Date: 20000926
Docket: 1999-4364(IT)I
BETWEEN:
ELISABETH V. ATSAIDIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Beaubier, J.T.C.C.
[1] This appeal pursuant to the
Informal Procedure was heard at Toronto, Ontario on September 21,
2000. The Appellant was the only witness. Paragraphs 6 to 12
inclusive of the Reply set out the matters in issue in this
appeal. They read:
6. In
computing income for the 1997 taxation year the Appellant
deducted $2,750.00 on account of moving expenses.
7. The
Minister reassessed the Appellant's 1997 taxation year by
Notice dated November 17, 1998, to disallow the moving expenses
of $2,750.00.
8. In so
reassessing the Appellant, the Minister relied on, the following
assumptions of fact:
a) the
Appellant moved from Vancouver, British Columbia ("Old
Residence") to Oakville, Ontario, ("New
Residence") on or about June 25, 1997;
b) the
Appellant flew from the Old Residence to Toronto, Ontario on June
25, 1997;
c) the
Appellant obtained one business class airline seat by redeeming
frequent flyer points which the Appellant had accumulated through
personal expenditures and personal travel;
d) the
Appellant did not support by way of voucher the $750.00 for
accommodations and the $500.00 for meals claimed as temporary
living expenses which she deducted and which the Minister
disallowed in her 1997 taxation year;
e) the
Appellant commenced work at the New Residence location in
November, 1997;
f) the
Appellant was not paid an allowance or any form of reimbursement
by her employer in respect to any moving expenses;
g) the
Appellant's income at the new work location for the 1997
taxation year was $7,500.00.
B. ISSUES TO
BE DECIDED
9. The issue
is whether the Appellant is entitled to deduct moving expenses of
$2,750.00 for the 1997 taxation year.
C. STATUTORY
PROVISIONS RELIED ON
10. He relies on section
62 of the Income Tax Act, R.S.C. 1985, c. 1
(5th Supp.), as amended (the
"Act").
D. GROUNDS RELIED ON
AND RELIEF SOUGHT
11. He respectfully
submits that the Appellant is not entitled to deduct an imputed
value for the airline ticket as a cost of moving from the Old
Residence to the New Residence on the basis that the value of
redeemed frequent flyer points are not considered to be amounts
paid for the purpose of moving expenses under section 62 of the
Act.
12. He submits that the
temporary accommodation and meal expense were an estimated amount
and that the Appellant is not entitled to this expense as the
expense was not incurred within the meaning of subsection 62(3)
of the Act.
He requests that the appeal be dismissed.
[2] Assumptions (a) to (f) inclusive
are correct. Assumption (g) was not refuted by the Appellant.
Section 62 of the Income Tax Act reads:
62.(1) Where a taxpayer has, at any time,
commenced
(a) to carry
on a business or to be employed at a location in Canada (in this
subsection referred to as "the new work location"),
or
(b) to be a
student in full-time attendance at an educational institution (in
this subsection referred to as "the new work location")
that is a university, college or other educational institution
providing courses at a post-secondary school level,
and by reason thereof has moved from the residence in Canada
at which, before the move, the taxpayer ordinarily resided (in
this section referred to as "the old residence") to a
residence in Canada at which, after the move, the taxpayer
ordinarily resided (in this section referred to as "the new
residence"), so that the distance between the old residence
and the new work location is not less than 40 kilometres greater
than the distance between the new residence and the new work
location, in computing the taxpayer's income for the taxation
year in which the taxpayer moved from the old residence to the
new residence or for the immediately following taxation year,
there may be deducted amounts paid by the taxpayer as or
on account of moving expenses incurred in the course of
moving from the old residence to the new residence, to the extent
that
(c) they were
not paid on the taxpayer's behalf by the taxpayer's
employer,
(d) they were
not deductible by virtue of this section in computing the
taxpayer's income for the preceding taxation year,
(e) they
would not, but for this section, be deductible in computing the
taxpayer's income,
(f) the total
of those amounts does not exceed
(i) in any
case described in paragraph (a), the taxpayer's income
for the year from the taxpayer's employment at the new work
location or from carrying on the new business at the new work
location, as the case may be, or
(ii) in any case
described in paragraph (b), the total of amounts required
to be included in computing the taxpayer's income for the
year by virtue of paragraphs 56(1)(n) and (o),
and
(g) any
reimbursement or allowance received by the taxpayer in respect of
those expenses is included in computing the taxpayer's
income.
