Prévot v. The Queen, docket 1999-1207-GST-I (Informal Procedure)

[OFFICIAL ENGLISH TRANSLATION]

1999-1207(GST)I

BETWEEN:

PIERRE PRÉVOT,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on May 2, 2000, at Montréal, Quebec, by

the Honourable Judge P.R. Dussault

Appearances

For the Appellant:                                The Appellant himself

Counsel for the Respondent:                Gérald Danis

JUDGMENT

          The appeal from the assessment made under the Excise Tax Act, notice of which bears number 03404274 and is dated December 19, 1996, is dismissed.

Signed at Ottawa, Canada, this 12th day of May 2000.

"P.R. Dussault"

J.T.C.C.

Translation certified true

on this 23rd day of July 2003.

Sophie Debbané, Revisor

[OFFICIAL ENGLISH TRANSLATION]

Date: 20020322

Docket: 1999-1207(GST)I

BETWEEN:

PIERRE PRÉVOT,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR JUDGMENT

(delivered orally from the bench

on May 2, 2000, at Montréal, Quebec,

and revised on March 22, 2002)

P.R. Dussault, J.T.C.C.

[1]      Mr. Prévot, I must dismiss the appeal for the following reasons. First of all, with regard to the Reply to the Notice of Appeal, which contains the exact amounts, there was a total of $3,888.56 in adjustments to net tax compared to what had been reported. So you have the revised amount of net tax in paragraph 8, page 3, of the Reply to the Notice of Appeal, which is an amount of $4,316.75, to which were added a penalty of $673.95 and interest of $667.63 under section 280 of the Excise Tax Act (the "Act").

[2]      I dismiss the appeal for the following reasons. First, with respect to the adjustments of net tax and input tax credits, you do not dispute the amounts of the adjustments, except those mentioned in paragraphs 14.9 to 14.12 of the Reply to the Notice of Appeal. Paragraphs 14.9 to 14.12 refer to a check of bank deposits compared to sales reported in the statement of income and expenses. It was determined that there were differences of $27,022.93 for 1993 and $15,430.19 for 1994. You explained those differences as being the result of deposited amounts that were received from your parents and that had been kept in your safety deposit box prior to depositing them. The respondent filed in evidence Exhibit I-1, which shows a certain number of bank drafts totalling $20,052.26 between 1991 and 1993.

[3]      There were four drafts as follows: an amount of $16,756.03, converted to Canadian dollars, on April 9, 1991; an amount of $1,823.88 dated December 27, 1991; an amount of $706.42 dated May 27, 1992; and an amount of $765.93 on January 6, 1993. The other documents concern money that was purportedly received thereafter.

[4]      In particular, the last document shows an account transfer made only in 1996, whereas the years that concern us are 1993 and 1994. Thus, in this case there are four drafts for an amount of $20,052.26 that you received between 1991 and 1993, and of which we have proof. The difference comes out to $42,453.12. There is an unexplained difference of $22,400.86. I have absolutely no evidence concerning the source of those deposits; no one has informed me of anything whatever.

[5]      With respect to the drafts, I have evidence that this money was received between 1991 and 1993. The largest amount, as I said a moment ago, was received in 1991 on April 9, and it is an amount of $16,756.03. There are other amounts, that is, an amount of $1,823 in 1991 and two other drafts for approximately $700 in 1992 and for $765 in 1993.

[6]      While I believe, as you said, that you in fact received that money from your parents, and the documents moreover prove it, I have absolutely no evidence that those amounts were deposited from your safety deposit box in 1993 and 1994. And I have no evidence that even a portion might have been deposited to your account in 1993 and 1994, instead of in 1991 and 1992. If you had been able to prove that, I might have allowed that portion, but, as you were unable to prove it, I am regrettably obliged to dismiss the appeal.

[7]      It was not proof that the amounts were received as gifts that I needed; I have that evidence. I know that most of the money was received in 1991 and very little, $1,500 at most, in 1992 and 1993. So, for 1991, you are able to prove that you took that money and deposited it in your safety deposit box in 1991. I am willing to believe that those amounts were not withdrawn until 1993 and 1994, but I would have needed slightly more convincing evidence in order to tell me, "Well, perhaps only $10,000 was deposited in 1993 and 1994, not $18,000," and so on. Consequently, since you cannot prove this to me, I must regrettably dismiss the appeal.

[8]      You may perhaps blame your accountants, but I received no evidence of due diligence either that would have enabled me to suspend the application of the penalty under section 280 of the Act. It must be kept in mind that an accountant is above all a mandatary¾that the mandator is still responsible for the mandatary, for the mandatary's acts, such that, from the moment one realizes that something is wrong, it must be changed and changed quickly because it can have fairly disastrous consequences. So there it is. Unfortunately, no other decision can be rendered in the circumstances.

Signed at Ottawa, Canada, this 22nd day of March 2002.

"P.R. Dussault"

J.T.C.C.

Translation certified true

on this 23rd day of July 2003.

Sophie Debbané, Revisor