Dussault
T.C.J.:
The
appellant
is
challenging
an
assessment
for
his
1986
taxation
year
in
which
the
Minister
of
National
Revenue
(“the
Minister”)
added
to
his
income
an
amount
of
$125,000
which
he
allegedly
appropriated
from
the
companies
2319-6322
Québec
Inc.
(“company
2319”)
and
1864-2470
Québec
Inc.
(“company
1864”).
The
assessment
was
made
after
the
usual
reassessment
period
and
a
penalty
added
pursuant
to
s.
163(2)
of
the
Income
Tax
Act
(“the
Act”).
The
appellant
argued
that
this
amount,
in
cash,
was
used
for
the
purchase
by
company
2319
of
the
Centre
commercial
Place
Duvernay
(“Place
Duvernay’’)
located
at
Beloeil,
Quebec
on
June
2,
1986.
Until
then
the
building
had
been
the
property
of
Steluta
Constantinescu
(“the
seller”).
The
appellant
began
negotiations
with
the
latter’s
son,
Christian
Bota,
and
concluded
an
agreement
on
the
transaction
with
him.
The
respondent
relied
on
ss.
3,
15(1),
152(4)
and
(7),
163(2)
and
245(2)
as
well
as
on
ss.
5(1
)(a)
and
6(1
)(a)
of
the
Act
as
applicable
in
the
1986
taxation
year.
For
the
purposes
of
making
this
assessment
the
Minister
assumed
the
facts
set
out
in
subparagraphs
(a)
to
(q)
of
paragraph
25
of
the
Amended
Reply
to
the
Amended
Notice
of
Appeal
(“the
Reply”).
Those
subparagraphs
read:
[TRANSLATION]
(a)
in
1986
the
appellant
was
a
shareholder
in
the
company
1864-2470
Québec
Inc.
among
others,
which
was
in
turn
a
shareholder
in
the
company
2319-6322
Québec
Inc.;
(b)
in
1986
the
appellant
was
with
Pierre
Charron
a
director
of
2319-6322
Québec
Inc.;
(c)
on
June
2,
1986
2319-6322
Québec
Inc.
purchased
a
shopping
centre,
“Place
Duvemay’’,
located
in
Beloeil,
Quebec;
(d)
the
appellant
alleged
that
this
shopping
centre
was
purchased
by
2319-
6322
Québec
Inc.
for
$1,075,000,
$195,000
of
which
was
paid
to
the
seller
in
cash;
(e)
the
actual
price
paid
by
2319-6322
Québec
Inc.
for
purchasing
the
shopping
centre
was
$880,000,
not
$1,075,000
as
alleged
by
the
appellant;
(f)
on
April
25,
1986
2319-6322
Québec
Inc.
made
a
purchase
offer,
accepted
the
same
day,
to
purchase
the
Place
Duvernay
shopping
centre
for
an
initial
price
of
$935,000,
broken
down
as
follows:
|
Deposit
with
purchase
offer:
|
$
10,000
|
|
Payment
by
cheque
to
notary
at
time
|
$295,000
|
|
deed
of
sale
signed
|
|
|
Assumption
of
first
mortgage
(in
favour
|
$425,000
|
|
of
General
Trust)
|
|
|
Assumption
of
second
mortgage
|
$205,000
|
|
(balance
of
selling
price
to
129
627
|
|
|
Canada
Ltée)
|
|
|
TOTAL
|
$935,000
|
(g)
on
May
22,
1986
an
addendum
was
added
to
the
purchase
offer
of
April
25,
1986,
to
the
effect
that
the
seller
would
repay
the
second
mortgage
itself,
and
in
return
the
buyer
would
increase
the
amount
payable
on
signature
of
the
contract
of
sale
by
$150,000;
(h)
this
alteration
was
made
necessary
by
the
second
mortgage
creditor’s
refusal
to
transfer
his
debt
to
the
new
purchaser;
(i)
the
selling
price
payable
by
2319-6322
Québec
Inc.
was
accordingly
|
reduced
to
$880,000,
broken
down
as
follows:
|
|
|
Deposit
with
purchase
offer
|
$
10,000
|
|
Payment
by
cheque
to
notary
|
$445,000
|
|
Assumption
of
first
mortgage
|
$425,000
|
|
TOTAL
|
$880,000
|
(j)
although
the
notarial
contract
of
June
2,
1986
indicated
a
selling
price
of
$1
and
other
consideration,
Pierre
Charron,
who
was
at
the
time
authorized
to
act
for
2319-6322
Québec
Inc.,
admitted
in
the
statement
of
adjustments
prepared
by
the
notary
that
the
actual
selling
price
was
$880,000;
(k)
the
seller
(whether
personally
or
through
its
real
estate
broker
or
notary)
received
nothing
in
cash
on
the
sale
of
the
shopping
centre;
(l)
on
March
13,!
1986
the
appellant
withdrew
$100,000
from
a
bank
account
of
2319-6322
Québec
Inc.
(with
the
National
Bank);
(m)
in
March
and
April
1986
the
appellant
also
appropriated
sums
totalling
$25,000
belonging
to
1860-2470
Québec
Inc.;
(n)
1860-2470
Québec
Inc.
had
itself
obtained
this
money
from
different
sources,
among
which
a
withdrawal
from
Bar
Salon
Chez
Aimé
Inc.
(March
24,
1986)
and
a
loan
from
Servibec
Gestion
Alimentaire
Inc.
(April
25,
1986),
two
companies
in
which
the
appellant
was
a
shareholder
and/or
director;
(o)
the
appellant
could
not
justify
these
disbursements
and,
in
particular,
did
not
show
he
had
paid
these
amounts
in
cash
to
anyone
at
the
time
the
Place
Duvernay
shopping
centre
was
purchased
by
2319-6322
Québec
Inc.;
(p)
the
appellant
did
not
report
in
his
tax
return
for
the
1986
taxation
year
income
totalling
$125,000
appropriated
from
these
companies;
(q)
the
appellant
acted
knowingly
or
in
circumstances
amounting
to
gross
negligence
in
failing
to
report
this
income,
which
permits
reopening
of
a
prescribed
year
and
imposition
of
the
penalties
specified
in
s.
163(2)
of
the
Income
Tax
Act.
Further,
paragraph
26
of
the
said
Reply
reads:
[TRANSLATION]
26.
