[OFFICIAL ENGLISH TRANSLATION]
Date: 20020610
Docket: 2001-1879(GST)I
BETWEEN:
JACQUES AUBÉ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
(Delivered orally from the bench on February 22,
2002, at Ottawa, Ontario, and revised in Ottawa, Ontario, on June
10, 2002.)
Lamarre, J.T.C.C.
[1] The appellant is appealing from an
assessment made on March 19, 2001, by the Minister of
National Revenue ("Minister") under Part IX of the Excise
Tax Act ("Act") for the period from
January 1, 1994, to December 31, 1996. It had
been determined therein by means of the net worth method that the
appellant had a tax liability of $1,260.36 under the Goods and
Services Tax ("GST") system in connection with his business's
unreported sales.
[2] On the day of the hearing, counsel
for the respondent informed the Court that the amount was now
reduced to $244.97. The appellant did not accept that amount.
Rather, he argued that he was the one who was entitled to a
refund. According to his calculations, the amount for personal
expenses in the statement of net worth was too high. According to
him, the amounts in question ($6,557 in 1994, $6,693 in 1995 and
$6,693 in 1996) were included twice by the Department since they
had also been recorded under the business's operating
expenses.
[3] On cross-examination, the
appellant nonetheless admitted that the entire personal portion
of his expenses had not been recorded in the business's
operating expenses in the statement of net worth. It was in fact
shown that the Department had taken the amounts indicated in the
appellant's tax returns, which did not include the personal
portion. This was admitted at pages 41, 42, 48, 49, 51, 55, 56
and 57 of the transcript, in the following passages:
[TRANSLATION]
Pages 41 and 42
21
BY Me BOUCHER:
...
24
Q. I have your tax
return here.
25 First, 1994. I do
not have any other copies. These are
1 the
Revenue Canada documents. Is this your tax
2
return?
3
A. Yes, I think I have
one here.
4
Q. I have some
questions.
5
A. All right.
Page 48
6
Q. So your personal
expenses are
7 not
included in the garage's activities?
8
A. I must admit you're
right.
9 In
looking at the page here, you're right, I apologize.
10 I don't . . .
11
Q. Are we looking at
1995 also?
12
A. 1995, yes.
Page 49
13
Q. For the garage, in
1995, there are no
14 personal expenses
included, is that correct? We will
15 get to the rent
later.
16
A. I would need to talk
to the person
17 who prepared my
tax returns. That is a fact. But
18 I don't . . .
Page 51
8
THE COURT: And that is what appears in
9 the
net worth also.
10
So the personal portion does not appear under
11 the operating
expenses for 1995.
...
17
THE COURT: But you admit, sir,
18 that this was not
included in the operating expenses?
19
THE WITNESS: I admit it.
Page 55
10
BY Me BOUCHER:
11
Q. Same thing for 1996?
...
18
Q. There were no
personal
19 expenses?
20
A. I have not seen them
yet. "Total
21 tax deducted". .
. I'm looking at 1994!
22 --- (brief
pause)
23 I don't see any
here.
Pages 56 and 57
22
THE COURT: Well then, sir, we see that the
23 operating expenses in
Schedule A of the Statement of
24 Personal Net Worth do
not include the personal
25 expenses since those
amounts were taken
1 from your
tax returns.
2
THE WITNESS: I agree.
[4] I therefore conclude that the
operating expenses that appear in Schedule A of the statement of
net worth (Exhibit A-1) do not include the personal expenses and
reflect the amounts reported in the appellant's tax returns.
Therefore, the personal expenses were not recorded twice.
[5] Although the appellant stated that
there were a number of errors in the statement of net worth, it
seems that those errors had been corrected by the respondent in
arriving at a final figure of $244.97 as the tax payable in
connection with the business's unreported sales. At least,
the appellant was unable to convince me otherwise.
[6] For these reasons, it is my view
that the appeal should be allowed to take into account the last
change made by the respondent's counsel at the hearing. The
amount of the tax liability under the GST system for the period
from January 1, 1994, to December 31, 1996, in connection with
the understated sales of the appellant's business is therefore
$244.97.
Signed at Ottawa, Canada, this 10th day of June 2002.
J.T.C.C.
Translation certified true
on this 28th day of August 2003.
Sophie Debbané, Revisor
Email this Content