De Cloet Limited v. Minister of National Revenue, [1989] 1 CTC 2308, 89 DTC 207

Sarchuk, T.C.J.:—The appellant De Cloet Ltd. appeals from reassessments of income tax with respect to its 1980, 1981, 1982 and 1983 taxation years. Two separate and distinct issues are raised in these appeals.

At all material times De Cloet Ltd. carried on business as a manufacturer of equipment for use by tobacco farmers. In particular it was engaged in the production of self-contained tobacco drying kilns which it leased, as part of its ordinary business, to persons who used the kilns to dry and cure harvested tobacco. In determining its income for the taxation years in issue the appellant included the kilns that were being leased to its customers in the class of assets described in Class 29 of Schedule II of the Income Tax Regulations (Regulations) and claimed a deduction under paragraph 20(1)(a) of the Income Tax Act (the Act).

The respondent reassessed on the basis that, as the kilns were leased by the appellant to farmers who used them to cure tobacco leaves for sale, they were used in “farming” within the meaning of subsection 1104(9) of the Regulations and are therefore specifically excluded from inclusion in Class 29 by virtue of that provision. The respondent reclassified the cost of kilns manufactured by the appellant and leased from it during the years in issue from Class 29 to Class 8 of Schedule II.

I propose to deal with this issue first. Equipment may be included in Class 29 of Schedule II to the Regulations if it would otherwise be included in Class 8 of Schedule II to the Regulations, and if it is manufactured by the taxpayer, and is leased in the ordinary course of carrying on business in Canada to a lessee who uses the equipment primarily in the manufacturing or processing of goods for sale or lease. Paragraph (c) of Class 8 includes a building that is a kiln acquired for the purpose of manufacturing or processing.

Subsection 1104(9) of the Regulations provides that for the purposes of Class 29 in Schedule II "manufacturing or processing" does not include farming or fishing. Farming is defined in subsection 248(1) of the Act as:

“farming” includes tillage of the soil, livestock raising or exhibiting, maintaining of horses for racing, raising of poultry, fur farming, dairy farming, fruit growing and the keeping of bees, but does not include an office or employment under a person engaged in the business of farming.

It is the appellant's contention that the activity of farming for a tobacco farmer ends when the tobacco leaves are harvested and transported to the kilns, since a definite product exists at that time. The curing of leaves in a kiln represents a processing activity which is separate and distinct from any farming activity carried on by the farmer. Because the kilns were used for processing, the appellant satisfies the description of assets entitled to claim capital cost allowance pursuant to paragraph 20(1)(a) of the Act at the rate set out in Class 29 of Schedule II of the Regulations and is entitled to the deduction claimed.

Two witnesses testified on behalf of the appellant, Mr. Gabriel De Cloet, the President and one of the shareholders at the relevant time, and Mr. Earl Kenneth Walker, an agronomist.

The appellant has carried on business for a number of years. In 1973 it became a designer and manufacturer of specialized equipment for tobacco farmers and in 1978 expanded into the production of tobacco curing equipment as well as the design and manufacture of tobacco harvesting systems. In the taxation years in issue it was principally engaged in the manufacture and production of bulk kilns. A kiln consists of a portable structure which has a steel base. The main structure is of wood fabrication, insulated and sealed. On the one end it has loading doors. The other end contains a furnace and an air moving system specially designed to produce and control both temperatures and humidity as required during the curing process. The kiln is factory built and is transported to farm sites where it is set on, in most instances, a cement pad. Cement lined depressions from this pad form inlet air plenums which are covered by the perforated steel floor of the kiln. The floor pressurizes the inlet air with the result that air passing upwards is comparatively uniform in temperature, pressure and air speed. The harvested tobacco is loaded into the kiln in racks or bins and air is forced through the tobacco pack from the lower to the upper air plenum. Controls are incorporated in the furnace unit which not only set the temperature but also increase it at specific points of time. There are also controls for humidity, since the humidity level as well as the temperature are extremely critical during the curing process. According to Mr. De Cloet there has to be an extremely accurate relationship between temperature and humidity during the various stages of the drying process in order to achieve a marketable tobacco product.