On
October
25,
1994
the
company
2319-6322
Québec
Inc.
pleaded
guilty
to
a
criminal
charge
of
attempting
to
avoid
paying
tax
incurred
as
a
result
of
the
resale
in
1989
of
the
Place
Duvernay
shopping
centre
in
Beloeil,
by
overestimating
the
price
paid
by
it
when
the
said
shopping
centre
was
purchased
in
1986.
Several
documents
were
entered
in
evidence
to
show
the
origins
of
an
aggregate
of
$205,000
in
cash
(including
the
sum
of
$125,000
which
is
the
subject
of
the
instant
case)
which,
according
to
the
appellant,
was
used
to
purchase
Place
Duvemay.
This
amount
allegedly
came
from
share
subscriptions
to
the
capital
stock
of
company
2319
by
Les
Investissements
Picha
Inc.
(“the
Picha
company”)
($25,000),
company
1864
($25,000),
Servibec
(G.A.)
Inc.
(“the
Servibec
company”)
($55,000)
and
Investissements
Rioca
Ltée
(“the
Rioca
company”)
($100,000).
Despite
the
explanations
provided
by
the
appellant
it
is
still
difficult
to
establish
an
exact
chronology
of
the
events
and
to
identify
through
a
series
of
transactions
not
only
the
use
of
various
amounts
of
money
but
also
their
origins.
In
any
case,
as
it
is
the
use
of
the
money
which
is
at
issue,
I
will
only
discuss
in
this
regard
the
points
which
I
feel
are
essential
to
its
solution.
To
understand
the
part
played
by
various
individuals
it
is
worth
mentioning
that
Pierre
Charron
was
the
sole
shareholder
and
director
of
the
Picha
company
and
the
appellant
was
the
sole
shareholder
and
director
of
company
1864.
Further,
Mr.
Charron,
the
appellant
and
one
Yves
Bourassa
were
shareholders
and
directors
of
the
Servibec
company.
Foreign
investors
were
shareholders
in
the
Rioca
company
and
one
Félix
Hervé
was
apparently
one
of
its
directors.
The
Servibec
company
was
a
majority
shareholder
in
company
2319
and
the
appellant
was
the
secretary-treasurer
of
both
companies.
He
was
apparently
one
of
the
prime
movers
in
company
2319,
in
which
he
was
actively
involved,
and
was
made
responsible
by
the
representatives
of
other
shareholders
for
locating
real
estate
investments
for
that
company.
Despite
the
fact
that
the
appellant
negotiated
by
himself
the
purchase
of
Place
Duvernay
for
company
2319
with
the
real
estate
broker,
Mr.
Bota,
it
was
Mr.
Charron
who
signed
the
notarial
contract
of
June
2,
1986
and
the
statement
of
adjustments
and
disbursements
prepared
by
the
notary
Michel
Paquette.
In
his
testimony
Mr.
Charron
maintained
that
he
was
himself
responsible
for
locating
$80,000
of
the
total
sum
of
$205,000.
Accordingly,
$55,000
had
to
come
from
him
personally
or
from
the
Picha
company.
As
he
did
not
have
$25,000
at
his
disposal
Mr.
Charron
stated
that
it
was
borrowed
from
the
Rioca
company.
For
his
part,
the
appellant
said
he
was
responsible
for
obtaining
$125,000,
$25,000
contributed
personally
or
by
company
1864
and
$100,000
by
the
Rioca
company.
The
appellant
said
he
accumulated
the
sum
of
$205,000
in
$1,000
notes
from
the
following
sources:
$
1,000
already
in
his
possession
$
9,000
from
a
withdrawal
of
cash
on
March
24,
1986
from
the
account
of
Bar
Salon
Aimé
Inc.,
in
which
he
was
also
a
shareholder
and
director
(Exhibit
A-2,
tab
13);
$
15,000
from
a
withdrawal
of
cash
from
the
bank
account
of
company
1864
(a
loan
by
the
Servibec
company,
cashed
on
April
25,
1986)
(Exhibit
A-2,
tab
12);
$100,000
from
a
withdrawal
of
cash
on
May
13,
1986
from
the
bank
account
of
company
2319
(Exhibit
A-2,
tab
14);
$
25,000
delivered
in
$1,000
bills
by
Mr.
Charron
at
an
unspecified
date;
$
55,000
delivered
in
$1,000
bills
by
Mr.
Charron
on
June
2,
1986,
the
same
day
as
the
transaction
before
the
notary
and
taken
from
a
withdrawal
dated
May
29,
1986
(Exhibit
A-2,
tab
15).
The
respondent
does
not
dispute
that
the
appellant
and
Mr.
Charron
had
an
amount
of
$205,000
in
their
hands,
the
appellant
$125,000
and
Mr.
Charron
$80,000.
The
respondent
maintains
that
this
sum
of
$205,000
was
never
delivered
to
the
broker
or
to
the
seller
of
Place
Duvemay
and
was
actually
kept
by
the
appellant
and
Mr.
Charron
personally
in
the
proportions
indicated.
The
respondent’s
position
is
therefore
that
the
price
paid
by
company
2319
was
$880,000,
corresponding
to
the
price
mentioned
in
the
document
dealing
with
adjustments
and
disbursements
completed
by
the
notary
Michel
Paquette
and
signed
by
Mr.
Charron
(Exhibit
1-1)
in
connection
with
the
notarial
contract
of
June
2,
1986.
The
reconciliation
would
appear
to
be
as
indicated
in
subparagraph
25(i)
of
the
Reply,
except
that
the
$445,000
delivered
to
the
notary
was
handed
over
in
two
separate
payments,
one
of
$295,000
(Exhibit
A-2,
tab
19)
and
the
other
of
$150,000
(Exhibit
A-2,
tab
7).
To
this
sum
of
$445,000
should
be
added
the
$10,000
deposited
with
the
purchase
offer
and
the
transfer
of
the
first
mortgage
debt
amounting
to
$425,000,
making
a
total
of
$880,000.
The
contract
itself
indicated
that
the
sale
was
made
for
a
price
of
$1
and
other
good
and
valuable
consideration
as
indicated
in
the
offer
of
April
25,
1986.
However,
in
the
clause
relating
to
the
real
estate
transfer
tax,
it
is
mentioned
that
the
transferor
and
transferee
set
the
value
of
the
consideration
at
$800,000
(Exhibit
A-2,
tab
10).
As
we
know,
the
appellant
maintained
that
the
total
price
paid
was
$1,075,000,
that
is,
the
price
shown
in
the
first
purchase
offer
dated
April
23,
1986
and
accepted
on
April
24,
1986
(Exhibit
A-2,
tab
4).
