Thomas v. R., [1999] 2 CTC 2347

MacLatchy D.J.T.C.:

This appeal, which was heard at Toronto, Ontario, on January 29, 1999, is from the assessments of the Minister of National Revenue (the “Minister”) for the 1992 and 1993 taxation years of the Appellant wherein she claimed a non-refundable tax credit in respect of an equivalent-to-spouse amount of $5,380 in each of those taxation years.

In assessing the Appellant for the 1992 and 1993 taxation years, concurrent Notices of Assessment thereof dated June 20, 1994, the Minister al- lowed the non-refundable tax credits in respect of an equivalent-to-spouse amount as claimed by the Appellant.

In reassessing the Appellant for the 1993 and 1994 taxation years, concurrent Notices of Reassessment thereof dated November 12, 1996, the Minister disallowed the non-refundable tax credits in respect of the equivalent-to-spouse amount in each of those taxation years.

The following facts upon which the Minister made the assessments were agreed to by the Appellant:

(a) the individual, in respect of whom the Appellant claimed a non-refundable tax credit in respect of an equivalent-to-spouse amount in the 1992 and 1993 taxation years, was the Appellant’s son, Adrian Acevedo, whose date of birth is September 15, 1985;

(b) the self-contained domestic establishment, as defined in subsection 248(1) of the Income Tax Act (the “Act”), in which the Appellant lived during both of the 1992 and 1993 taxation years and in respect of which the Appellant claimed the non-refundable tax credit in respect of an equivalent-to-spouse amount in the 1992 and 1993 taxation years, was 39 Elma Street, Etobicoke, Ontario.

The Minister assumed that during both of the 1992 and 1993 taxation years the Appellant lived with Hugo Acevedo, the father of the Appellant’s son, at 39 Elma Street, Etobicoke, Ontario, which was denied by the Appellant.

In the 1992 taxation year, a non-refundable tax credit in respect of an equivalent-to-spouse amount was claimed by Hugo Acevedo for his father in respect of the same self-contained domestic establishment as that of the Appellant at 39 Elma Street, Etobicoke, Ontario.

The Minister made the assumption that in the taxation year 1993 Hugo Acevedo was the spouse of the Appellant within the meaning of subsection 252(4) of the Act.

The issue was whether the Appellant is entitled to a non-refundable tax credit in respect of an equivalent-to-spouse amount for her son in the 1992 and 1993 taxation years.

Copies of the Appellant’s income tax returns for the years 1992 to 1996 inclusive were entered by the Respondent as Exhibits R-l to R-5 inclusive, showing her home address to be 39 Elma Street, Etobicoke, Ontario, on her returns for 1992 and 1993 and 1620 Wavell Cres. Mississauga, Ontario, for the years 1994 to 1996 inclusive.

Copies of the income tax returns for Hugo Acevedo for the years 1992 through to 1996 inclusive were entered by the Respondent as Exhibits R-6 to R-10 inclusive, indicating his home address to be 39 Elma Street, Etobicoke, Ontario, for the years 1992 and 1993 and thereafter the address shown was 1620 Wavell Cres., Mississauga, Ontario, for the years 1994 through to 1996.

Hugo Acevedo, in the years 1992 and 1993, claimed for the support of his father, Mario Acevedo, who resided with him at 39 Elma Street, Etobicoke, Ontario.

Hugo Acevedo claimed, for the years 1992 and 1993, losses on real estate rental properties that he owned at 31 Birgitta Crescent, Etobicoke, Ontario and at 306 Wallace Avenue, Toronto, Ontario and at neither address did he show any portion of either dwelling to have been occupied by himself or his supported father during those years.

The facts given in evidence were only provided by the Appellant who was unable to advise the Court where the father of her child, Hugo Acevedo, resided during the years 1992 and 1993 although they had been intimate since before the birth of their son Adrian in 1985 and were ultimately married during the year 1996. The Appellant stated they cohabited at 39 Elma Street during 1994.

The matter could have been clarified had Hugo Acevedo, now the husband of the Appellant, consented to give evidence at this hearing, but the Appellant indicated he would not appear for fear of losing his employment by taking the time from his new employment during this hearing.

It was argued by the Respondent that the Court could make an adverse inference against the Appellant’s testimony in regard to the residence of Hugo Acevedo during the subject years.

The Appellant stated there had been no break in their relationship during their years together and an inference could be drawn from the fact that they qualified as spouses of each other, residing at the same address and being the parents of the child. The Court agrees that it would be reasonable to infer that the Appellant and Hugo Acevedo did reside as spouses within the meaning of the Act at 39 Elma Street, Etobicoke, Ontario, during the subject years.

The Court having drawn such an inference then considered the effect of the provisions of section 118 and in particular subsection (4) thereof that, inter alia, provides that only one individual is entitled to a deduction under the section “for a taxation year in respect to the same domestic establishment”.

Hugo Acevedo has claimed such a deduction for his father who he supported during those years precluding any other deduction allowable under section 118 of the Act.

The burden to prove otherwise in these proceedings falls upon the Appellant who has been unable to convince this Court that she should be entitled to the deduction under that section as well.

Accordingly, the appeal is dismissed.

Appeal dismissed.