In addition to his responsibilities with the appellant Mr. De Cloet has been involved in tobacco farming for many years. He assisted his father in the growing of tobacco, subsequently rented land and produced tobacco personally and more recently purchased a tobacco farm. This farm served as a testing ground for the appellant's development of equipment and drying processes until 1984. The experiments and tests were designed to produce a better and more efficient curing process. As Mr. De Cloet saw it no effort was made to “alter tobacco farming or to make any changes to the farming of tobacco, only to the curing process".

According to Mr. De Cloet there is a demonstrable difference between leaves which are cured in a controlled environment (such as provided by a bulk kiln) and leaves which "matured in the field but which through the carelessness of workers or other purposes [sic] didn't make it to the curing process". Only properly cured tobacco is marketable. Once cured the tobacco is sold to the cigarette manufacturers under the authority and through the facilities of the Ontario Flue-Cured Tobacco Grower's Marketing Board. Although, through the auspices of the Marketing Board the tobacco is classified, and each classification has a minimum grade price, its ultimate purchase is determined by way of an open auction. Such sales of cured tobacco are made by the farmer directly to the tobacco companies without the intervention of any middleman or wholesaler.

Mr. De Cloet testified that tobacco production in this country:

. . . begins by seeding the tobacco seeds into a greenhouse seedbed using sterilized soil. The plants are produced in the greenhouses until the time that they are ready for transplanting in the fields, which is late May, a time when there is no longer a danger of frost which will destroy the plants. The tobacco is then planted in the fields, cultivated. It's cared for, irrigated when it's dry. When the plant begins to mature it produces a flower. The flower is then removed to achieve greater leaf development and quicker maturity. The plant begins to ripen first at the bottom leaves, which are, as they become mature, they are harvested, and after they are harvested they are taken to the tobacco kilns for the process of curing. Having removed the bottom leaves, the mature leaves, the new bottom leaves, now lower leaves, begin to mature and they are harvested as well and taken to the curing process. And so on. There are about five or six stages of harvest until all the leaves are harvested. After they are harvested they are taken to the curing kilns for the curing process.

He emphasized that to him tobacco farming meant "growing the plant, bringing it to maturity" including "harvesting, but once the mature leaf is harvested you're finished as a farmer".

Mr. Earl Kenneth Walker is a well qualified agronomist who is recognized as an authority on flue-cured tobacco production. Until recently he was employed by Agriculture Canada as a research scientist. He spent some 35 years at the Delhi Research Station engaged exclusively in research relating to the tobacco industry.

Mr. Walker testified that in his view tobacco farming ended at the point of harvesting and that curing was a separate process. He explained that harvesting commences with the lower leaves beginning anywhere from the end of July to the middle of August and usually finishes about the middle of September. When harvested the leaves have anywhere from 75 to 85 per cent moisture. The leaves are prepared for entry into the kiln by being placed in bulk racks or laths. These bulks of leaves in racks are placed into a bulk kiln which commences the curing process. In the initial stage, the yellowing stage, which requires approximately 48 hours, the leaves are subjected to temperatures which maintain the living state and relative humidity. If relative humidity drops below 75 per cent or if the temperature rises above 110 degrees Fahrenheit the farmer risks creating irreversible damage to the leaves. The object of the initial stage is to keep the leaf living in circumstances where:

. . . we're subjecting it to slow death or respiration whereby it is losing moisture in the environment of the kiln. At the same time the starch in the tobacco plant is changing to sugars and the chlorophyll that you want to get rid of is gradually disappearing.

When the farmer, by his experience and judgment, determines that the yellow or orange colour is at the desired level in the greatest number of leaves, he fixes the colour. That means that further colour development is arrested by increasing the temperature. At this stage both temperature and humidity have to be controlled or problems can occur such as discoloration. In the final stages the temperature is advanced to approximately 165 degrees Fahrenheit at a very low humidity to complete the drying process. Mr. Walker summarized by saying that the harvested leaf is a biologically active material in the initial stage, that is in a living state, but in the latter stages the farmer is primarily drying the leaves at a controlled rate:

. . . so you have both types of processes going on throughout the cure which takes anywhere from six to eight to nine days depending on the stalk position of the leaf you are dealing with.

