The
Chairman:—This
is
the
appeal
of
Gerhard
Methner
from
an
income
tax
assessment
dated
February
23,1976,
by
which
the
Minister
added
to
the
appellant’s
1973
income
an
amount
of
$9,461.12
on
account
of
sale
of
property
known
as
"Part
of
the
South
half
of
Lot
12,
Concesion
12,
Township
of
Blenheim,
County
of
Oxford”,
and
$5,011
on
account
of
profits
realized
by
the
appellant
from
the
sale
of
property
known
as
"Part
Lot
21,
Concession
2,
Township
of
Blenheim,
County
of
Oxford”.
The
Minister
also
disallowed
a
capital
loss
of
$2,500
claimed
by
the
appellant
on
the
disposition
of
a
promissory
note.
Issues
At
the
outset
of
the
hearing
the
appellant
consented
to
the
disallowance
of
his
capital
loss
of
$2,500
and
the
issue
is
whether
the
profits
from
the
two
sales
of
land
above
described
were
on
account
of
capital
or
income.
The
Facts
The
appellant
came
to
Canada
in
1957
and
worked
in
structural
steel
fittings
for
some
time.
He
then
went
into
the
business
of
selling
new
and
used
cars.
In
1969
the
appellant
attended
a
real
estate
course
in
Toronto.
The
appellant
claims
that
he
was
not
fully
engaged
in
real
estate
and
indeed
in
the
1973
taxation
year
reported
only
$1,248.23
as
income
from
Realty.
Although
the
appellant
alleges
that
he
was
principally
engaged
in
farming
and
land
rentals,
he
was
nevertheless
involved
in
several
land
transactions
other
than
the
two
transactions
in
issue.
In
the
acquisition
of
Part
Lot
21
the
appellant
allegedly
acted
as
a
realtor
for
Kim
B
White
and
the
offer
to
purchase
was
made
in
February
1973.
The
Minister
assumed
that
the
deposit
of
$1,000
for
the
land
was
made
not
by
Mr
White
but
by
the
appellant.
(Exhibit
R-1.)
That
assumption
was
not
satisfactorily
rebutted.
The
land
was
never
transferred
to
Mr
White.
The
closing
date
of
the
sale
was
June
15,
1973.
However,
in
May
of
1973,
as
a
result
of
advertising,
an
agreement
of
sale
was
made
to
Mr
Holmes
and
the
property
was
disposed
of
on
June
15,
1973,
from
the
proceeds
of
which
the
appellant
realized
a
profit
of
$5,011.
The
land
known
as
“Part
of
the
South
half
of
Lot
12,
Concession
12”,
comprising
99
acres,
was
acquired
by
the
appellant
on
December
19,
1973,
47
acres
of
which
was
disposed
of
by
the
appellant
on
the
same
day
at
a
profit
of
$9,461.21.
Finding
of
Facts
On
the
basis
of
the
evidence,
I
have
no
difficulty
in
coming
to
the
conclusion
that
both
the
properties
in
issue
were
not
purchased
for
the
purpose
of
operating
them
as
farms
or
to
be
kept
as
a
long-term
investment.
On
Lot
21,
Concession
12,
the
land
was
all
bush
and
non
arable.
On
Lot
12,
Concession
12,
the
appellant
had
already
signed
an
offer
to
sell
and
in
both
cases
the
land
or
part
thereof
was
sold
on
the
same
day
it
was
acquired.
The
appellant
claims
that
it
was
his
intention
to
acquire
the
land
other
than
for
resale
and
that
the
need
of
money
in
one
instance
or
selling
it
to
his
brother-in-law
to
keep
the
land
in
the
family
in
another
instance,
frustrated
his
plans.
Although
a
taxpayer’s
declared
intention
at
the
time
of
acquiring
the
land
is
certainly
to
be
considered,
so
must
the
taxpayer’s
actions
either
before
or
after
the
acquisition
be
taken
into
account
in
attempting
to
determine
the
nature
of
the
transaction.
In
both
instances
the
appellant
failed
to
satisfy
the
onus
that
was
on
him
of
convincing
the
Board
that
the
only
intention
he
had
in
acquiring
the
two
parcels
of
land
was
as
a
Capital
investment.
His
actions
both
prior
to
and
after
the
acquisition
do
not
support
that
proposition.
Although
a
realtor
can
acquire
real
property
for
purposes
of
investment
and
benefit
from
the
pertinent
provisions
of
the
Income
Tax
Act,
SC
1970-71-72,
c
63
as
amended,
such
a
transaction
will
understandably
undergo
greater
scrutiny
than
would
otherwise
be
necessary.
The
fact
that
the
appellant
was
a
realtor
and
did
engage
in
several
realty
transactions
other
than
the
two
transactions
in
issue,
necessitates
giving
considerably
more
weight
to
the
appellant’s
actions
at
the
time
of
acquisition.
The
ap-
pellant’s
evidence
and
the
facts
surrounding
the
transactions
do
not
in
any
way
establish
that
the
assumptions
on
which
the
Minister
based
his
assessment
were
wrong
and
the
assessment
must
stand.
Decision
The
appeal
is,
therefore,
dismissed.
Appeal
dismissed.
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