A
J
Frost:—This
is
an
appeal
from
a
notice
of
reassessment
dated
February
21,
1975
with
respect
to
the
appellant’s
1973
taxation
year
and
from
a
notification
of
the
Minister
wherein
he
confirmed
the
said
assessment
on
the
ground
that
since
there
is
deemed
to
have
been
an
acquisition
by
the
taxpayer’s
Guaranty
Trust
Registered
Retirement
Savings
Plan
upon
the
transfer
of
Putman
Growth
Fund
shares,
the
amount
of
$12,355.20
has
been
added
to
the
taxpayer’s
income
in
accordance
with
the
provisions
of
subsection
146(10)
of
the
Income
Tax
Act
and
this
amount
has
been
offset
by
a
deduction
of
a
like
amount
under
subsection
146(6)
of
the
Act,
with
the
result
that
the
taxpayer’s
claim
for
a
deduction
of
$4,000.00
for
Registered
Retirement
Savings
Plan
premiums
has
been
Properly
disallowed
within
the
meaning
of
subsection
146(5)
of
the
Act.
The
question
at
issue
is
whether
there
was
an
acquisition
within
the
meaning
of
subsection
146(10)
of
the
Income
Tax
Act.
Prior
to
1973
the
appellant
owned
a
registered
retirement
savings
plan
(Trust
No
1)
with
the
Guaranty
Trust
Company
of
Canada
of
which
the
appellant
was
the
annuitant.
Over
several
years
he
transferred
shares
in
Putman
Growth
Fund
(a
US-based
mutual
fund)
to
his
registered
retirement
savings
plan.
Subsequently
the
Income
Tax
Act
was
amended
so
as
to
require
the
appellant
to
dispose
of
these
shares
in
Trust
No
1
or
be
subject
to
penalty.
The
appellant
did
not
choose
to
sell
his
holdings
of
Putman
Growth,
as
he
considered
them
a
sound
investment.
In
order
to
get
the
shares
back
into
his
own
name
without
selling
and
repurchasing
them,
he
opened
a
new
registered
retirement
savings
plan
(Trust
No
2),
on
a
self-administrated
basis,
with
Canada
Permanent.
He
then
immediately
caused
the
shares
to
be
transferred
back
into
his
own
name
at
their
fair
market
value
and
substituted
therefor
other
assets
at
fair
market
value.
On
the
evidence,
I
find
that
there
was
no
acquisition
of
a
nonqualified
investment
by
trust,
as
the
shares
in
question
were
transferred
from
Trust
No
1
to
Trust
No
2
only
to
restore
them
to
the
appellant,
and
that
Trust
No
2
only
served
as
a
conduit
pipe
for
the
purpose
of
transferring
the
shares
back
into
the
appellant’s
name.
Appeal
allowed.
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