Strayer
J.A.:
In
the
judgment
under
appeal,
the
Tax
Court
Judge
held
that
the
amount
of
$98,867.00
deducted
by
the
respondent
in
the
1984
taxation
year
as
a
charitable
gift
in
the
form
of
a
partial
forgiveness
of
a
loan
to
a
museum,
a
charitable
organization,
could
not
be
a
gift
because
there
was
in
fact
no
loan
to
be
forgiven.
He
held,
however
that
the
Minister
could
not
reassess
the
respondent
for
1984
because
that
year
was
statute-barred.
Thus,
the
respondent’s
claim
of
total
charitable
donations
in
his
1984
return
in
the
amount
of
$178,357,
including
the
purported
loan
forgiveness
of
$98,867,
could
not
be
reassessed.
The
result
was
that
the
taxpayer’s
charitable
gift
deduction
of
$111,237,
being
20%
of
his
income,
could
not
be
altered.
However,
the
Tax
Court
Judge
dismissed
the
respondent’s
appeal
concerning
the
1985,
1986
and
1987
taxation
years
to
the
extent
that
these
were
based
on
later
purported
forgiveness
of
instalments
of
the
same
loan
held
by
the
Court
to
be
non-existent.
In
closing
the
learned
Tax
Court
Judge
added
the
following:
If
the
Minister
is
not
permitted
to
reopen
1984,
the
Appellant
is
left
with
his
aggregate
charitable
donations
of
$178,357
for
that
year.
If
the
Appellant
does
not
have
adequate
income
in
1984
to
absorb
all
of
those
charitable
donations,
he
should
be
able
to
carry
forward
to
subsequent
years
any
1984
donations
not
used
for
income
tax
purposes
in
that
year.
The
dismissal
of
the
appeals
for
1985,
1986
and
1987
will
be
subject
to
that
condition.
He
issued
judgement
accordingly
and
the
only
issue
before
us
is
the
Minister’s
argument
to
the
effect
that
the
forgiveness
of
a
non-existent
loan
cannot
be
taken
into
account
in
any
carry-forward
of
charitable
gifts
for
the
years
following
1984,
even
though
the
Minister
could
not
reassess
the
deductions
taken
in
1984.
We
are
all
of
the
view
that
the
Tax
Court
Judge
erred
in
law
on
this
issue
in
assuming
for
carry-forward
purposes
that
the
“aggregate
charitable
donations”
of
1984
were
$178,357.
The
entitlement
to
carry
forward
charitable
donations
as
deductions
from
income
arises
under
paragraph
110(
1
)(a)
of
the
Income
Tax
Act
which
provides,
effective
1985,
as
follows:
110
(1)
Other
deductions
permitted.
-
For
the
purpose
of
computing
the
taxable
income
of
a
taxpayer
for
a
taxation
year,
there
may
be
deducted
such
of
the
following
amounts
as
are
applicable:
(a)
charitable
gifts.
-
the
aggregate
of
gifts
made
by
the
taxpayer
in
the
year
(and
in
the
five
immediately
preceding
taxation
years
to
the
extent
of
the
amount
thereof
that
was
not
deducted
in
computing
the
taxable
income
of
the
taxpayer
for
any
preceding
taxation
year)...
It
will
be
noted
that
the
deductible
amount
is
calculated
by
determining
first
the
“aggregate
of
gifts
made
by
the
taxpayer”
in
preceding
years
and
then
subtracting
from
that
aggregate
the
amount
already
deducted
from
income.
It
appears
to
us
that
in,
for
example,
an
assessment
made
in
respect
of
1985
taxes
the
Minister
is
obliged,
in
considering
the
amount
to
be
carried
forward,
to
determine
the
aggregate
of
“gifts”
made
in
previous
years
and
this
must
in
the
context
be
confined
to
qualifying
charitable
gifts.
In
this
case,
the
Tax
Court
Judge
determined
that
the
sum
allegedly
given
to
the
Museum
in
1984
(purportedly
$98,867)
was
not
a
gift
because
there
was
no
loan
which
could
have
been
forgiven
by
the
respondent.
Therefore
in
calculating,
for
purposes
of
carry-forward
in
subsequent
years,
the
aggregate
of
gifts
made
in
1984,
as
required
by
paragraph
110(1)(a),
that
aggregate
cannot
include
the
invalid
amount
of
$98,867.
This
would
leave
an
aggregate
of
$178,357.00
(the
total
reported)
minus
$98,867
(the
invalid
amount),
that
is
$79,490.00
and
not
$178,357
assumed
by
the
Tax
Court
Judge.
As
$111,237
was
already
deducted
in
1984
there
remains
no
balance
to
carry
forward
to
subsequent
years.
We
believe
this
result
to
be
consistent
with
previous
jurisprudence
of
the
Federal
Court
and
the
Tax
Court
.
Unless
statute-barred,
the
Minister
is
obliged
to
assess
each
year
in
accordance
with
the
Act.
Therefore
the
appeal
will
be
allowed
and
the
judgment
of
the
Tax
Court
revised
accordingly.
Appeal
allowed
in
part.
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