Brulé,
T.C.C.J.:—
This
is
an
appeal
from
an
assessment
of
income
tax
for
the
1990
taxation
year
in
which
the
appellant
elected
to
proceed
under
the
informal
procedure
provisions
of
the
Tax
Court
of
Canada
Act.
In
his
return
of
income
for
the
year,
the
appellant
claimed
expense
deductions
of
$10,046.89
which
sum
was
disallowed.
Facts
The
appellant
is
a
retired
businessman
who
conducts
investments
of
his
securities
from
an
office
in
his
home.
At
the
same
time
he
performs
the
same
tasks
for
his
wife.
Exception
was
taken
by
Revenue
Canada
to
the
deductions
because
there
were
few
substantiating
receipts,
the
amounts
were
too
high
or
estimated
in
some
instances
and
certain
amounts
claimed
were
properly
capital
in
nature.
Law
The
two
provisions
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act")
primarily
dealing
with
expense
deductions
are
paragraph
18(1)(a)
and
section
67.
These
are
as
follows:
18.
General
limitations.—(1)
In
computing
the
income
of
a
taxpayer
from
a
business
or
property
no
deduction
shall
be
made
in
respect
of
(a)
an
outlay
or
expense
except
to
the
extent
that
it
was
made
or
incurred
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income
from
the
business
or
property;
67.
General
limitation
re
expenses.—
In
computing
income,
no
deduction
shall
be
made
in
respect
of
an
outlay
or
expense
in
respect
of
which
any
amount
is
otherwise
deductible
under
this
Act,
except
to
the
extent
that
the
outlay
or
expense
was
reasonable
in
the
circumstances.
In
addition
to
the
above
the
provisions
of
subsection
230(1)
of
the
Act
must
be
considered.
230.
Books
and
records.—
(1)
Every
person
carrying
on
business
and
every
person
who
is
required,
by
or
pursuant
to
this
Act,
to
pay
or
collect
taxes
or
other
amounts
shall
keep
records
and
books
of
account
(including
an
annual
inventory
kept
in
prescribed
manner)
at
his
place
of
business
or
residence
in
Canada
or
at
such
other
place
as
may
be
designated
by
the
Minister,
in
such
form
and
containing
such
information
as
will
enable
the
taxes
payable
under
this
Act
or
the
taxes
or
other
amounts
that
should
have
been
deducted,
withheld
or
collected
to
be
determined.
Analysis
First
of
all
dealing
with
the
home
office
expenses,
an
amount
of
$1,786.07
was
Claimed
on
the
basis
that
/s
of
the
house
space
was
office,
or
some
500
sq.
ft.
In
evidence
it
was
established
that
the
space
was
closer
to
300
sq.
ft.
and
therefore
only
/s
of
the
amount
claimed
is
allowed
or
$1,071.64.
Insofar
as
the
expenses
for
the
automobile,
office
expenses
and
computer
supplies,
postage,
telephone,
parking,
soliciting
and
promotion,
and
miscellaneous
expenses
there
were
insufficient
details
presented
to
the
Court
to
allow
the
amounts
claimed.
Receipts
are
necessary.
There
is
no
doubt
that
some
legitimate
expenses
were
incurred
but
without
proper
evidence
it
is
difficult
to
make
an
allowance.
Recognizing
this
however
the
Court
allows
the
sum
of
$1,000
for
these
categories.
Dues
and
subscriptions
to
magazines
and
newspapers
are
not
deductible
items.
See
Vatcha
v.
M.N.R.,
[1991]
1
C.T.C.
2413,
91
D.T.C.
653
(T.C.C.).
These
items
are
considered
on
capital
account.
See
Canada
v.
Young,
[1989]
1
C.T.C.
421,
89
D.T.C.
5234
(F.C.A.).
Also
the
claimed
expenses
for
legal
fees
and
insurance
premiums
are
capital
items
not
to
be
deducted
from
income.
While
cases
cited
by
counsel
for
the
appellant
may
have
merit
relating
to
their
individual
circumstances
such
have
been
overruled
(e.g.,
Wilson
v.
M.N.R.,
[1980]
C.T.C.
2431,
80
D.T.C.
1379
(T.R.B.))
or
have
no
direct
application
to
this
case.
The
result
is
that
of
the
$10,046.89
claimed
a
total
amount
of
$2,071.64
is
allowed.
The
matter
will
be
referred
back
to
the
Minister
of
National
Revenue
for
reconsideration
and
reassessment.
No
costs
are
allowed.
Appeal
allowed
in
part.
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