In
his
submission,
an
envelope
containing
195
$1,000
bills
was
given
to
Mr.
Bota
and
then
by
him
to
the
seller
in
the
notary’s
anteroom
on
signature
of
the
deed
of
sale
on
June
2,
1986.
The
$10,000
balance
was
used
to
pay
the
notary’s
fees
and
expenses
of
some
$6,000
to
$7,000,
and
the
remainder
retained
by
the
appellant
to
cover
expenses
incurred
in
connection
with
purchasing
the
property.
The
initial
agreement
with
Mr.
Bota
was
allegedly
to
pay
$140,000
to
the
seller
in
cash.
The
appellant
later
agreed
to
pay
an
additional
amount
of
$55,000.
The
appellant
stated
that
when
the
envelope
containing
the
195
$1,000
bills
was
delivered
to
Mr.
Bota
the
latter
examined
its
contents
without
counting
the
bills
and
handed
the
envelope
to
the
seller,
who
simply
put
it
in
her
handbag.
Mr.
Bota
then
tore
up
a
sealed
envelope
containing
a
counter-letter
which
the
appellant
had
himself
signed
and
in
which
he
undertook
to
pay
this
amount
of
$195,000.
In
an
extrajudicial
examination
held
on
April
25,
1996
the
appellant
mentioned
that
the
agreement
with
Mr.
Bota
to
initially
pay
the
sum
of
$140,000
in
cash
was
strictly
verbal.
The
following
is
a
passage
from
his
testimony
in
this
connection:
[TRANSLATION]
129
Q.
Was
there
any
document
which
bound
you
to
pay
that
amount
of
$140,000?
A.
No.
130
Q.
It
was
just
on
a
handshake,
right?
A.
It
was
agreed
that
the
payment
would
be
made
when
the
notarial
contract
was
signed.
131
Q.
Okay
-
but
the
agreement
was
verbal?
A.
Right.
Although
there
were
no
direct
questions
on
the
existence
of
a
counterletter,
at
no
time
in
this
extrajudicial
examination
did
the
appellant
allude
to
the
existence
of
any
document
regarding
an
agreement
to
first
pay
the
sum
of
$140,000
in
cash
and
then
a
further
sum
of
$55,000,
or
a
total
of
$195,000.
According
to
Yvon
L’Ecuyer,
a
Revenue
Canada
investigator,
it
was
$205,000,
not
$195,000,
that
the
appellant
told
him
he
handed
over
in
cash
when
the
agreement
was
signed
before
the
notary.
A
sheet
setting
out
the
total
amount
paid
was
given
to
him
at
that
time
by
the
appellant
(Exhibit
I-
4).
Further,
as
the
appellant
stated
that
the
total
price
paid
was
$1,075,000
he
concluded
that
the
latter
had
made
an
error
of
$10,000
since
an
equivalent
amount
had
already
been
handed
over
as
a
deposit
at
the
time
of
the
first
offer
at
the
price
of
$1,075,000,
which
would
thus
have
made
the
total
price
paid
$1,085,000.
Further,
according
to
Mr.
L’Ecuyer,
the
appellant
did
not
give
him
the
right
documentation
to
support
the
contribution
by
the
Servibec
company.
These
documents
were
filed
as
Exhibit
1-3.
There
was
cheque
No.
1438
from
the
Servibec
company
for
$50,000,
dated
May
29,
1986
and
made
out
to
company
2319,
and
cashed
by
it
on
May
30.
The
other
cheque
from
the
Servibec
company
made
out
to
“Servibec
G.A.
Inc.”
on
May
15,
1986
for
$5,200
was
deposited
the
same
day.
In
actual
fact,
it
was
another
cheque
from
the
Servibec
company
(No.
1439)
dated
May
29,
1986
for
$55,000,
and
not
discovered
until
a
search
was
made
in
1992
(Exhibit
A-2,
tab
15),
which
was
allegedly
used
in
the
transaction.
This
cheque,
made
out
to
“Cash”,
bore
on
the
reverse
the
stamp
“2319-6322
Québec
Inc.”
and
the
handwritten
notations
“RE:
B.v.
Beloeil”
and
“bank
draft
38410749”.
According
to
Mr.
L’Ecuyer,
the
draft
was
purchased
on
June
2,
1986,
the
same
day
as
the
transaction.
This
point
was
not
disputed.
Further,
according
to
Mr.
L’Ecuyer
the
$25,000
contribution
by
the
Picha
company
could
not
be
supported
by
the
document
given
to
him
by
Mr.
Charron.
The
document
was
a
cheque
drawn
on
the
Rioca
company’s
account,
payable
to
“Cash”,
dated
June
25,
1986
and
cashed
on
June
27.
The
cheque
bore
the
notation
“Loan”.
The
transaction
requiring
the
$25,000
contribution
by
the
Picha
company
or
Mr.
Charron
took
place
on
June
2,
1986.
If
Mr.
Charron
or
the
Picha
company
had
actually
borrowed
from
the
Rioca
company
in
order
to
make
a
contribution,
there
was
no
evidence
that
the
proceeds
of
this
loan
were
given
to
the
appellant
in
cash
before
the
transaction.
This
leads
me
to
briefly
discuss
the
criminal
proceedings
brought
against
company
2319,
Mr.
Charron
and
the
appellant,
referred
to
by
Mr.
L’Ecuyer
in
connection
with
the
transaction
which
is
at
issue
in
this
Court.
The
information
obtained
by
Mr.
L’Ecuyer
from
the
seller
in
a
telephone
conversation
and
from
her
son
Mr.
Bota,
whom
he
met
with
several
times,
was
that
the
price
paid
was
$880,000.
This
information
was
also
confirmed
by
the
notary
Paquette,
who
made
adjustments
and
disbursements
on
this
basis.
As
company
2319
stated
that
it
paid
$1,075,000,
it,
Mr.
Charron
and
the
appellant
were
prosecuted
under
s.
239(1
)(a)
and
(d)
of
the
Act.
Subsequently,
during
a
search
at
the
premises
of
the
broker
Les
Immeubles
Gloria
Realties
(“Immeubles
Gloria”),
for
which
Mr.
Bota
worked,
a
document
was
seized
indicating
the
selling
price
as
$880,000,
but
under
the
notation
“Highly
Confidential”
a
price
of
$935,000.
Further,
cheque
No.
