Pazaratz v. The Queen, docket 97-3617(IT)I (Informal Procedure)

97-3617(IT)I

BETWEEN:

WILLIAM PAZARATZ,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on November 25, 1998, at Toronto, Ontario, by

the Honourable Judge J.A. Brulé

Appearances

For the Appellant:                      The Appellant himself

Counsel for the Respondent:      S. O'Donnell

JUDGMENT

          The appeal from the assessment made under the Income Tax Act for the 1995 taxation year is dismissed in accordance with the attached Reasons for Judgment.

Signed at Ottawa, Canada, this 7th day of January 1999.

"J.A. Brulé"

J.T.C.C.

Date: 19990107

Docket: 97-3617(IT)I

BETWEEN:

WILLIAM PAZARATZ,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR JUDGMENT

Brulé, J.T.C.C.

[1]      This appeal, pursuant to the informal procedure respecting the Appellant's claim that he was not liable to be taxed on car expenses during the 1995 taxation year, was heard at Toronto, Ontario, on November 25, 1998. The Appellant was the only witness.

Facts

[2]      The Appellant, a government employee, used his personal vehicle in his work. He received an allowance of $7,729.00 from his employer while he claimed $10,590.27 as expenses and GST rebate of $842.22. The Appellant maintained that he received guidance from his employer and his accountant that his method of calculating income tax was correct. He furnished receipts for the car expenses. Revenue Canada told the Appellant that the $7,729.00 given to the Appellant must not be claimed by him and the GST rebate and the other income is disallowed; hence the appeal.

Issues

[3]      The issues are whether:

          (a) the Appellant is entitled to deduct the motor vehicle expenses pursuant to the Income Tax Act (the "Act"); and

          (b) the Appellant is entitled to claim a GST rebate.

Appellant's position

[4]      The Appellant relies on the information he received from his employer and accountant. He furnished receipts, admitted that the $7,729.00 was wrongfully claimed but that the rest of his claim should be honoured.

Respondent's position

[5]      The Respondent's position is quite straightforward. It is not sufficient to have receipts for expenses paid but such must be identified with the expense undertaken. The Minister of National Revenue, in his Notice of Confirmation, reiterated that the Act forbids the deduction of an amount paid to the Appellant by his employer under paragraph 8(1)(h.1) and also subsection 8(2) does not allow a deduction for this amount in calculating the Appellant's income from his employment.

Analysis

[6]      Simply stated, the Act under section 230 requires a person to keep an exact record (including a log for an automobile) to prove receipts in hand. This was not done and so Revenue Canada had no choice but to disallow the amounts between the allowance of $7,278.73 and the claimed deduction of $10,590.27. Also the Appellant did not incur eligible employment expenses on which he could claim a GST rebate.

[7]      The net result is that the appeal is dismissed.

Signed at Ottawa, Canada, this 7th day of January 1999.

"J.A. Brulé"

J.T.C.C.

COURT FILE NO.:                             97-3617(IT)I

STYLE OF CAUSE:                           William Pazaratz and H.M.Q.

PLACE OF HEARING:                      Toronto, Ontario

DATE OF HEARING:                        November 25, 1998

REASONS FOR JUDGMENT BY:     the Honourable Judge J.A. Brulé

DATE OF JUDGMENT:                     January 7, 1999

APPEARANCES:

For the Appellant:                      The Appellant himself

Counsel for the Respondent:      S. O'Donnell

COUNSEL OF RECORD:

For the Appellant:

Name:                

Firm:                 

For the Respondent:                  Morris Rosenberg

                                                Deputy Attorney General of Canada

                                                          Ottawa, Canada