Sarchuk
J.T.C.C.:—This
is
an
appeal
by
Mr.
Azizullah
Hafizy
from
an
assessment
of
tax
with
respect
to
his
1989
taxation
year.
Pursuant
to
the
provisions
of
section
18.1
of
the
Tax
Court
of
Canada
Act,
R.S.C.
1985,
c.
T-1,
Hafizy
has
elected
to
have
the
informal
procedure
apply.
Hafizy
appeared
unrepresented.
Mr.
Hafizy
failed
to
file
a
return
of
income
for
his
1989
taxation
year
as
required
and
thus
pursuant
to
subsection
152(7)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act"),
the
Minister
of
National
Revenue
(the
Minister)
issued
a
notice
of
assessment
dated
February
13,
1992
in
respect
of
the
taxation
year
in
issue.
On
March
19,1992
Hafizy
filed
a
return
of
income
for
the
1989
taxation
year
and
in
it
claimed
a
deduction
of
$50,170.46
for
employment
expenses.
On
September
4,1992
the
Minister
reassessed
to
allow
the
sum
of
$19,943.87.
Hafizy
filed
a
notice
of
objection,
produced
additional
material
to
officials
of
Revenue
Canada
and
by
further
reassessment
dated
May
18,
1993
the
Minister
reassessed
Hafizy's
taxes
to
allow
additional
employment
expenses
in
the
amount
of
$6,728
for
a
total
of
$26,672.45.
At
all
relevant
times
Hafizy
was
a
commissioned
real
estate
salesman
associated
first
with
Century
21
Realty
Inc.
and
then
for
the
greater
portion
of
1989
with
Re/Max
Advance
Realty
Inc.
Five
principal
areas
are
in
dispute:
(a)
Auto
expenses
Hafizy
originally
claimed
$15,091.34
with
no
personal
use
allocation.
The
Minister
determined
that
the
maximum
business
use
of
the
vehicle
was
85
per
cent
and
allowed
expenses
of
$4,663.10.
At
trial
Hafizy
reduced
the
gas
and
oil
expenses
from
$9,138
to
$2,700.
Thus
with
some
other
minor
adjustments
he
now
claims
total
auto
expenses
of
$8,652.
None
of
the
additional
amounts
in
excess
of
those
allowed
by
the
Minister
were
supported
by
vouchers
nor
was
any
other
evidence
of
substantive
nature
adduced
in
support
thereof.
The
quality
of
this
evidence
can
best
be
demonstrated
by
reference
to
an
item
captioned
“leasing”.
Hafizy
claimed
$4,200.
Counsel
for
the
Minister
produced
a
letter
from
General
Motors
dated
January
28,
1993
(Exhibit
R-2)
indicating
that
the
amount
of
$2,450
was
paid
by
Hafizy
to
lease
a
Pontiac
Tempest
for
a
period
of
eight
months.
He
asserted
that
when
employed
by
Century
21
during
the
first
two
or
three
months
of
that
year
he
had
leased
a
different
vehicle
from
another,
unnamed
company.
No
receipts,
vouchers
or
other
evidence
supporting
this
assertion
were
produced.
I
note
also
that
in
the
return
he
ultimately
submitted,
Hafizy
produced
“declarations
of
conditions
of
employment”
which
were
inconsistent
with
his
assertions.
What
the
truth
of
the
matter
is
is
impossible
to
determine
on
the
evidence
before
me.
(b)
Accounting
and
legal
fees
The
Minister
disallowed
approximately
$1,051
in
this
category.
No
explanation
of
any
value
was
forthcoming
from
Hafizy
as
to
the
nature
of
the
additional
expenses
or
their
deductibility.
(c)
Advertising
and
promotion
The
appellant
claimed
$8,128
under
this
head.
The
Minister
allowed
$4,718.
The
balance
of
the
expenses
were
admittedly
unvouchered.
Again
the
evidence
adduced
by
Hafizy
was
not
adequate
to
warrant
any
change
to
the
amount
allowed.
(d)
The
last
and
primary
item
in
issue
relates
to
expenses
under
the
head
of
"Rent
and
royalty".
The
contractual
arrangement
between
Hafizy
and
Re/Max
Advance
Realty
required
him
to
pay
his
proportionate
share
of
office
expenses
and
other
fees.
Hafizy
claimed
the
amount
of
$22,205
under
this
head
and
supported
his
claim
by
vouchers
totalling
$10,373.