1439
from
the
Servibec
company,
dated
May
29,
1986
and
for
$55,000,
used
to
purchase
a
draft
and
bearing
the
notation
"RE:
B.v.
Beloeil”,
obtained
in
1992
(Exhibit
A-2,
tab
15),
also
suggested
that
the
price
actually
paid
was
$935,000,
not
$880,000.
In
his
testimony
Mr.
L’Ecuyer
suggested
that
perhaps
the
draft
so
purchased
was
given
to
the
seller
or
to
one
Jean
Fortin,
who
held
an
advantageous
lease
for
several
years,
and
whose
rights
the
seller,
in
the
addendum
signed
on
May
22,
1986
(Exhibit
A-2,
tab
7),
had
undertaken
to
buy
back
and
that
this
was
done
officially
for
the
sum
of
$1
(Exhibit
A-2,
tab
9).
On
the
same
day
as
the
criminal
proceeding,
as
part
of
an
agreement
negotiated
by
counsel-and
accepted
by
Mr.
Charron
and
the
appellant,
among
others,
company
2319
pleaded
guilty
to
an
offence
under
s.
239(1)(d)
of
the
Act
and
had
to
pay
a
fine
of
a
little
over
$17,000.
The
prosecution
under
s.
239(1
)(a)
was
dropped,
as
were
the
charges
against
Mr.
Charron
and
the
appellant.
In
the
civil
proceeding
the
assessment
against
Mr.
Charron
was
reduced
by
$55,000,
and
he
agreed
for
what
he
Said
were
personal
and
business
reasons
to
be
assessed
on
the
sum
of
$25,000.
The
appellant’s
assessment
for
an
appropriation
of
$125,000
was
maintained,
as
he
wished
to
exercise
his
right
of
appeal
on
the
total
amount
assessed:
hence
the
proceeding
in
this
Court.
In
the
appellant’s
submission,
the
market
at
the
time
was
a
“sellers’
market”
and
the
price
asked
for
Place
Duvemay
was
$1,250,000.
In
support
of
his
position
that
a
price
of
$1,075,000
was
paid
the
appellant
referred
also
to
a
valuation
by
Canada
Life
Mortgage
Services
Ltd.
(“Canada
Life”)
in
January
1987
for
refinancing
purposes
which
indicated
a
value
of
$1,217,000
(Exhibit
A-2,
tab
11).
The
document
also
indicated
a
purchase
price
of
$1,075,000.
The
appellant
admitted
that
he
had
himself
provided
this.
information.
The
appellant
argued
that
only
the
first
offer,
at
a
price
of
$1,075,000,
dated
April
23,
1986
and
accepted
the
following
day,
was
valid.
That
offer,
of
which
he
was
the
only
one
to
retain
a
copy,
accompanied
by
a
$10,000
deposit,
he
said
was
accepted
despite
the
fact
that
the
price
asked
was
$1,250,000,
on
condition
that
part
of
the
price
would
be
paid
in
cash.
He
said
Mr.
Bota
initially
asked
him
to
pay
$140,000,
and
this
explained
why
on
April
25,
1986
another
offer,
of
$935,000
this
time,
was
made
and
accepted
the
same
day.
According
to
the
appellant,
the
reason
given
by
Mr.
Bota
for
asking
for
cash
to
be
paid
was
that
he
did
not
want
the
price
officially
paid
to
appear
too
high
to
the
preceding
owner,
Jean
Fortin,
whom
he
had
represented
when
Place
Duvernay
was
sold
to
his
mother
a
few
months
earlier
(see
Exhibit
A-3,
tab
6,
examination
for
discovery,
pp.
13
et
seq.).
He
said
a
further
amount
of
$55,000
in
cash
was
subsequently
requested,
so
that
the
price
officially
paid
was
lowered
to
$880,000.
This
amount
was
needed
in
order
to
buy
back
the
rights
to
an
advantageous
lease
given
by
the
seller
to
the
preceding
owner,
Mr.
Fortin.
According
to
the
appellant,
Mr.
Fortin
had
a
lease
for
several
years
at
an
advantageous
price
and
was
himself
subletting
to
a
third
party,
a
company,
at
a
much
higher
price.
Initially
company
2319
was
interested
in
having
the
two
existing
mortgages
transferred
to
it,
including
a
second
mortgage
of
$205,000
to
the
preceding
owner,
Mr.
Fortin.
When
the
latter
refused,
an
addendum
to
the
offer
of
April
25,
1986
was
signed
by
the
parties
on
May
22,
1986
(Exhibit
A-2,
tab
7).
It
indicated
that
the
purchaser
would
pay
an
additional
$150,000
on
signature
of
the
deed
of
sale
and
that
the
seller
undertook
to
have
the
balance
of
$205,000,
secured
by
a
second
mortgage,
struck
out.
Further,
in
this
addendum
the
seller
undertook
to
buy
back
the
rights
to
the
lease
signed
between
herself
and
the
former
owner
Mr.
Fortin,
as
well
as
a
lease
signed
between
the
latter
and
a
third
party.
At
my
express
request
Mr.
Bota
also
testified.
However,
his
testimony
certainly
did
not
throw
any
light
on
the
events
that
occurred.
While
admitting
that
his
mother
had
initially
accepted
a
purchase
offer
of
$1,075,000,
when
the
asking
price
was
$1,250,000,
he
stated
that
the
selling
price
was
$880,000
since
there
was
a
lot
of
negotiation
up
to
the
time
the
agreement
was
signed
before
the
notary.
While
he
admitted
that
it
was
“a
sellers’
market”
at
that
time,
he
gave
as
a
reason
for
the
reduction
in
price
the
fact
that
Mr.
Fortin
had
refused
the
transfer
of
his
mortgage
debt,
the
issue
of
Mr.
Fortin’s
advantageous
lease
had
been
resolved
and
that
there
was
also
a
problem
of
illegal
views.
Apart
from
that,
he
could
not
explain
the
various
changes
made
to
the
initial
offer
and
the
precise
effects
on
the
purchase
price.
He
said
he
did
not
remember
the
details
and
could
not
explain
the
reason
for
the
notation
in
a
document
from
Immeubles
Gloria
of
a
price
of
$880,000
and
a
“Highly
Confidential”
price
of
$935,000.
He
further
stated
that
he
did
not
receive
any
cash
or
see
an
envelope
containing
it.
He
then
said
he
did
not
remember
whether
his
mother
had
received
cash,
but
it
was
possible
just
as
there
may
have
been
an
envelope,
but
he
finally
concluded
that
this
was
not
so.
