Keillor v. The Queen, docket 96-4460-IT-I (Informal Procedure)

Date: 19980731

Docket: 96-4460-IT-I

BETWEEN:

FORD KEILLOR,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Brulé, J.T.C.C.

[1] This is an appeal for the 1991 and 1992 taxation years in which the Appellant claimed certain business expenses which were disallowed by the Minister of National Revenue (the "Minister") and an amount of added unreported income was included in the reassessment.

Facts

[2] The Appellant had a proprietorship known as Dayford Sales and as well a corporation known as Omacron Industries Ltd. The gross income and expenses were shared by the two entities as to 30% to the proprietorship and 70% to the Corporation.

Issues

[3] The issues were:

1) whether expenses in excess of the amount allowed by the Minister were incurred by the Appellant for the purpose of gaining or producing income from a business or property;

2) whether the Appellant failed to report amounts received as income in the 1991 and 1992 taxation years.

Analysis

[4] At the trial the Minister, verified by the Reply to Notice of Appeal, allowed the Appellant certain amounts of those claimed while disallowing over $12,000 principally described as a vehicle lease, main repairs but without vouchers, market research and development and bad debts. There were no supporting documents to show the shared expenses in the ratio claimed above.

[5] The Appellant claimed ignorance in accounting as did his wife and to a certain extent his mother and so the Court issued the Order of February 26, 1998.

[6] The result of the Order was that certain adjustments were made by Revenue Canada as set out in the letter of Dona Gilbertson of April 28, 1998.

[7] Mr. Keillor then on June 26, 1998 faxed to the Court a letter providing further evidence, in his mind at least, of adjustments which should have been made. He had his opportunity at the trial and his faxed evidence cannot be accepted by the Court.

[8] The appeal is allowed as to the amounts set out in the Judgment and in all other respects is dismissed. The matter will be returned to the Minister for reconsideration and reassessment.

Signed at Ottawa, Canada, this 31st day of July 1998.

"J.A. Brulé"

J.T.C.C.