
of
the
Income
Tax
Act
—
whether
or
not,
in
effect,
the
order
of
the
Board
as
has
just
been
read
put
those
issues
to
rest
(the
amounts
of
$6,229.97
and
$48,931.03)
and
left
them
beyond
any
further
discussion.
However,
leaving
any
decision
on
that
question
aside,
neither
counsel
forced
it
upon
the
Board,
and
both
agreed
to
proceed
and
permit
the
introduction
of
further
evidence.
That
being
done,
the
Board
makes
no
decision
on
whether
or
not
section
152,
parts
4
and
5,
should
be
read
one
way
or
the
other
as
it
flows
from
this
particular
matter.
The
order
remains
valid
in
itself,
for
the
purpose
of
this
hearing,
since
the
amount
of
$6,229.97,
at
least,
has
not
been
challenged
by
anything
arising
out
of
this
adjourned
hearing.
Concentration
of
counsel
for
the
appellant
today
has
largely
been
on
the
allocation
or
distribution
of
the
$81,551.73.
Therefore,
there
are
possibly
two
matters
at
issue,
one
concerns
the
proportionate
distribution
of
income
from
the
partnership
of
which
the
appellant
was
one
member,
and
in
which
a
gentleman
named
Cousineau
and
another
gentleman
named
Couture
were
the
other
partners
(the
essence
of
the
$48,931.03
amount
above).
The
second
concerns
the
$40,000
amount
dealt
with
in
the
order,
and
referred
to
as
“Pointco”.
Counsel
for
the
appellant’s
argument
is
twofold:
first,
that
the
Board
must
accept
as
credible
the
evidence
presented
on
behalf
of
the
appellant,
particularly
by
a
Mr
Cousineau
who
had
been
one
of
the
partners
with
regard
to
the
sharing
of
partnership
income;
and
second,
that
of
a
Mr
Gauthier
with
regard
to
the
Pointco
matter.
In
my
view,
while
counsel
for
the
appellant
points
out
that
the
testimony
of
these
parties
held
up
very
well
and
counsel
for
the
appellant
also
notes
that
there
was
not
a
great
deal
of
cross-examination,
the
statements
made
by
Mr
Cousineau
in
connection
with
the
partnership
sharing
issue,
and
those
made
by
Mr
Gauthier
in
connection
with
the
Pointco
matter
are
at
the
minimum
incomplete
and
largely
inconsistent
with
the
documented
record.
I
do
not
accede
to
the
comment
made
by
counsel
for
the
appellant
that
it
would
be
necessary
in
order
for
the
Board
to
reject
this
evidence
to
say
that
they
were
lying,
but
I
do
say
that
their
recollection
of
the
events
was
very
nebulous.
On
a
positive
basis,
I
would
like
to
turn
to
item
3
in
the
appellant’s
book
of
evidence
in
the
documents
presented
at
this
hearing.
I
made
reference
to
it
earlier
in
questioning
Mr
Larose
and
I
pointed
out
that
we
were
dealing
with
the
distribution
and
allocation
and
his
entitlement
to
one
third
of
the
cash
income
from
this
business
or
we
were
not.
Either
that
was
the
case
and
therefore
the
tax
returns
were
appropriate
and
proper,
or
we
were
not
dealing
with
that
and
they
were
improper
as
indicated
by
the
Minister.
There
was
no
confirmation
provided
at
this
hearing
for
the
capital
accounts
set
up
at
January
1,
1972
on
that
particular
set
of
statements
(item
3).
The
Board
was
not
provided
with
any
information
on
it
and,
in
order
for
the
hypothesis
presented
by
the
appellant
to
be
sustained
(the
amounts
set
up
for
Fernand
Larose
as
$23,820.62,
for
Cousineau
as
$9,683.82
and
for
Couture
as
$6,414.49
to
be
proper
and
to
be
in
accord
with
that
hypothesis),
these
amounts
would
have
to
reflect
the
balances
owing
to
these
people
on
a
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