Gibson,
J:—These
appeals
were
heard
together
on
common
evidence.
Four
individuals,
namely,
Milton
Rottman,
Charles
Rottman,
Joel
Rottman
and
Muriel
Ettlinger,
all
United
States
citizens
and
residents
except
Joel
Rottman
who
was
at
all
material
times
a
Canadian
resident,
and
six
companies,
namely,
the
three
appellant
companies,
Lira
News
Company
(1963)
Limited,
City
News
Company
Limited
and
Montreal
Newsdealers
Supply
Company
Limited,
completed
a
transaction
involving
sales
of
shares
on
June
10,
1964.
The
three
appellant
companies
(one
of
each
of
which
was
owned
by
the
said
Milton
Rottman,
Charles
Rottman
and
Muriel
Ettlinger)
and
Lira
News
Company
(1963)
Limited
(owned
by
the
said
Joel
Rottman),
by
agreements
all
dated
June
10,
1964,
each
respectively
sold
its
shares
of
City
News
Company
Limited
and
Montreal
Newsdealers
Supply
Limited
to
Charles,
Milton
and
Joel
Rottman
for
$34,400
each
and
to
Muriel
Ettlinger
for
$17,400.
The
assumption
pleaded
by
the
respondent
is
that
$34,400
was
not
fair
market
value
but
instead
such
was
not
less
than
$98,375
and
that
$17,400
also
was
not
fair
market
value
but
such
was
instead
not
less
than
$69,000.
The
said
individuals
had
previously
on
August
1,
1962
respectively
sold
the
same
shares
to
the
said
appellant
companies
and
Lira
News
Company
(1963)
Limited
for
the
same
sums,
but
had
received
no
option
to
repurchase
the
said
shares
or
other
understanding
that
they
could
repurchase
them
at
the
same
price.
In
the
interval
between
1962
and
1964,
the
value
of
the
shares
did
not
increase.
The
said
agreements
dated
June
10,
1964
at
paragraph
4
of
each
contained
a
provision
for
adjusting
the
said
prices
paid
for
the
shares
nunc
pro
tunc
to
conform
with
any
final
determination
by
the
Minister
of
National
Revenue
that
the
fair
market
value
of
the
shares
as
of
the
dates
of
the
agreements
was
less
or
greater
than
the
said
sums
paid.
The
main
issue
on
this
appeal
is
whether
or
not
a
benefit
or
advantage
within
the
meaning
of
paragraph
8(1
)(c)
of
the
Income
Tax
Act
was
respectively
conferred
by
the
appellant
companies
and
Lira
News
Company
(1963)
Limited
on
the
said
four
individuals;
and
the
only
other
issue
is
whether
or
not,
if
a
benefit
was
so
conferred
on
Joel
Rottman,
was
it
a
dividend.
The
whole
of
the
transaction
must
be
looked
at,
including
both
the
1962
and
1964
parts
of
the
transaction
and
all
their
relevant
docu-
merits;
and
especially
paragraph
4
of
the
said
agreements
dated
June
10,
1964.
After
doing
so,
and
considering
all
of
the
evidence
of
the
whole
of
the
transaction,
I
am
of
the
view
that
the
assumption
pleaded
of
benefit
or
advantage
within
the
meaning
of
paragraph
8(1
)(c)
of
the
Income
Tax
Act
has
not
been
rebutted.
In
the
case
of
the
appellant
Joel
Rottman
I
am
also
of
the
view
that
the
amount
or
value
of
the
benefit
received
by
him
is
not
subject
to
the
provisions
of
section
38
of
the
Act.
The
appeals
are
therefore
dismissed
with
costs.
Email this Content