Paul Stanley Seddon v. Her Majesty the Queen, [1974] CTC 284, 74 DTC 6234

Mahoney, J:—The plaintiff is a chartered accountant not in active practice. His appeal against his 1966 and 1967 personal income tax assessments was allowed, in part, by the Tax Review Board. During those years his income was derived from employment in the form of salary and from his business as the owner of rental real estate in Metro Toronto—a 40-suite apartment and 7 houses in 1966, 9 houses in 1967.

This appeal embraces all of the items not decided in his favour by the Tax Review Board, as follows:

1. Alleged overstatement of income by $3,814.63 In 1966 and $4,123.66 in 1967. These amounts are the differences between the rental revenue which the Appellant originally reported in his tax returns and the amounts which he now says are correct. He reported $73,280 rental revenue in 1966 and says that the correct amount is $69,465.37; for 1967, the reported amount was $77,529.32 and the correct amount is said to have been $73,405.66. The principal, if not the only, basis for the correction is the Appellant’s statement that not all of the rent was received in cash but some was in the form of labour by his tenants and his contention that the value attributed by him to that labour should not only have been excluded from revenue but should have been deducted as an expense.

2. A loss carry-forward from 1962 of $4,379.04 alleged not to have been taken into account in either year and concerning which no evidence whatsoever was adduced.

3. Stolen cash of $6,957.26 disallowed as an expense to the extent of $3,478.63 in each year which proved not to have been cash at all but rather represents the Appellant’s valuation of capital assets and supplies stolen from the apartment building during those years as determined by an inventory taken after discovery of the thefts.

4. Disallowance of $785.00 and $1,356.66 claimed in 1966 and 1967 respectively as money paid to his mother, with whom he lived and claimed as fully dependent on him, for the exclusive use for his business purposes of a storage room and the dining room in her house. The Plaintiff did not, in either year, reduce the exemption claimed for his mother to reflect her income.

5. Disallowance of $2,857.81 for a six-week trip to Czechoslovakia in 1966 to purchase linen, cutlery and like equipment for his furnished apartments and to make business connections which he acknowledges have not, to date, resulted in any income to him.

6. The requirement that he capitalize certain assets acquired for the apartment including a snow blower, television sets, furniture, office and laundry equipment and carpets, partly to replace stolen items and partly to replace worn-out items and the disallowance of the immediate write off, as expenses, of $5,191.22 paid for them in 1966 and $1,997.44 paid in 1967.

7. Disallowance of $1500 spent travelling to Africa and to acquire, while there, items of ornament and decoration for his furnished rental units. The items purchased were in the 500 to $1 price range and therefore, naturally, not usually covered by invoices.

8. Disallowance of the write off against other income of a loss of $5,971.98 incurred in 1967 in an unsuccessful effort to develop a business based on films taken by the Plaintiff while in Africa. Included in the computation of the loss is $4,754.24 travel expenses.

9. Disallowance of a balance of $857.50 claimed, but unsupported by vouchers, for transportation and other expenses incurred in the collection of rents in 1967. As determined by the Tax Review Board, a total of $1,916.72 was allowed for transportation and collection expense in 1967.

The plaintiff conducted his own case and was the only witness. It may be that in deciding to proceed in that fashion he deprived himself of the opportunity to convince the Court of some item of merit in his appeal. It is evident that the decision was not dictated by modest financial resources. His story was confused, incomplete and, considering his profession, remarkably lacking in supporting documentation that could be seen on its face to prove anything relevant.

After carefully reviewing the exhibits, I am confirmed in the conclusion that I arrived at following the hearing, namely, that the plaintiff has failed utterly to discharge the onus on him to prove his case in any particular. I have read the decision of the learned Chairman of the Tax Review Board herein and fully agree with it to the extent that it deals with matters subject to this further appeal. It would be an otiose exercise for me to repeat his reasons for judgment in so far as they deal in some detail with particular items of complaint.

The appeal is dismissed with costs.