The
appellant’s
argument
that
he
accumulated
$205,000
in
$1,000
bills
rested
in
part
on
his
version
of
a
banking
transaction
which
took
place
on
May
13,
1986
at
the
Lyon
service
centre
(“Lyon
centre”)
connected
to
the
Place
Désormeaux
branch
of
the
National
Bank
of
Canada
(“the
National
Bank”)
in
Longueuil.
In
return
for
a
receipt
signed
by
him
for
the
sum
of
$100,000
and
indicating
the
bank
account
of
company
2319
(Exhibit
A-2,
tab
14;
Exhibit
1-5),
the
appellant
said
he
obtained
100
$1,000
bills.
He
said
these
bills
had
been
ordered
directly
from
the
manager
about
two
weeks
before.
He
stated
that
it
was
she,
or
possibly
a
cashier,
who
gave
him
the
bills
on
May
13,
1986.
Counsel
for
the
respondent
called
Danielle
Savard
to
testify
regarding
this
transaction.
Ms.
Savard,
who
now
holds
a
position
of
manager
-
cash
flow
for
the
Fédération
Richelieu-Yamaska,
worked
for
the
National
Bank
for
16
years,
until
1988.
In
1986
she
was
in
charge
of
the
Lyon
centre.
At
that
time
the
Lyon
centre
had
six
or
seven
employees
and
Ms.
Savard
was
assisted
in
her
duties
by
Ms.
Denise
Comeau,
an
assistant
accountant
at
the
time.
Regarding
the
transaction
of
May
13,
1986,
Ms.
Savard
admitted
that
the
receipt
or
withdrawal
slip
in
question
did
indicate
from
the
numbers
shown
on
the
stamps
that
the
transaction
took
place
at
the
Lyon
centre.
However,
she
noted
that
the
document
was
not
initialled
by
herself,
which
would
ordinarily
have
been
the
case
if
she
had
been
at
work
on
that
day.
She
could
not
identify
the
person
whose
initials
appeared
on
the
front
of
the
document.
At
the
same
time,
she
readily
recognized
her
own
initials
on
a
cheque
for
$100,000
drawn
on
an
account
in
the
name
of
the
Rioca
company
at
the
Canadian
Imperial
Bank
of
Commerce
(“the
Bank
of
Commerce”)
and
deposited
at
the
Lyon
centre
two
days
later,
namely
May
15,
1986
(Exhibit
1-6).
Ms.
Savard
stated
that
the
Lyon
centre
did
not
keep
$1,000
bills
in
reserve
and,
although
it
was
possible
to
have
a
transaction
of
this
size
in
cash,
the
bills
had
to
be
ordered
in
advance
from
the
main
branch
after
the
relevant
information
was
obtained
from
the
customer,
since
control
had
to
be
maintained
over
large
transactions
in
$1,000
bills.
After
having
explained
the
procedure
for
ordering
cash,
the
signatures
of
two
persons
required,
including
that
of
Denise
Cotnoir-Comeau
(“Ms.
Comeau”),
or
her
own,
the
checking
of
the
delivery
of
bills
at
the
centre
by
at
least
two
people
and
the
control
over
the
cash
reserve,
Ms.
Savard
concluded
that
she
would
ordinarily
have
been
aware
of
such
a
transaction
even
if
she
was
away
on
the
day
itself.
Without
stating
categorically
that
such
a
transaction
never
occurred,
she
said
she
did
not
remember
delivering
100
$1,000
bills
to
the
appellant,
nor
did
she
remember
the
appellant.
On
the
other
hand,
she
said
she
remembered
details
and
even
the
name
of
a
customer
who
had
had
a
transaction
involving
$50,000
in
$1,000
bills,
the
largest
that
she
had
witnessed.
Finally,
Ms.
Savard
stated
that
if
there
had
been
100
$1,000
bills
in
the
reserve
she
would
certainly
have
seen
it
because
of
the
controls
in
place.
She
suggested
that
if
the
withdrawal
was
not
made
in
cash
it
was
done
by
the
issuing
of
a
bank
draft.
Although
she
admitted
that
it
was
a
more
common
type
of
transaction,
Ms.
Savard
did
not
remember
issuing
a
draft
for
this
amount
on
May
13,
1986.
As
Ms.
Savard’s
initials
do
not
appear
on
the
receipt
or
withdrawal
slip
of
May
13,
1986,
although
they
should
have
been
there
if
she
was
at
work,
it
can
certainly
be
inferred
that
she
may
have
been
absent
on
the
day
in
question.
However,
as
she
was
at
work
two
days
later
her
comments
regarding
the
various
controls
exercised
over
the
cash
reserve
at
the
centre
managed
by
her
are
more
consistent
with
the
assumption
that
a
cash
transaction
of
that
size
could
not
have
passed
unnoticed
without
her
being
directly
or
indirectly
aware
of
it.
The
controls
are
applied
at
various
stages
over
several
days.
Ms.
Comeau
also
testified.
Ms.
Comeau
has
worked
for
the
National
Bank
since
1970
and
is
currently
the
Director
of
Financial
Services.
In
May
1986
she
held
the
position
of
assistant
accountant
at
the
Lyon
centre,
where
she
had
begun
her
duties
a
short
time
earlier.
Ms.
Comeau
explained
that
it
was
she
who
looked
after
cash
orders
each
week
and
that
if
the
withdrawal
of
May
13,
1986
was
made
by
the
issuing
of
100
$1,000
bills,
she
would
certainly
have
been
informed
and
would
remember
a
transaction
of
that
size,
as
it
would
have
required
a
special
order
for
which
she
was
responsible,
even
though
the
order
might
have
been
signed
by
the
accounting
assistant
if
she
had
been
away
temporarily.
Ms.
Comeau
stated
that
the
largest
transaction
involving
$1,000
bills
that
she
witnessed
in
her
career
involved
10
or
12
bills
of
that
denomination.
She
therefore
concluded
that
the
withdrawal
of
May
13,
1986
“absolutely”
could
not
have
been
made
in
cash
and
indicated
that
the
only
possibility
could
have
been
the
issuing
of
a
draft
that
required
the
signature
of
a
manager
and
of
another
authorized
person.
Ms.
Comeau
further
explained
that
the
withdrawal
slip
itself
had
to
be
initialled
by
a
manager.
As
an
assistant
accountant,
she
did
not
have
the
power
to
do
it.
