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Docket: 2004-642(IT)I
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BETWEEN:
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RICHARD COOK,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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____________________________________________________________________
Appeals heard on December 14, 2004 at Kitchener,
Ontario
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Before: The
Honourable Justice L.M. Little
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Appearances:
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For the
Appellant:
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The Appellant
himself
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Counsel for the
Respondent:
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John R. Shipley
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____________________________________________________________________
JUDGMENT
The appeals from the
assessments made under the Income Tax Act for the 2000 and 2001 taxation
years are allowed, without costs, in accordance with the attached Reasons for
Judgment.
Signed at
Vancouver, British Columbia, this 22nd day of December 2004.
Little
J.
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Citation: 2004TCC824
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Date: 20041222
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Docket: 2004-642(IT)I
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BETWEEN:
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RICHARD COOK,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Little J.
A. FACTS:
[1] In
the 2000 and 2001 taxation years the Appellant was employed as a sheet metal
worker by Metropolitan Sheet Metal Ltd. ("Metropolitan").
[2] The
Appellant said that in the 2000 and 2001 taxation years he and his wife lived
in Cambridge, Ontario.
[3] The
Appellant explained that his normal work routine could be summarized as
follows:
The Appellant would phone Metropolitan's
office early in the morning and obtain instructions on the location of a job
site. He would drive from his Cambridge home either to the employer's warehouse
at the corner of Weston Road and 401 Highway, Ontario where he would pick
up ductwork material or he would proceed directly to a job site as designated
by Metropolitan.
[4] The
Appellant said that during the 2000 and 2001 taxation years he was primarily
installing the ductwork for gas fired furnaces for new homes being constructed
in the Oshawa area.
[5] The
Appellant also said that on a number of occasions he was retained by other
furnace dealers to install ductwork in private residences.
[6] The
Appellant said that in the 2000 and 2001 taxation years he leased a one‑half
ton truck (the "Truck"). The Truck was used by the Appellant to carry
his tools plus ductwork supplies. The Appellant said that the Truck was used
exclusively by him for business purposes.
[7] When
the Appellant filed his income tax returns for the 2000 and 2001 taxation years
he deducted the following expenses that he had incurred in the operation of the
Truck:
2000 $ 17,839.00
2001 $ 9,973.00
[8] The
Minister of National Revenue (the "Minister") reassessed the
Appellant for the 2000 and 2001 taxation years and disallowed the expenses of
$17,839.00 and $9,973.00 that the Appellant had claimed with respect to the
operation of the Truck.
B. ISSUE:
[9] Is
the Appellant entitled to deduct any of the expenses that he incurred in the
operation of the Truck in the 2000 and 2001 taxation years?
C. ANALYSIS:
[10] Counsel for the Respondent said that the Minister disallowed the Truck
expenses claimed by the Appellant because they were considered to be expenses
primarily incurred in travelling from the Appellant's home to his employer's
place of business.
[11] The Appellant testified that between 50% – 75% of the time when he
worked for Metropolitan he would drive from Cambridge to his employer's
warehouse to obtain ductwork supplies. He would then take the ductwork supplies
to a particular job site and install the ductwork.
[12] The Appellant also noted that when he was instructed to go to a
specific job site he frequently discovered that it was impossible for him to
work at that job site and he would then be requested to drive to a different
job site.
[13] After considering the testimony of the Appellant I am satisfied that
he was required to use the Truck to pick up supplies at Metropolitan's
warehouse or to drive to different job sites. In other words, it could not be
said that all of the expenses incurred in the operation of the Truck were used
to drive from the Appellant's home to the employer's place of business. I have
concluded that the Appellant should be allowed to deduct the following amounts
in determining his income for the 2000 and 2001 taxation years:
2000 Taxation Year - Deduct 50% of $17,839.00 =
$8,919.50
2001 Taxation Year - Deduct 50% of $9,973.00 =
$4,986.50
[14] In reaching my conclusion I have determined that the Appellant would
be travelling in the performance of the duties of his employment when he
travels between Metropolitan's office and the job site where the Appellant
installs the ductwork.
[15] The appeals are allowed, without costs, to permit the Minister to
reassess the Appellant on the basis as outlined above.
Signed at Vancouver, British Columbia, this
22nd day of December 2004.
Little
J.
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