(2) Where a taxpayer
would, if subsection (1) were read without reference to paragraph
(a) thereof and
(a) if the
reference therein to "moved from the residence in Canada at
which" were read as a reference to "moved from the
residence at which", or
(b) if the
reference therein to "to a residence in Canada at
which" were read as a reference to "to a residence at
which",
be entitled to deduct an amount by virtue of that subsection
in computing the taxpayer's income for a taxation year, that
amount may be deducted in computing the taxpayer's income for
the year.
(3) In subsection
(1), "moving expenses" includes any expenses incurred
as or on account of
(a) travel
costs (including a reasonable amount expended for meals and
lodging), in the course of moving the taxpayer and members of the
taxpayer's household from the old residence to the new
residence,
(b) the cost
to the taxpayer of transporting or storing household effects in
the course of moving from the old residence to the new
residence,
(c) the cost
to the taxpayer of meals and lodging near the old residence or
the new residence for the taxpayer and members of the
taxpayer's household for a period not exceeding 15 days,
(d) the cost
to the taxpayer of cancelling the lease by virtue of which the
taxpayer was the lessee of the old residence,
(e) the
taxpayer's selling costs in respect of the sale of the old
residence, and
(f) where the
old residence is being or has been sold by the taxpayer or the
taxpayer's spouse as a result of the move, the cost to the
taxpayer of legal services in respect of the purchase of the new
residence and of any taxes imposed on the transfer or
registration of title to the new residence,
but, for greater certainty, does not include costs (other than
costs referred to in paragraph (f)) incurred by the
taxpayer in respect of the acquisition of the new residence.
(emphasis added)
The word "amount" is defined in subsection 248(1) of
the Income Tax Act as follows:
"amount" means money, rights or things expressed in terms of
the amount of money or the value in terms of money of the right
or thing, except that, ...
[3] The Appellant's claim for a
business class airline seat in the amount of $1,500.00 was
claimed in her income tax return. The Appellant admitted that she
just guessed at the amount of $1,500.00. Then she said that her
secretary recently phoned the airline and told her that the value
of the seat was $3,323.00. She added more hearsay that on the day
of trial the cost of the seat was $1,872.25. The result is that
the Court has no evidence of even the retail value of the seat on
the date of the Appellant's flight. The Appellant failed to
prove anything respecting the actual amount of "travel
costs" relating to her claim for the airline seat except
that she testified that she flew that day. For this reason, this
claim is dismissed.
[4] The Appellant is a lawyer of
considerable experience in business and tax law. Despite the
clarity of the assumptions respecting matters in dispute, she did
not submit any vouchers or receipts respecting meals or
accommodation to refute assumption (d). She admitted that when
she arrived in Toronto with her new baby she stayed with family
but said that nonetheless, she ate all her meals in restaurants.
She claimed a round number of $500.00 based on her estimate of
$33.00 per day. She also claimed that she had credit card
receipts supporting all or part of the $500.00 claim but did not
present any to Revenue Canada. She did not present any to the
Court either. In view of her failure to present these alleged
receipts to the Court, despite the clear warning in the
assumption, the claim alleging $500.00 in meal expenses is
dismissed. She did not substantiate her claim in any way and her
unsupported estimate is not accepted.
[5] The Appellant's claim for
$750.00 on account of accommodation is more complicated. She and
her husband rented a furnished house for one month for $1,500.00
while waiting for a permanent home. She alleged that he paid and
deducted $750.00 and she paid $750.00. Her cheque or receipt for
the $750.00 was not submitted as evidence.
[6] Paragraph 62(3)(c) of the
Income Tax Act allows a deduction for lodging for a period
not exceeding 15 days. The Appellant's husband paid for and
was allowed a deduction for 15 days and it appears that paragraph
62(3)(c) also permits the Appellant to claim a second 15
days. But, once again, the Appellant did not present a copy of a
cheque or a receipt of her own respecting the 15 days she claims,
despite the clear warning contained in assumption (d). In other
words, she did not substantiate her testimony in any way and
without such substantiation, the Appellant's testimony is not
accepted.
[7] The appeal is dismissed.
Signed at Ottawa, Canada this 26th day of September 2000.
J.T.C.C.
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