Guy
Tremblay:—This
case
was
heard
in
Thunder
Bay.
Ontario
on
February
15,
1978.
1.
Point
at
Issue
The
issue
is
whether
the
amount
of
$990,
received
in
1975
from
the
Canada
Permanent
Trust
Company
as
a
withdrawal
payment
from
the
registered
retirement
savings
plan,
is
taxable.
2.
Burden
of
Proof
The
burden
is
on
the
appellant
to
show
that
the
respondent’s
assessment
is
incorrect.
This
burden
of
proof
derives
not
from
one
particular
section
of
the
Income
Tax
Act,
but
from
a
number
of
judicial
decisions,
including
the
judgment
delivered
by
the
Supreme
Court
of
Canada
in
Ft
W
S
Johnston
v
MNR,
[1948]
CTC
195;
3
DTC
1182.
3.
Facts
3.1.
In
1973
the
appellant
retired
after
38
years
of
teaching
in
the
employ
of
the
Lakehead
Board
of
Education
of
Thunder
Bay,
Ontario.
3.2.
He
received
an
amount
of
$6,800
as
a
retiring
allowance
which
was
transferred,
according
to
the
form
TD2
(Exhibit
R-1),
to
Canada
Permanent
Trust
Company.
3.3.
The
retiring
allowance
also
called
“service
gratuity”
was
based
on
the
number
of
years
of
service
and
accumulated
sick
leave
(Exhibits
A-1
and
A-2).
3.4.
In
subsequent
years,
the
appellant
withdrew
the
following
amounts
from
the
registered
pension
plan
to
defray
cost
of
trip
or
other
expenses:
|
1974:
|
$1,782
|
|
1975:
|
$
900
(Exhibit
R-2)
|
|
1976:
|
$1,485
|
3:5.
The
respondent
included
those
amounts
in
the
revenue
of
the
appellant.
For
the
year
1975,
the
notice
of
reassessment
was
issued
on.
December
10,
1976.
3.6.
A
notice
of
objection
was
filed
on
December
29,
1976
concerning
the
1975
taxation
year.
No
other
notice
of
objection
was
filed
for
the
other
two
years.
3.7.
On
April
12,
1977
the
respondent
notified
Mr
F
P
Woodward
of
the
confirmation
of
the
former
assessment.
3.8.
An
appeal
was
filed
before
the
Tax
Review
Board
on
May
25,
1977.
4.
Arguments,
Comments
4.1.
Appellant’s
Arguments
According
to
the
appellant,
the
retiring
allowance
was
a
service
gratuity.
In
the
dictionary
“gratuity”
means
“something
given
without
claim
or
demand”,
“a
bonus”,
“a
tip”
and
again
“a
gratuity
is
a
gift
of
money,
over
and
above
payment
due
for
service”.
The
appellant
maintained
again
that
if
the
Board
of
Education
had
given
him
a
gift
of
some
other
kind,
like
a
trip
around
the
world
or
a
new
car
as
a
reward
for
his
38
years
of
faithful
service,
it
would
not
have
been
taxable.
The
appellant
affirmed
that
even
if
the
amount
received
is
taxable
in
law,
in
equity
it
should
not
be
taxed.
4.2.
Respondent’s
Arguments
The
learned
counsel
for
the
respondent
quoted
paragraph
56(1)(h)
and
subsection
146(8)
of
the
new
Act:
56.
(1)
Amounts
to
be
included
in
income
for
year.—Without
restricting
the
generality
of
section
3,
there
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year,
(h)
Registered
retirement
savings
plan.—amounts
in
respect
of
a
registered
retirement
savings
plan
required
by
section
146
to
be
included
in
computing
the
taxpayer’s
income
for
the
year;
146.
(8)
Benefits
taxable.—There
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year
all
amounts
received
by
him
in
the
year
as
a
benefit
out
of
or
under
a
registered
retirement
savings
plan.
4.3.
Comments
Unfortunately
for
the
appellant
the
law*
Is
clear.
The
Board
has
no
choice
but
to
maintain
the
assessment.
The
Board
is
not
as
certain
as
the
appellant
that,
if
he
had
received
a
car
or
a
trip
in
lieu
of
a
retirement
allowance,
the
value
of
the
car
or
of
the
trip
would
not
have
been
taxable.
Section
5
says
inter
alia
that
all
gratuities
received
from
the
employer
are
part
of
the
income.
If
taxation
of
retirement
allowance
for
teachers
is
not
equitable,
Parliament
may
change
it
but
not
the
Tax
Review
Board.
5.
Conclusion
The
appeal
is
dismissed
in
accordance
with
the
above
reasons.
Appeal
dismissed.
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