ARCHIBALD,
J.:—The
appellant
was
assessed
for
income
and
excess
profits
tax
for
the
year
1945
and
appealed
from
said
assessment,
which
said
appeal
was
disallowed
by
the
Minister
and
the
appellant
duly
served
and
filed
his
notice
of
dissastis-
faction
from
the
decision
of
the
said
Minister.
On
the
28th
day
of
October,
1949,
the
Minister
adjusted
the
said
assessment
and
a
revised
assessment
was
filed.
There
was
some
dispute
between
counsel
as
to
the
correct
date
on
which
said
revised
assessment
was
served
on
the
appellant.
However,
having
regard
to
the
proceedings
which
followed,
it
is
not
necessary
for
me
to
determine
the
exact
date.
The
Statement
of
Claim,
pursuant
to
an
order
issued
out
of
this
Court,
was
filed
on
the
8th
day
of
March,
1951.
The
said
State-
ment
of
Claim
included
a
claim
for
revision
of
certain
items
of
depreciation
and
for
an
increase
in
the
standard
profits
under
the
Excess
Profits
Tax
Act.
On
the
28rd
day
of
June,
1951,
the
Statement
of
Defence
was
filed,
in
which
appears
an
allowance
for
depreciation
totalling
$940.00,
the
amount
which
the
appellant
claims
:
also
an
amendment
in
the
allowance
for
standard
profits.
No
notification
was
given
to
the
respondent
by
the
appellant
subsequent
to
the
filing
of
the
Statement
of
Defence.
This
appeal
was
heard
before
me
at
Winnipeg
on
the
17th
day
of
March,
1952.
On
the
hearing
of
said
appeal,
it
was
urged,
by
counsel
on
behalf
of
the
appellant,
that
the
appellant
was
entitled
to
a
further
adjustment
in
the
amount
of
standard
profits,
because
the
capital
stock
of
the
company
was
increased
on
the
31st
day
of
January,
1944.
Subsequently,
an
amount
of
$100,000.00
was
invested
by
Rothstein
Theatres
Limited
in
Rothlish
Investments
Limited.
The
investment
of
$100,000.00
in
that
company
is,
however,
a
deduction
under
the
Excess
Profits
Tax
Act,
in
computing
the
proper
amount
for
standard
profits,
and
cannot
therefore
be
taken
into
account,
as
urged
by
counsel
for
the
appellant.
Neither
is
the
appellant
entitled
to
claim
that
the
standard
profits
are
to
be
computed
simply
by
the
addition
of
the
sum
of
$60,000.00,
(the
amount
added
to
the
capital
stock
on
the
31st
day
of
January,
1944),
because
any
increase
in
the
standard
profits
pursuant
to
the
Excess
Profits
Tax
Act
is
computed
on
the
basis
of
the
capital
employed
not
on
the
basis
of
the
capital
stock
of
the
company.
George
Christie
Serimgeour
of
Winnipeg,
a
chartered
accountant,
residing
in
Winnipeg
and
now
in
the
service
of
the
Inspector
of
Income
Tax,
explained
in
detail
the
manner
in
which
the
excess
profits
were
computed.
He
impressed
me
as
a
competent,
careful
and
accurate
witness,
and
I
accept,
without
hesitation,
the
evidence
which
he
offered.
Having
regard
to
his
evidence
and
the
provisions
of
the
Excess
Profits
Tax
Act,
I
am
satisfied
the
appellant
is
not
entitled
to
have
taken
into
account,
in
arriving
at
the
proper
standard
profits
pursuant
to
the
Act,
either
the
$100,000.00,
which
was
invested
in
the
manner
hereinbefore
described,
nor
the
$60,000.00
item
which
was
issued
to
Nathan
Rothstein
on
the
31st
day
of
December,
1944,
as
capital
stock
in
Rothstein
Theatres
Limited.
Moreover,
I
am
of
opinion
also,
that
Scrimgeour,
in
determining
the
amount
of
the
refundable
portion,
properly
employed
the
1st
day
of
July,
1939,
as
the
date
from
which
to
base
his
calculations.
In
doing
so,
the
standard
profits
were
increased
to
the
amount
shown
in
the
Statement
of
Defence.
This
amount
I
accept
as
correct
and
the
claim
for
additional
allowance
in
the
amount
of
the
standard
profits,
as
made
by
the
appellant,
is
dismissed.
The
appellant,
however,
is
entitled
to
the
depreciation
allowance
and
the
increase
in
excess
profits
allowed
and
specified
in
paragraphs
6
and
13
of
the
Statement
of
Defence
filed
by
the
respondent
on
the
23rd
day
of
June,
1951.
I
am
of
the
opinion,
also,
that
neither
party
is
entitled
to
any
costs
of
these
proceedings.
Counsel
for
the
appellant
contends
that
owing
to
the
action
of
the
respondent
in
adjusting
the
assessment
and
refusing
to
make
any
adjustment
for
the
depreciation
items,
these
proceedings
were
taken.
He
calls
attention
to
the
fact
that
not
until
the
28rd
day
of
June,
1951,
was
an
examination
of
the
Statement
of
Defence
possible.
Counsel
for
the
respondent,
on
the
other
hand,
while
conceding
that
the
appellant
may
be
entitled
to
costs
up
to
a
certain
point,
is
emphatic
that
the
appellant
is
entitled
to
no
costs
after
the
Statement
of
Defence
was
filed
by
the
respondent,
but
he
added,
not
without
significance,
that
"‘it
may
be
decided
is
not
a
case
for
costs
at
all.’’
I
agree
that
in
all
the
circumstances
of
this
appeal,
neither
party
is
entitled
to
any
costs.
Judgment
accordingly.
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