These
appeals
relate
to
the
appellant's
1985
and
1986
taxation
years.
The
background
to
the
litigation
in
what
is
in
issue
is
set
out
in
the
reply
to
the
notice
of
appeal,
and
in
that
regard
I
refer
in
particular
to
paragraphs
1
to
10
inclusive.
1.
In
computing
his
income
for
the
1985
and
1986
taxation
years,
the
appellant
sought
to
deduct,
among
other
amounts,
the
following:
|
1985
|
1986
|
|
Allowable
business
investment
loss
|
$25,000.00
|
$25,649.00
|
|
Employment
expenses
|
|
|
Commissions
|
24,806.00
|
10,000.00
|
|
Rent
|
1,320.00
|
3,500.00
|
|
C.C.A.
|
600.00
|
600.00
|
|
Miscellaneous
|
2,670.97
|
798.64
|
|
Total
|
$54,396.97
|
$40,547.64
|
2.
By
notices
of
reassessment
dated
June
26,
1989,
the
Minister
disallowed
the
deduction
of
the
amounts
mentioned
above.
3.
By
notices
of
reassessment
dated
October
12,
1990,
the
Minister
allowed
the
appellant
a
deduction
for
rent
of
$1,320
and
of
$3,500
for
the
1985
and
1986
taxation
years
respectively
and
allowed
an
allowable
business
investment
loss
of
$17,897
for
the
1986
taxation
year.
4.
In
reassessing
tax
to
the
appellant
for
the
1985
and
1986
taxation
years,
the
Minister
made
the
following
assumptions
of
fact:
(a)
the
appellant
did
not
incur
alleged
commission
expenses
of
$24,806
and
of
$10,000
in
1985
and
1986
respectively
for
the
purpose
of
earning
income
from
employment;
(b)
the
amount
of
$17,897
was
an
allowable
business
investment
loss
in
the
appellant's
1986
taxation
year;
(c)
amounts
of
capital
cost
allowance
claimed
in
1985
and
1986
were
not
in
respect
of
property
acquired
by
that
appellant
for
the
purpose
of
gaining
or
producing
income;
(d)
miscellaneous
expenses
claimed
in
1985
and
1986
were
not
incurred
for
the
purpose
of
earning
income
but
rather
for
the
personal
use
of
the
appellant.
B.
Issue
to
be
decided
5.
The
issue
in
the
appeal
is
whether
the
Minister
properly
disallowed
the
amounts
mentioned
above.
C.
Statutory
provisions
relied
upon
by
the
respondent
and
the
reasons
the
respondent
intends
to
submit
6.
The
respondent
relies,
inter
alia,
upon
section
3,
paragraph
8(1)(f),
subsection
8(2),
paragraphs
20(1)(a)
and
39(1
)(c)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act")
and
paragraph
1102(1)(c)
of
the
Income
Tax
Regulations,
R.S.C.
1952,
c.
148,
as
amended.
7.
He
submits
that
the
alleged
commission
expenses
of
$24,806
and
of
$10,000
which
the
appellant
had
sought
to
deduct
from
his
income
in
1985
and
1986
respectively
were
properly
disallowed
by
the
Minister
by
virtue
of
subsection
8(2)
of
the
Act
as
no
such
amounts
were
expended
by
the
appellant
for
the
purpose
of
earning
income
from
his
employment
within
the
meaning
of
paragraph
8(1)(f)
of
the
Act.
8.
He
submits
that
the
respondent
properly
allowed
the
amount
of
$17,987
as
a
business
investment
loss
for
the
1986
taxation
year
by
virtue
of
paragraph
39(1)(c)
of
the
Act.
9.
He
submits
that
the
capital
cost
allowance
of
$600
which
the
appellant
had
sought
to
deduct
in
each
of
the
1985
and
1986
taxation
years
was
not
in
respect
of
property
acquired
by
the
appellant
for
the
purpose
of
gaining
or
producing
income
within
the
meaning
of
paragraph
1102(1)(c)
of
the
Income
Tax
Regulations
and
thus
properly
disallowed
by
the
Minister
in
virtue
of
paragraph
20(1)(a)
of
the
Act.
10.
He
further
submits
miscellaneous
expenses
of
$21,670.97
and
$798.64
which
the
appellant
had
sought
to
deduct
in
1985
and
1986
respectively
were
not
incurred
for
the
purpose
of
earning
income
from
employment
but
rather
personal
or
living
expenses
of
the
appellant
and
therefore
correctly
disallowed
by
the
respondent
pursuant
to
paragraph
8(1
)(f)
and
subsection
8(2)
of
the
Act.
It
was
stated
by
the
appellant
at
the
outset
of
the
hearing
that
the
only
amounts
in
issue
regarding
1985
are
the
$25,000,
$24,806
and
$600
referred
to
in
paragraph
1
of
the
reply
to
the
notice
of
appeal.
The
only
amounts
in
issue
regarding
1986
are
the
$10,000
and
the
$600
referred
to
in
that
said
paragraph.
The
amounts
of
$1,320
and
$3,500
for
rent
were
allowed
on
reassessments;
this
is
dealt
with
in
paragraph
3
of
the
reply
to
the
notice
of
appeal.
The
onus
is
on
the
appellant
to
show
that
the
reassessments
are
in
error;
this
can
be
established
on
a
preponderance
of
probabilities.
Where
the
onus
lies
has
been
settled
by
numerous
authorities
binding
on
this
Court.
It
is
sufficient
to
refer
to
two
judgments
of
the
Supreme
Court
of
Canada
in
this
regard:
Anderson
Logging
Co.
v.
The
King,
[1925]
S.C.R.
45,
[1917-27]
C.T.C.
198,
52
D.T.C.
1209;
and
Johnston
v.
M.N.R.,
[1948]
S.C.R.
486,
[1948]
C.T.C.
195,
3
D.T.C.
1182.
This
onus
has
not
been
discharged
by
what
was
placed
before
the
Court
this
morning.
I
can
assign
no
weight
to
the
document
addressed
to
"whom
it
may
concern",
dated
February
12,
1990,
and
said
to
be
signed
by
Darlene
Provost
that
was
entered
as
Exhibit
A-1.
In
this
regard,
I
note
that
Ms
Provost
was
not
called
as
a
witness.
It
follows
from
what
I
have
said
that
judgment
shall
issue
dismissing
the
appeals.
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