GIBSON,
J.:—As
at
December
31,
1961,
Consumers
Distributing
Company
Limited
had
loaned
the
appellant
$18,477.17.
The
appellant
at
that
time
owned
beneficially
all
the
issued
shares
of
Consumers
Distributing
Company
Limited.
On
April
15,
1962,
the
appellant
caused
to
have
issued
to
him
as
fully
paid
and
non-assessable
3,600
preference
shares
of
a
par
value
of
$10
of
Consumers
Distributing
(Adelaide)
Limited
and
purported
to
give,
according
to
the
evidence,
as
consideration
therefor,
a
$36,000
promissory
note
without
interest.
At
that
time
all
the
shares
of
Consumers
Distributing
(Adelaide)
Limited
were
beneficially
owned
by
the
appellant.
On
that
same
day
the
appellant
caused
to
be
transferred
all
the
shares
of
Consumers
Distributing
(Adelaide)
Limited
to
Consumers
Distributing
Company
Limited
so
that
the
former
became
a
wholly-owned
subsidiary
of
the
latter.
On
that
day
also,
the
appellant
caused
Consumers
Distributing
Company
Limited
to
buy
the
said
3,600
preference
shares
of
Consumers
Distributing
(Adelaide)
Limited
from
him
purportedly
for
the
sum
of
$36,000.
On
that
day
also,
and
until
August
31,
1963,
Consumers
Distributing
(Adelaide)
Limited
was
an
inoperative
company
having
no
assets
except
this
promissory
note
owed
to
it
by
the
appellant
and
a
further
account
receivable
for
$30
also
owed
by
the
appellant
to
it
for
the
only
issued
shares
of
the
company.
The
issue
on
this
appeal
is
whether
the
appellant
"‘repaid’’
within
the
meaning
of
Section
8(2)
of
the
Income
Tax
Act
his
said
loan
of
$18,477.17
to
Consumers
Distributing
Company
Limited
by
the
purported
sale
to
it
on
April
15,
1962
of
the
said
preference
shares
purported
to
have
a
value
of
$36,000.
Without
detailing
the
evidence,
but
as
is
readily
apparent
from
it,
on
a
determination
of
this
issue
I
find
as
a
fact:
(1)
that
no
promissory
note
was
ever
issued
by
the
appellant
and
delivered
to
Consumers
Distributing
(Adelaide)
Limited;
and
(2)
that
the
3,600
preference
shares
of
that
company
were
never
transferred
by
the
appellant
to
Consumers
Distributing
Company
Limited.
In
any
event,
I
also
find
that
insufficient
evidence
was
put
forward
by
the
appellant
to
convince
me
of
what
the
true
facts
are
in
this
particular
case
to
rebut
the
assumptions
contained
in
Section
7(c),
(e)
and
(g)
of
the
Reply.
I
therefore
conclude
that
the
said
loan
of
$18,477.17
as
a
matter
of
fact
was
not
repaid
to
Consumers
Distributing
Company
Limited
within
the
meaning
of
Section
8(2)
of
the
I
ncome
Tax
Act.
The
appeal
is
dismissed
with
costs.
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