Delmer
E
Taylor:—This
is
an
appeal
against
an
income
tax
assessment
for
the
year
1975
in.
which
the
Minister
of
National
Revenue
disallowed
the
taxpayer’s
election
to
average
his
income
over
a
five-year
period.
The
respondent
relied,
inter
alia,
upon
section
119
of
the
Income
Tax
Act,
SC
1970-71-72,
c
63
as
amended.
Facts
The
appellant
was
engaged
in
education,
and
farming
in
the
province
of
Saskatchewan
during
the
times
material.
He
owns
some
640
acres
of
land,
the
majority
of
which
(and
sometimes
all)
was
leased
to
others
under
a
“share-cropping’
arrangement
during
the
years
1971
through
1975.
The
income
tax
return
for
1975
may
be
recapitulated
as
follows:
|
Total
earnings
(salary
as
teacher)
|
$17,089.71
|
|
Employment
expenses
|
150.00
|
|
$16,939.71
|
|
Interest
and
other
investment
income
|
5,419.19
|
|
Farming
Income—(Gross
$23,148.26)
|
17,201.26
|
|
$39,560.16
|
|
Sundry
deductions
and
personal
exemptions
|
7,935.60
|
|
Taxable
income
|
$31,624.56
|
With
some
differences,
the
general
picture
of
the
appellant’s
income
was
relatively
similar
for
the
period
1971
through
1975,
with
the
year
1975
however
showing
the
greatest
total
income.
Contentions
The
position
of
the
appellant
was
that
by
any
criteria
he
regarded
farming
as
his
chief
source
of
income,
and
not
teaching.
The
respondent
submitted
that:
—the
appellant’s
chief
source
of
income
had
not
been
farming
or
fishing
for
either
the
1975
taxation
year
or
all
of
the
four
immediately
preceding
years
for
which
he
has
filed
tax
returns
of
income;
—during
the
five
taxation
years
in
which
the
appellant
has
attempted
to
average
his
income,
his
net
farming
income
in
each
of
those
taxation
years
was,
in
one
or
more
of
those
years,
less
than
the
amount
of
income
he
received
from
other
sources,
such
as
salary
and
wages.
Evidence
and
Argument
The
appellant
presented
a
complex
set
of
statistics
relating
his
income
from
farming
and
that
from
teaching
with
the
income
tax
he
paid
totally,
and
then
as
he
described
it,
allocated
between
these.
Further,
some
information
was
provided
by
him
with
reference
to
assumed
“retained”
net
income,
designed
to
show
that
after
all
expenses
including
personal
expenses,
that
which
remained
should
be
attributed
more
to
farming
than
to
teaching.
In
addition,
it
was
his
contention
that
the
investment
income
had
developed
from
savings
from
his
farm
income
and
should
be
considered
as
such.
Counsel
for
the
Minister
presented
for
the
Board’s
consideration
the
cases
of
Richard
Orville
Blake
v
MNR,
28
Tax
ABC
156;
61
DTC
704;
William
Moldowan
v
Her
Majesty
the
Queen,
[1977]
CTC
310;
77
DTC
5213;
and
Robert
M
Hood
v
MNR,
34
Tax
ABC
41;
63
DTC
968.
He
argued
that
it
was
evident
the
appellant’s
relative
income
for
all
of
the
five
years
disqualified
him
from
averaging,
but
that
it
was
only
necessary
for
the
Board
to
find
that
just
one
year
did
not
meet
the
requirements
in
order
to
uphold
the
Minister’s
position.
Findings
Neither
income
tax
nor
personal
living
expenses
enter
into
this
matter,
and
there
is
no
evidence
that
the
investment
income
resulted
from
savings
from
farm
income
more
than
from
teaching
income.
Even
if
it
had
been
from
that
source
(farming),
its
character
changed
when
it
became
an
investment.
The
appellant’s
case
is
defeated
on
the
basis
of
the
1975
income
tax
return
alone.
The
income
therein
which
would
be
the
subject
of
any
averaging
is
farming,
$17,201.26,
and
other
(teaching
and
investments)
$22,508.90.
I
know
of
no
method
of
determining
“chief
source
of
income’’
which
would
be
more
reasonable
than
the
total
dollars
earned.
Decision
The
appeal
is
dismissed.
Appeal
dismissed.
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