Blackburn Radio Inc. v. The Queen, 2009 TCC 155 -- summary under Subparagraph 152(4)(b)(iii)

Three relevant transactions or events took place in 1999.

The taxpayer decided that its wholly-owned US holding company would sell its shares of a US subsidiary (Carfax). Such sale (to which the taxpayer was not a party) then occurred to an arm’s length purchaser. Then, the taxpayer paid a bonus to a resident executive (Goldstein).

The Minister then reassessed the taxpayer beyond the normal reassessment period (but within the extended reassessment period, if it applied) to reverse the deduction by the taxpayer of the bonus in computing its income, as the Minister considered that the bonus was “an expense incurred on behalf of a related non-resident corporation” (para. 24).

Before finding that the extended s. 152(4)(b)(iii) reassessment period did not apply, on the basis that “the reassessment was made as a consequence of the payment of the Bonus by the Appellant to Goldstein”) (para. 39), Miller J stated (at paras. 34-35):

[T]he word “transaction” in subparagraph 152(4)(b)(iii) … does not include an arrangement … [and] does not include a series of transactions. …

[T]he word “transaction” … is defined in the Canadian Oxford Dictionary as follows:

1 a. a piece of esp. commercial business done; a deal (a profitable transaction).

b. N Amer. = TRADE 4b.

c. the management of business etc.

2. (in pl.) published reports of discussions, papers read, etc., at the meetings of learned society.