Date: 19991029
Docket: 98-1479-IT-I
BETWEEN:
PHILIPPE LAROSE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Somers, D.J.T.C.C.
[1] This appeal was heard at Ottawa, Canada, on
October 6, 1999. It is an appeal under the informal
procedure from an income tax assessment for the 1996 taxation
year.
[2] In computing his income for the 1996 taxation year, the
appellant reported an amount of $33,337.91 and deducted
$13,129.00 for a net amount of $22,208.91 in respect of amounts
received from the Société de l'assurance
automobile du Québec (SAAQ).
[3] The point at issue is whether the appellant must include
the amount of $22,208.91 in computing his income for the 1996
taxation year.
[4] In assessing the appellant's return of income for the
1996 taxation year, the Minister of National Revenue (the
"Minister") made in particular the following
assumptions of fact, which were either admitted or denied by the
appellant:
[TRANSLATION]
(a) during a taxation year prior to the 1996 taxation year,
the appellant's mother and sister were involved in a car
accident which left them seriously injured; (admitted)
(b) during the 1996 taxation year, the appellant's mother
and sister were completely dependent on the appellant with
respect to their essential activities of everyday life;
(admitted)
(c) during the 1996 taxation year, the appellant supported and
provided care to his mother and sister; (admitted)
(d) during the 1996 taxation year, the appellant received an
amount of $33,337.91 directly from the SAAQ as a reimbursement of
expenses incurred for the personal home assistance which he
provided to his mother and sister during the said taxation year;
(admitted)
(e) the amount of $22,208.91 is not an amount which may be
excluded in computing the appellant's income under
subsection 81(1) of the Income Tax Act (the
"Act") for the 1996 taxation year; and (denied)
(f) the amount of $22,208.91 must be included in computing the
appellant's income for the 1996 taxation year. (denied)
[5] The appellant admitted all the facts on which the Minister
relied in assessing his 1996 return of income.
[6] The appellant, a Quebec resident, said he received the sum
of $33,337.91 under section 79 of the Automobile
Insurance Act (c. A-25), which reads as
follows:
79. Where, by reason of the accident, a victim's
physical or mental condition warrants the continual attendance of
another person or renders him unable to care for himself or
perform, without assistance, the essential activities of everyday
life, he is entitled to the reimbursement of expenses incurred
for personal home assistance.
Expenses are reimbursed on presentation of vouchers and
according to the standards, conditions and maximum amounts
prescribed by regulation. However, no reimbursement may exceed
$555 per week.
In the cases prescribed by regulation, the
Société may replace the reimbursement of expenses
by an equivalent weekly allowance.
[7] In claiming that this amount should be excluded from his
income, the appellant relies on section 494 of the Quebec
Taxation Act which reads in part as follows:
494. Income from personal injury award property.
– An individual is not required to include in computing
his income the income for the year from property acquired by or
on behalf of a person as indemnity for, or pursuant to an action
for, damages in respect of physical or mental injury to the
person, or from any property substituted for the first property
and any taxable capital gain for the year from the disposition of
any such property,
. . .
[8] The Minister relies on subsection 81(1) of the
Income Tax Act in computing the appellant's income for
the year in issue.
[9] Subsection 81(1) reads as follows:
SECTION 81: Amounts not included in income.
(1) There shall not be included in computing the income
of a taxpayer for a taxation year,
. . .
(q) Provincial indemnities – an amount
paid to an individual as an indemnity under a prescribed
provision of the law of a
province . . . .
[10] Under section 6501 of the Income Tax
Regulations, for the purposes of
paragraph 8(1)(q) of the Income Tax Act,
"prescribed provision of the law of a province"
means:
(j) in respect of the Province of Quebec
(i) sections 5, 5b and 14 of the Crime Victims
Compensation Act, S.Q. 1971, c. 18, and
(ii) sections 13 and 26, subsection 37(1) and sections 44 and
54 of the Automobile Insurance Act, S.Q. 1977, c. 68;
. . .
[11] Subsection 81(1) of the Income Tax Act lists
items that are not to be included in computing a taxpayer's
income. More specifically, paragraph 81(1)(q) of the
Income Tax Act excludes in computing income indemnities
paid under the prescribed law of a province. Under
section 6501 of the Income Tax Regulations, in
respect of Quebec, indemnities paid under the sections and
subsections stated therein of the Automobile Insurance Act
are not taxable. Those provisions concern compensation for bodily
injury. Section 79 of the Automobile Insurance Act is
not included in section 6501 of the Income Tax
Regulations.
[12] Although the services which the appellant rendered to the
members of his family are very laudable, the Court cannot
disregard the Income Tax Act and the Income Tax
Regulations.
[13] The appellant must include the amount of $22,208.91 in
computing his income for the 1996 taxation year under
section 3 of the Income Tax Act.
[14] The appeal is accordingly dismissed.
Signed at Ottawa, Canada, this 29th day of October 1999.
"J.F. Somers"
D.J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 31st day of August
2000.
Erich Klein, Revisor
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