Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Bryan Dath
Director
Specialty Rulings Directorate
24(1)This is in response to Mike Hiltz's memorandum (ref. 5-8198) in
which he asked for our review of a draft letter prepared by C.
Bowen in response to queries raised by the 24(1)
Our comments are limited to paragraph 3. of that letter.
The question of whether or not M.O.C. can only revoke a certificate where an incorrect statement has been supplied by the applicant for the purpose of obtaining certification is one of fact. However, from our reading of paragraph 1104(10)(b) of the Regulations, it seems that other reasons could lead to the revocation of a certificate. For instance, MOC seems to have revoked its certificate in this case because the editing part of the tapes was not completed and they could not qualify for Part "B" of the certificate. (Pursuant to paragraph 1. of your memo, even though Part B of the form was never completed and the conditions therein not satisfied, the certificate could still legally be considered a valid certificate).
Our understanding of paragraph (g) of the definition of certified short production in paragraph 1104(2) as read in conjunction with paragraph 1104(10)(b) is that a revocation has to be taken into account for Income Tax purposes only when it has been done for the reason provided in paragraph 1104(10)(b).
we believe that this question could be clarified. We also believe that the revocation by M.O.C. of a certificate for a reason other than an incorrect statement made in the furnishing of information for the purpose of obtaining that certificate would not prevent a video tape from being treated as class 12 asset.
R.S. Biscaro Manager, Tax Avoidance Section Special Audits Division
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