The
Minister,
after
reviewing
all
of
the
appellant’s
submissions
and
documents
at
the
objection
stage,
allowed
the
amount
of
$14,820.
At
trial
Hafizy
claimed
two
further
amounts,
$4,107
and
$7,000,
under
this
head.
As
I
understood
his
testimony
these
expenses
were
never
previously
claimed
or
reported
because
proof
of
them
had
not
been
readily
available
prior
to
this
time.
However
in
the
course
of
his
later
submissions
to
the
Court
Hafizy
appeared
to
alter
his
stance
stating
that
some
of
these
had
been
included
in
the
amounts
he
previously
claimed.
At
best
his
evidence
can
be
described
as
confusing,
unclear
and
disorganized.
He
produced
a
bundle
of
receipts,
for
example,
relating
to
car
expenses,
but
was
unable
to
isolate
those
that
had
been
included
by
the
Minister
in
the
expenses
allowed
and
those
which
he
suggested
had
not
been.
The
same
applied
to
some
material
he
produced
with
respect
to
the
rent
and
royalty
expenses.
On
balance
the
evidence
falls
short
of
establishing
the
appellant's
case.
Section
230
of
the
Income
Tax
Act
requires
that
a
taxpayer
keep
books
of
account
so
that
the
Minister
may
verify
the
validity
of
the
expenses
claimed
and
thus
establish
the
amount
of
tax
payable.
I
do
not
suggest
for
a
moment
that
a
taxpayer
must
keep
each
and
every
receipt,
however
if
he
fails
to
do
so
his
evidence
as
to
any
additional
amounts
claimed,
but
unvouchered,
should
be
cogent,
reasonable
and
plausible.
That
is
not
the
case
here.
Since
this
taxpayer
has
not
supplied
the
respondent
nor
the
Court
with
such
reasonably
required
substantiation
of
his
claims
he
is
not
entitled
to
succeed
in
his
appeal.
It
is
fundamental
to
the
taxing
system
that
since
individuals
earning
commission
income
are
permitted
to
deduct
certain
expenses
under
the
Act
that
are
not
permitted
to
other
individuals
or
employees,
the
responsibility
reciprocally
assumed
by
those
earning
such
commission
income
is
to
maintain
records
and
documentation
in
support
of
such
expenses
and
to
provide
them
when
challenged
to
do
so
by
the
Minister
(Litvinchuk
v.
M.N.R.,
[1979]
C.T.C.
3141,
79
D.T.C.
899
(T.R.B.)).
That
is
particularly
so
when,
as
here,
a
taxpayer
is
claiming
expenses
in
excess
of
$50,000
(indeed
if
the
additional
amounts
he
referred
to
during
the
course
of
his
testimony
were
included
the
amount
would
be
closer
to
$60,000)
as
contrasted
to
gross
revenues
of
some
$80,000
in
that
year.
The
onus
is
on
the
appellant
to
prove
that
the
Minister’s
assessment
is
wrong.
Hafizy’s
testimony
was
not
in
my
view
sufficient
to
establish
on
a
balance
of
probabilities
that
he
did
in
fact
expend
the
amounts
claimed.
He
produced
virtually
no
receipts
or
vouchers
to
account
for
the
extra
expenses
claimed
but
leaves
it
to
the
Minister
of
National
Revenue
and
this
Court
to
accept
his
word
for
what
has
been
disbursed.
Income
tax
assessing
is
not
meant
to
be
guess
work.
He
alone
knew
how
much
he
had
spent
and
provided
no
means
of
verifying
his
alleged
extra
expenditures.
Absent
the
necessary
evidence
the
Court
can
reach
no
other
conclusion
but
that
the
assessment
was
correct
and
the
appeal
must
be
dismissed.
As
my
colleague
Taylor
J.
stated
in
Stevens
v.
The
Queen
(unreported):
To
my
knowledge
the
Income
Tax
Act
does
not
impose
on
the
employees,
officers
and
officials
of
Revenue
Canada
an
obligation
to
start
from
ground
zero
and
perform
not
merely
a
review
of
affairs,
but
virtually
a
reconstruction
of
the
financial
side
of
a
business
operation
in
an
effort
to
provide
as
fair
a
picture
as
possible
for
the
assessment
of
a
taxpayer.
To
this
I
add
nor
is
that
the
role
of
the
Court.
Appeal
dismissed.
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