She
said
she
did
not
recognize
the
initials
on
the
receipt
or
withdrawal
slip
(Exhibit
1-5),
adding
that
at
the
time
she
had
been
performing
her
duties
at
the
Lyon
centre
for
only
a
short
time.
She
said
they
might
be
the
initials
of
a
replacement
manager
because,
when
the
director
of
the
service
centre,
the
only
official
manager,
was
absent,
the
branch
to
which
the
centre
was
attached
sent
another
manager
to
replace
her.
According
to
Ms.
Comeau,
as
there
always
had
to
be
a
manager
at
the
centre,
this
was
a
procedure
which
was
used
regularly
if
the
responsible
manager
was
on
training
or
was
ill.
To
conclude
on
this
point,
it
may
be
noted
that
the
bank
statement
of
company
2319
for
the
period
in
question
(Exhibit
A-7)
does
indicate
the
withdrawal
of
$100,000
on
May
13,
1986,
but
no
administration
fees
are
shown
for
that
date.
However,
as
Ms.
Comeau
pointed
out,
the
fees
for
issuing
a
draft
at
that
time
might
vary
between
$7.50
and
$15
and
could
have
been
paid
in
cash.
Ms.
Comeau’s
testimony,
though
more
forthright,
nonetheless
essentially
supported
that
of
Ms.
Savard.
On
March
2,
1992
Revenue
Canada
sent
a
requirement
for
information
and
the
production
of
documents
to
the
director
of
the
Place
Désormeaux
branch
in
Longueuil
with
respect
to
company
2319,
Mr.
Charron
and
the
appellant
(Exhibit
1-7)
with
a
view
to
locating
the
draft.
The
answer
given
was
that
the
branch
had
no
records
in
the
case
of
Mr.
Charron
and
the
appellant
and
that,
in
the
case
of
company
2319,
the
documentation
had
been
destroyed
(Exhibit
I-8).
My
only
comment
on
this
point
is
that
as
a
draft
was
issued
by
the
financial
institution
and
drawn
on
itself
the
request
to
locate
the
documents
in
the
names
of
Mr.
Charron,
the
appellant
or
company
2319
was
clearly
made
to
the
wrong
addressee
or
in
the
wrong
way.
In
the
recent
Supreme
Court
of
Canada
judgment
in
Hickman
Motors
Ltd.
v.
R.,
[1997]
2
S.C.R.
336
(S.C.C.),
L’Heureux-Dubé
J.
noted
the
following
at
378:
It
is
trite
law
that
in
taxation
the
standard
of
proof
is
the
civil
balance
of
probabilities:
Dobieco
Ltd.
v.
Minister
of
National
Revenue,
[1966]
S.C.R.
95,
and
that
within
balance
of
probabilities,
there
can
be
varying
degrees
of
proof
required
in
order
to
discharge
the
onus,
depending
on
the
subject
matter:
Continental
Insurance
Co.
v.
Dalton
Cartage
Co.,
[1982]
1
S.C.R.
164;
Pallan
v.
M.N.R.,
90
D.T.C.
1102
(T.C.C.),
at
p.
1106.
In
Pallan
v.
Minister
of
National
Revenue
(1989),
90
D.T.C.
1102
(T.C.C.),
referred
to
by
L’Heureux-Dubé
J.,
taxpayers
sought
to
submit
oral
evidence
to
contradict
what
they
had
agreed
on
in
documents
prepared
to
achieve
certain
business
objectives
but
entailing
adverse
tax
consequences.
Judge
Christie
of
this
Court
emphasized
that
the
evidence
presented
was
insufficient
and
dismissed
the
appeals.
His
conclusion
was
in
the
following
language,
taken
directly
from
the
wording
of
the
reasons
for
judgment
at
p.
1107
(adding
the
text
of
the
official
French
translation
at
p.
13):
It
must
be
understood
that
if
taxpayers
create
a
documented
record
of
things
said
and
done
by
them,
or
by
them
in
concert
with
others,
to
achieve
a
commercial
purpose
and
then
seek
to
repudiate
those
things
with
evidence
of
allegations
of
conduct
that
is
morally
blameworthy
in
order
to
avoid
an
unanticipated
assessment
to
tax,
they
face
a
formidable
task.
And
that
task
will
not
be
accomplished,
in
the
absence
of
some
special
circumstance,
an
example
of
which
does
not
occur
to
me,
by
their
oral
testimony
alone.
That
evidence
must
be
bolstered
by
some
other
evidence
that
has
significant
persuasive
force
of
its
own.
The
appellants
have
not
done
this.
Il
faut
comprendre
que,
si
les
contribuables
créent
un
dossier
écrit
de
choses
qu'ils
ont
dites
et
faites,
que
ce
soit
seuls
ou
de
concert
avec
d’autres,
pour
atteindre
un
but
commercial
et
qu’ils
cherchent
ensuite
à
répudier
ces
choses
en
alléguant
que
la
conduite
était
moralement
blâmable
afin
d’éviter
une
cotisation
d’impôt
qui
n’avait
pas
été
prévue,
ils
auront
fort
à
faire
pour
réussir.
De
plus,
en
l’absence
de
circonstance
spéciale
dont
aucun
exemple
ne
me
vient
à
l’esprit,
ils
ne
pourront
le
faire
en
présentant
uniquement
leur
témoignage.
Cette
preuve
doit
être
appuyée
par
d’autres
éléments
qui
ont
eux-mêmes
une
grande
force
persuasive.
Les
appelants
ne
l’ont
pas
fait.
Although
the
situation
was
different
in
Kiliaris
c.
R,
(1996),
97
D.T.C.
7
(T.C.C.),
a
similar
approach
could
nevertheless
be
seen
on
the
part
of
the
taxpayers,
who
adopted
a
position
contrary
to
their
earlier
contentions.
Referring
to
Judge
Christie’s
decision
in
Pallan,
supra,
I
said
in
that
case
that
in
such
circumstances:
...it
is
natural
not
only
that
their
testimony
be
accepted
with
the
greatest
caution,
but
also
that
the
facts
adduced
in
evidence
carry
a
high
degree
of
probability
independently
of
their
testimony.
In
my
opinion,
the
circumstances
of
the
instant
case
justify
requiring
the
same
thing
from
the
appellant,
although
it
must
be
admitted
that
the
respondent
had
the
burden
of
establishing
on
a
balance
of
probabilities
the
facts
forming
the
basis
for
an
assessment
after
the
usual
reassessment
period
and
for
adding
a
penalty
pursuant
to
s.
