Roland
St-Onge
(orally:
October
7,
1977):—The
appeal
of
Mr
Joseph
Berlin,
concerning
his
1973
taxation
year,
came
before
me
on
October
7,
1977
at
the
City
of
Montréal,
Québec.
In
1973
the
appellant
disposed
of
his
entire
interest
in
Hartline
(Quebec)
Ltd
which
included
a
loan
to
the
company
of
$7,000
and
one-half
of
the
issued
common
shares
valued
at
some
$100.
The
appellant
estimated
the
market
value
of
his
interest
in
the
company
as
at
December
31,
1971
to
be
$9,257
but
he
sold
the
$7,000
loan
for
$1,094
and
claimed
a
capital
loss
of
some
$4,082.
On
the
other
hand,
the
respondent
stated
that
the
actual
cost
of
the
shares
was
valued,
in
accordance
with
the
book
value
of
the
shares,
as
outlined
by
the
company’s
financial
statements
for
its
fiscal
year
ending
November
1971
at
nil
and
that
the
fair
market
value
being
also
nil,
the
adjusted
cost
base
of
the
shares
was
valued
at
nil.
The
appellant
testified
that
he
put
$10,000
in
1966
into
the
company,
was
reimbursed
$3,000
at
December
31,
1971.
The
company
owed
him
$7,000.
He
sold
his
interest
on
the
condition
that
he
would
collect
the
receivables,
which
he
did,
and
according
to
Exhibit
R-2,
he
collected
some
$3,074
and
incurred
expenses
in
the
amount
of
$1,980,
the
net
proceeds
being
$1,094
and
the
capital
loss
was
$8,163.
The
appellant
had
the
onus
to
prove
the
value
of
his
shares
at
December
31,
1971;
there
was
no
expert
witness
on
his
behalf.
On
the
other
hand,
the
Minister
introduced
a
witness,
Mr
Daniel
Flibotte,
assessor
for
the
Department
of
National
Revenue.
He
filed
a
valuation
report
under
Exhibit
R-5
and,
according
to
this
report,
the
shares
at
December
31,
1971
had
no
value
at
all.
I
have
listened
very
carefully
to
the
explanation
given
by
Mr
Flibotte
and
how
he
arrived
at
the
figure
stated
in
the
said
report
and
I
am
satisfied
with
his
explanation.
The
onus
was
on
the
appellant
and
he
failed
to
prove
that
the
shares
were
valued
at
the
amount
he
mentioned.
The
Board
is
convinced
that
the
loss
occurred
prior
to
December
31,
1971
and
the
appellant
is
not
allowed
to
deduct
a
loss
which
occurred
prior
to
that
date.
For
these
reasons,
the
appeal
is
dismissed.
Appeal
dismissed.
Email this Content