The
Chairman:—This
is
an
appeal
by
Claude
M
Dallaire
against
a
tax
assessment
for
the
1972
taxation
year.
The
question
in
this
case
is
as
to
whether
an
amount
of
$4,000
received
by
the
appellant
on
February
11,
1972
in
partial
payment
of
a
scholarship
of
$8,000
granted
by
the
Government
of
the
Province
of
Quebec
for
the
1971-72
university
year
is
taxable
in
accordance
with
the
provisions
of
paragraph
56(1
)(n)
of
the
Income
Tax
Act.
On
July
23,
1971
the
Department
of
Education
of
the
Province
of
Quebec
offered
the
appellant
a
scholarship
of
$8,000
for
the
1971-72
university
year
(Exhibits
A-1
and
A-2).
On
October
21,
1971
the
appellant
received
an
initial
amount
of
$4,000
from
the
Government
of
Quebec.
Since
amounts
received
as
scholarships
were
not
taxable
under
the
Act
at
this
time,
no
income
tax
was
required
from
the
appellant
on
this
first
amount
of
the
scholarship.
On
February
11,
1972
the
appellant
received
the
second
and
final
payment
of
$4,000
arising
out
of
the
said
scholarship.
Since
the
Income
Tax
Act,
SC
1970-71-72,
c
63,
as
amended,
was
then
in
force,
paragraph
56(1)(n),
pertinent
to
the
facts
of
this
appeal,
was
applicable.
Paragraph
56(1
)(n)
reads
as
follows:
56.
(1)
Without
restricting
the
generality
of
section
3,
there
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year,
(n)
the
amount,
if
any,
by
which
(i)
the
aggregate
of
all
amounts
received
by
the
taxpayer
in
the
year,
each
of
which
is
an
amount
received
by
him
as
or
on
account
of
a
scholarship,
fellowship
or
bursary,
or
a
prize
for
achievement
in
a
field
of
endeavour
ordinarily
carried
on
by
the
taxpayer,
exceeds
(ii)
$500;
The
Minister
accordingly
included
the
sum
of
$3,500
in
the
appellant’s
taxable
income
as
provided
for
in
paragraph
56(1
)(n).
In
opposing
the
Minister’s
assessment
for
1972,
the
appellant
maintains
that
the
amount
of
$4,000
received
in
1972
was
the
payment
of
a
debt
which
was
contracted
toward
him
in
1971
and
which
should
not
be
taxed
in
1972.
In
my
opinion,
this
does
not
really
concern
a
debt
but
rather
a
government
grant,
a
scholarship
of
$8,000
covering
the
1971-72
university
year,
and
the
payment
of
$4,000
to
the
appellant
in
1972
falls
squarely
within
the
provisions
of
paragraph
56(1
)(n)
of
the
Act.
According
to
the
Act
and
previous
decisions
cited,
there
is
no
doubt
that
this
amount
is
taxable
in
the
year
in
which
it
is
received.
Even
though
the
grant
could
doubtless
have
been
paid
in
full
during
1971,
the
evidence
is
undeniable
that
the
appellant
did
not
receive
$4,000
of
this
grant
until
1972.
The
appellant
stated
that
he
had
accepted
the
scholarship
at
a
time
when
scholarships
were
not
taxed
and
that,
if
he
had
known
that
it
would
be
subject
to
income
tax,
he
would
not
have
accepted
It;
his
family
responsibilities
would
not
have
allowed
him
to
do
so.
Although
the
Board
can
sympathize
with
the
appellant,
it
must
apply
the
Act
as
indicated
and
cannot
base
its
judgment
on
any
equitable
ground.
Although
the
Act
seems
hard
in
the
circumstances,
however,
in
my
opinion,
it
Is
very
clear
and
the
Board
can
only
dismiss
the
appeal.
The
appeal
is
dismissed.
Appeal
dismissed.
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