163(2).
Counsel
for
the
appellant
maintained
that
the
approach
taken
by
counsel
for
the
respondent
and
the
Revenue
Canada
representatives
can
only
be
described
as
“biased”
throughout
this
matter,
since
he
said
they
immediately
accepted
the
version
of
the
seller
and
of
Mr.
Bota
and,
in
the
face
of
all
logic,
rejected
that
of
the
appellant.
What
is
more,
according
to
counsel
for
the
appellant,
this
attitude
was
reflected
in
the
fact
that
counsel
for
the
respondent
did
not
initially
bother
to
call
the
seller
and
Mr.
Bota
to
testify.
It
is
important
to
restore
some
perspective
here.
First,
the
appellant
himself
signed
not
only
the
initial
purchase
offer
of
$1,075,000,
an
offer
which
he
said
was
the
only
valid
one,
but
also
the
second
offer
at
$935,000
and
the
addendum
of
May
22,
1986,
the
effect
of
which
was
to
reduce
the
price
in
the
transaction
to
$880,000.
Additionally,
it
was
his
business
partner
Mr.
Charron
who
signed
the
notarial
contract
of
June
2,
1986,
in
which
it
was
mentioned
that
both
the
transferor
and
transferee
set
the
value
of
the
consideration
for
purposes
of
the
transfer
tax
at
$800,000.
It
was
also
Mr.
Charron,
not
merely
the
seller,
who
in
signing
the
statement
of
adjustments
and
disbursements
prepared
by
the
notary
certified
that
the
price
actually
paid
by
company
2319
was
$880,000.
Mr.
Charron
and
the
appellant
subsequently
sought
to
repudiate
all
these
documents
by
alleging
that
the
price
had
been
$1,075,000.
In
such
circumstances,
the
position
taken
by
the
respondent,
who
acted
on
the
basis
of
the
documents
signed
by
the
interested
parties
themselves,
is
not
surprising.
As
to
the
question
of
testimony,
I
will
simply
mention
that
Mr.
Bota
was
summoned
and
remained
available
to
testify.
Counsel
for
the
respondent
explained
that
he
had
decided
not
to
call
him
because
he
considered
the
evidence
already
submitted
to
be
sufficiently
persuasive.
In
response
to
my
request,
he
agreed
to
call
him
without
hesitation.
It
was
thus
not
at
the
request
of
counsel
for
the
appellant
that
Mr.
Bota
testified.
As
to
the
seller,
none
of
the
parties
saw
fit
to
summon
her
to
testify.
In
any
case
it
is
uncertain
that
we
might
learn
anything
from
her
testimony,
since
the
appellant
said
he
had
only
seen
her
once
when
the
contract
was
signed
before
the
notary
and
had
always
negotiated
exclusively
with
Mr.
Bota
and
reached
an
agreement
solely
with
him.
Having
said
that,
a
review
of
the
evidence
as
a
whole
leads
me
to
the
conclusion
that
on
a
balance
of
probabilities
I
must
accept
the
version
of
the
facts
submitted
by
the
respondent,
at
least
as
regards
the
greater
part
of
the
amount
assessed.
Certain
evidence
is
undoubtedly
at
variance
with
the
respondent’s
argument
that
the
selling
price
of
Place
Duvernay
was
$880,000.
The
document
seized
at
the
premises
of
Immeubles
Gloria
(Exhibit
A-2,
tab
3)
indicating
under
the
notation
“Highly
Confidential”
a
price
of
$935,000
instead
of
$880,000
mentioned
in
the
same
document
is
the
first
clue
to
this
effect.
Cheque
No.
1439
from
the
Servibec
company
made
out
to
“Cash”
for
$55,000
(Exhibit
A-2,
tab
15)
is
another.
It
will
be
recalled
that
the
back
of
the
cheque
bears
a
stamp
identifying
company
2319
and
the
handwritten
notations
“RE:
B.v.
Beloeil"
and
“bank
draft
38410749”.
These
two
points
suggest
that,
in
addition
to
$880,000,
an
amount
of
$55,000
was
paid.
I
would
add
that
the
sum
of
$935,000
corresponds
also
to
the
second
purchase
offer
made
and
accepted
on
April
25,
1986,
which
in
my
view
officially
superseded
the
one
accepted
for
$1,075,000
on
April
24,
1986.
While
it
is
true
that
at
first
glance
the
reduction
in
price
may
seem
illogical,
certain
problems
arising
following
the
first
offer,
such
as
illegal
views,
which
were
referred
to,
might
justify
a
reduction
in
price
to
$935,000.
If
the
price
paid
was
$935,000,
not
$880,000,
was
the
additional
amount
of
$55,000
paid
to
the
seller
herself
or
actually
to
Jean
Fortin
to
compensate
him
for
surrendering
his
rights
under
the
lease
mentioned
above?
It
is
impossible
for
me
to
answer
this
question,
and
in
fact
it
is
not
necessary
to
do
so
since
it
does
not
alter
the
appellant’s
position
in
any
way.
On
the
evidence,
this
sum
was
under
the
control
of
Mr.
Charron
and
was
not
taken
into
account
in
determining
the
appellant’s
assessment.
It
was
Mr.
Charron
who
was
initially
assessed
for
this
amount.
Cheque
No.
1439
from
the
Servibec
company,
with
the
notations
it
contained,
does
however
cast
serious
doubt
on
the
statement
that
$1,000
bills
were
received
in
consideration,
an
initial
clue
tending
to
undermine
the
plausibility
of
the
appellant’s
position.
To
begin
with,
as
the
cheque
was
made
out
to
“Cash”,
it
is
surprising
to
find
a
stamp
on
the
back
showing
company
2319
and
then
the
notation
“bank
draft
38410749”.
Mr.
Charron
stated
that
he
obtained
55
$1,000
notes
in
return
for
the
cheque
and
gave
them
to
the
appellant
on
the
same
day
as
the
transaction.
It
is
somewhat
difficult
to
see
why
a
withdrawal
from
the
Servibec
company’s
account
bore
the
stamp
of
the
company
2319,
and
then
a
notation
of
the
number
of
a
bank
draft,
if
the
intention
at
the
outset
was
to
obtain
$55,000
in
$1,000
bills.
As
no
adequate
explanation
of
this
was
provided,
I
am
inclined
to
think
that
it
is
more
likely
that
a
draft
was
simply
issued
for
the
amount.
If
Mr.
