The
Chairman
(orally:
April
24,
1973):—This
is
an
appeal
by
Ludwig
Upenieks
against
the
reassessments
of
the
Minister
of
National
Revenue
for
the
taxation
years
1968
and
1969.
There
are
several
issues
under
appeal.
The
first
deals
with
the
alleged
and
actual
use
by
the
appellant
of
part
of
his
personal
residence
as
a
business
office.
It
is
not
uncommon
for
the
Board
to
hear,
from
time
to
time,
allegations
by
medical
practitioners
that
their
homes
are
used
for
offices.
This
is
especially
true
in
the
case
of
a
family
practitioner
such
as
this
appellant
appears
to
be.
It
is
clear
that,
under
the
Income
Tax
Act,
concessions
are
made
to
those
who
can
establish
that
part
of
their
normal
residential
property
is
used
for
business
purposes.
However,
as
is
the
case
with
most
sections
of
the
Income
Tax
Act,
which
is
a
law
that
must
apply
to
all
the
citizens
that
pay
tax
in
the
country
and
cannot
be
specific
in
all
details,
the
onus
is
on
the
taxpayer
to
satisfy
this
Board
or
the
courts
that
the
assessment
is
wrong
in
law
or
in
fact
and
should
be
set
aside.
The
Board
has
had
considerable
experience
in
dealing
with
this
type
of
claim
from
coast
to
coast,
and
I
find
as
a
rule
of
thumb
that
the
ratio
of
40%
allowed
to,the
doctor
in
this
instance
is
in
excess
of
that
which
is
usually
allowed
to
medical
practitioners
or
salesmen
or
other
persons
who
find
it
to
their
convenience
to
use
part
of
their
personal
residence
for
carrying
on
their
business.
However,
I
cannot
base
my
decision
in
any
case
merely
on
a
rule
of
thumb
or
my
intuition.
I
must
base
it
on
fact.
The
doctor
has
not,
in
my
view,
produced
evidence
to
demolish
the
assumption
upon
which
the
Minister
has
based
his
assessments
with
respect
to
the
portion
of
the
residence
of
the
appellant
which
was
used
as
business
premises.
The
doctor
says
that
much
more
than
40%
is
used,
but
it
is
clear
from
his
own
testimony
that
such
use
is
merely
a
convenience
to
him
and,
with
a
house
with
an
area
of
some
3,200
square
feet,
it
is
inconceivable
to
me
that
almost
all
of
it,
if
I
were
to
accept
the
doctor’s
evidence,
is
used
as
business
premises.
At
the
material
time
it
was
convenient
for
him
to
have
his
office
in
his
house,
as
I
have
said,
and
it
is
his
responsibility
to
satisfy
me
that
the
assessments
are
wrong
in
law
or
in
fact.
This
he
has
failed
to
do
and
the
appeal,
in
so
far
as
his
claim
to
an
allowance
of
more
than
40%
of
the
house
for
business
use
is
concerned,
is
dismissed.
The
cost
of
the
Encyclopaedia
Britannica
is
an
item
which
the
Minister
of
National
Revenue
has
said
appeared
to
the
assessor
to
have
been
obviously
of
a
personal
nature.
The
doctor
has
testified
that
this
is
a
book
that
many
find
useful
in
the
practice
of
medicine.
It
keeps
him,
he
says,
abreast
of
new
terminology
and
helps
him
to
explain
to
his
patients
in
layman’s
language
words
that
would
otherwise
be
unintelligible
to
them.
I
do
not
express
any
opinion
as
to
the
degree
of
professionalism
demonstrated
by
the
doctor’s
choice
of
this
book
or
set
of
books,
but
he
has
satisfied
me
that
these
books
were
useful
to
him
in
the
practice
of
medicine
and,
as
I
have
pointed
out,
if
he
had
chosen
to
spend
the
same
amount
on
any
other
books
with
more
obviously
medical
titles,
I
am
sure
no
question
would
have
been
raised.
I
would
therefore
allow
the
appeal
with
respect
to
the
amount
of
$569
laid
out
for
these
books
in
1969.
The
doctor
also
has
appealed
his
assessments
with
respect
to
car
allowance.
The
Minister’s
officials
have
arrived
at
a
figure
of
75%
as
the
proportion
of
his
car
expenses
which
should
be
allowed
as
having
been
expended
for
business
purposes.
The
doctor
has
given
evidence
that
he
has
two
cars
and
that
he
is
the
only
one
that
really
drives
them
to
any
extent.
I
gather
that
his
wife
doesn’t
do
any
highway
driving.
All
of
us
can,
I
think,
on
occasion,
acknowledge
the
fact
that
we
do
use
our
car
to
some
small
extent
in
a
personal
way,
even
if
it
is
generally
looked
upon
as
a
vehicle
for
business
use.
My
experience
has
been
that
the
various
district
taxation
offices
of
the
Department
of
National
Revenue,
Taxation
are
very
inconsistent
in
their
approach
to
what
is
a
proper
car
allowance
for
a
doctor.
I
have
had
them
run
as
low
as
20%
in
Vancouver
and
as
high
as
80%
in
New
Brunswick
on
almost
the
same
set
of
facts.
It
seems
to
me
that
there
is
a
great
lack
of
communication
between
district
taxation
offices
on
what
should
be
considered
allowable
to
professional
people
for
business
use
of
their
private
automobiles.
I
recently
decided
a
case
in
Vancouver
on
similar
facts
and
I
cannot
find
the
Minister’s
assessment
of
75%
unreasonable
nor
can
I
find
that
the
doctor
has
shown
that
more
than
the
allotted
75%
should
be
allowed.
The
appeal
is
therefore
dismissed
with
respect
to
the
car
allowances
for
the
years
in
question.
The
other
items
which
were
in
dispute
were
items
of
sundry
expense
involving
typewriters
and
lamps,
with
some
reference
to
chairs.
There
is
no
question
whatsoever
that,
regardless
of
the
state
of
the
equipment
in
question,
the
typewriters
and
lamps
are
what
are
normally
considered
capital
assets.
They
do
not
represent
a
recurring
daily
or
monthly
expense
that
one
incurs
in
normal
business
practice,
and
I
can
see
nothing
in
the
evidence
before
me
today
to
show
that
these
were
not
properly
capitalized
by
the
assessor.
Therefore
the
appeal
must
be
dismissed
in
this
respect
also.
In
the
net
result,
the
appeal
will
be
allowed
in
part
and
referred
back
to
the
Minister
for
reassessment
in
order
to
allow
the
cost
of
the
encyclopaedia,
namely,
$569,
as
a
deductible
expense
in
the
1969
taxation
year.
Appeal
allowed
in
part.
Email this Content