Charron
did
not
actually
hand
over
55
$1,000
bills
to
the
appellant
the
version
of
the
facts
given
by
the
latter
of
course
cannot
stand,
since
it
would
then
have
been
impossible
for
him
to
accumulate
the
205
$1,000
bills
needed
for
the
transaction.
There
is
other
evidence
pointing
in
the
same
direction.
In
this
case
it
is
the
sum
of
$25,000,
again
in
$1,000
bills,
which
Mr.
Charron
allegedly
gave
the
appellant
on
a
date
which
neither
one
could
identify
exactly.
The
amount
was
allegedly
borrowed
by
Mr.
Charron
or
by
the
Picha
company
from
the
Rioca
company.
The
only
document
entered
in
evidence
to
support
this
fact
was
cheque
No.
0013,
made
out
to
“Cash”
and
drawn
on
an
account
of
the
Rioca
company
with
the
Bank
of
Commerce
for
the
sum
of
$25,500
on
June
25,
1986,
cashed
on
June
27,
1986
with
the
notation
“Loan”.
It
is
quite
clear
that
Mr.
Charron
could
not
have
handed
over
the
sum
of
$25,000
in
$1,000
bills
which
he
would
have
obtained
through
this
transaction
before
the
contract
of
sale
was
signed
at
the
notary’s
office
on
June
2,
1986.
Incidentally,
Mr.
Charron
was
assessed
on
this
amount.
There
is
no
need
to
go
over
the
main
points
of
the
testimony
given
by
Ms.
Savard
and
by
Ms.
Comeau
here.
I
have
no
reason
to
question
their
credibility.
In
my
opinion,
Ms.
Comeau’s
testimony
in
particular
made
it
highly
unlikely
that
there
was
a
withdrawal
of
$100,000
in
$1,000
bills
by
the
appellant
on
May
13,
1986.
Additionally,
the
appellant’s
testimony
regarding
the
existence
of
a
counter-letter
by
which
he
undertook
to
pay
the
sum
of
$195,000
in
cash,
when
he
had
only
mentioned
a
verbal
agreement
with
Mr.
Bota
in
an
extrajudicial
examination,
also
raises
questions.
Differing
stories
regarding
a
fact
which
must
have
been
of
considerable
importance
in
the
circumstances
also
has
an
effect
on
the
credibility
which
I
can
attach
to
the
comments
made
by
the
appellant
on
this
point.
I
attach
little
significance
to
Mr.
Bota’s
testimony
as,
for
the
reasons
I
have
indicated,
I
am
persuaded
that
it
is
more
than
likely
that
a
sum
of
$55,000
was
paid
in
addition
to
the
sum
of
$880,000
for
the
purchase
of
Place
Duvemay.
In
view
of
the
evidence
already
mentioned,
I
would
add
that
the
valuation
obtained
by
the
appellant
from
Canada
Life
for
refinancing
purposes
in
January
1987,
based
on
information
supplied
by
himself,
including
the
purchase
price,
has
no
direct
bearing
on
the
transaction
of
June
2,
1986
and
cannot
be
accepted
as
persuasive
evidence
that
the
price
paid
was
$1,075,000
in
view
of
the
other
points
I
have
just
noted,
which
make
the
transaction
on
which
the
appellant
sought
to
rely
somewhat
unlikely.
However,
although
I
consider
that
the
respondent
has
shown
on
a
balance
of
probabilities
that
the
appellant
could
not
have
given
Mr.
Bota
$195,000
in
$1,000
bills
in
the
transaction
of
June
2,
1986,
no
evidence
was
presented
by
the
respondent
regarding
the
use
of
an
additional
amount
of
$10,000
which
the
appellant
said
he
used
to
pay
the
notary’s
fees
and
expenses
and
to
pay
his
own
incidental
expenses.
It
may
be
noted
here
that
the
statement
of
adjustments
and
disbursements
prepared
by
the
notary
(Exhibit
1-1)
contains
no
mention
of
his
fees
and
expenses.
As
it
is
reasonable
to
assume
that
he
was
paid
for
this
transaction
and
that
company
2319
was
the
purchaser,
in
the
absence
of
additional
evidence
there
can
be
no
question
of
appropriation.
Further,
the
appellant
undoubtedly
incurred
actual
expenses
for
his
efforts
and
the
respondent
did
not
see
fit
to
challenge
his
statements
in
this
connection.
The
appellant
further
indicated
that
he
had
$1,000
in
cash
at
the
outset
which
was
also
used
for
purposes
of
the
transaction.
This
point
was
not
disputed
by
the
respondent
and
it
is
hard
to
see
how
it
could
have
been.
Overall,
therefore,
I
feel
that
there
was
insufficient
evidence
to
conclude
that
the
appellant
appropriated
this
additional
amount
of
$10,000.
For
these
reasons,
I
consider
that
the
amount
of
$125,000
assessed
should
be
reduced
by
$10,000
and
the
penalty
reduced
accordingly.
On
the
remainder,
and
without
making
any
claim
to
have
clarified
all
the,
to
say
the
least,
doubtful
points
relating
to
the
transaction
of
June
2,
1986,
I
consider
that
the
respondent,
certainly
indirectly
and
by
inference,
but
on
a
balance
of
probabilities
nevertheless,
has
shown
that
the
balance
of
the
amount
assessed
actually
was
the
subject
of
an
appropriation
by
the
appellant.
It
is
not
important
to
say
exactly
under
which
statutory
provision,
of
those
relied
on
by
the
respondent,
such
a
sum
could
be
assessed.
It
is
admitted
that
it
is
in
the
nature
of
income:
see
in
particular
R.
v.
Poynton
(1972),
72
D.T.C.
6329
(Ont.
C.A.).
Further,
in
the
circumstances
I
consider
the
penalty
under
s.
163(2)
justified
since
the
failure
to
report
could
not
have
been
the
result
of
any
negligence
by
the
appellant,
but
was
instead
due
to
a
deliberate
omission.
In
such
circumstances,
and
with
the
same
evidence,
it
goes
without
saying
that
the
assessment
after
the
usual
reassessment
period
must
be
held
valid
under
s.
152(4)
of
the
Act.
The
appeal
is
accordingly
allowed
and
the
assessment
referred
back
to
the
Minister
for
reconsideration
and
reassessment
on
the
basis
that
the
sum
assessed
should
be
reduced
by
$10,000,
with
corresponding
adjustments
to
the
penalty
and
interest.
The
whole
with
costs
to
the
respondent.
Appeal
allowed
in
part.
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