To obtain flue-cured tobacco it is necessary to have a kiln or a reasonable facsimile of one. The principal chemical changes which occur in the course of curing are the disappearance of chlorophyll; the unmasking of the pigments that show the yellow colour, and the change of approximately 40 per cent of the starch in the leaves to sugars through the respiration process. In the absence of kiln curing harvested leaves would undergo a different chemical change in that the sugars would become completely oxidized and the result would be an air-cured product which is not desirable for commercial use.

It was Mr. Walker's experience that curing is a specialized skill and he estimated that perhaps as few as 25 per cent of the Ontario tobacco farmers actually do the curing themselves without the assistance of a specialist. Such specialists "may be their father or neighbour who has got a lot of experience in curing” or it could be a curer brought in from Virginia or North Carolina as had been the practice in the past. When asked whether there was any difference between curing and "what else goes on in the tobacco industry from a farm viewpoint", Walker said:

A. Yes. Of course, we all know that curing takes place on the farm. Now, as far as being different from the rest of farming, certainly it is. We are dealing with crop production up to the point of curing, in my estimation. Now, there is a gray area there as far as the harvesting end of it. l’m just not prepared to say just what exactly that is, but as far as I’m concerned, there's a big difference between curing and crop production.

According to Walker curing, or processing as he sometimes referred to it in his testimony, means:

A. . . . (it is) something where you have not only a biological change in a product, but a lot of manipulation of the environment to achieve that result. It can be either that alone or combined with drying as it's curing. I guess there are many parts of agriculture that would have to be processing, but I would say there's a lot of things that might be described as processing that I would consider much less even than curing. Curing to me, is definitely processing.

and in his view this is what distinguished a "process" or "processing" from "farming".

The principal contention of the appellant is that the activity of tobacco farming stops at the end of the production phase i.e. at the completion of the harvest. At this point the farmer becomes involved in a totally separate and distinct activity, “processing”. Counsel for the appellant relies on the evidence of Mr. Walker and in particular on his opinion that the curing of tobacco is distinguishable from its production because the curing activity which takes place in the kiln, by artificial control of the environment, results in a chemical change to the tobacco leaves which would not occur if not so processed. In support counsel cited Crawford Foods Ltd. v. M.N.R., [1979] C.T.C. 2511; 79 D.T.C. 517; June A. Pollon and Clifford M. Pollon v. The Queen, [1984] C.T.C. 131; 84 D.T.C. 6139 and Federal Farms Ltd. v. M.N.R., [1966] C.T.C. 62; 66 D.T.C. 5068.

Counsel for the respondent submits that the curing stage or activity is not manufacturing or processing within the meaning of the relevant provisions of the Act. In the alternative counsel contends that if the activity of curing is "processing", then in any event, by virtue of subsection 1104(9) of the Regulations it is not to be included in the category "manufacturing or processing" for the purposes of Class 29 in Schedule II because it is part and parcel of the activity of farming.

To succeed in this appeal the appellant must establish first that the kiln is a property leased to and used by a farmer primarily in the processing of goods for sale, in this case tobacco, and second that this use was not "farming" within the meaning of subsection 1104(9).

In Federal Farms Limited, supra, Cattanach, J. was required to consider whether a company preparing and selling vegetables was a manufacturing and processing corporation and as a result was entitled to an incentive tax credit then available. The evidence showed that in addition to packaging carrots and potatoes the company's operations included such steps as washing, brushing, spraying, drying, sizing, culling and grading the vegetables. The Court held that these operations were a process or series of processes to prepare the product for the retail market. In so concluding Cattanach, J. turned to recognized dictionaries to determine the ordinary meaning of the words "process" and "processing". At page 67 (D.T.C. 5071) he said:

The word "process" is defined in the Shorter Oxford English Dictionary, Third Edition, as "To treat by a special process; e.g. to reproduce (a drawing, etc.) by a mechanical or photographic process."

In Webster's Third New International Dictionary published in 1964 the word "process" is defined as follows, "to subject to a particular method, system or technique of preparation, handling or other treatment designed to effect a particular result: put through a special process as (1) to prepare for market, manufacture or other commercial use by subjecting to some process (-ing cattle by slaughtering them) (-ed milk by pasteurizing it) (-ing grain by milling) (-ing cotton by spinning):"

In Webster's Second New International Dictionary published in 1959 the following definition of the word "process" appears, "To subject (especially raw material) to a process of manufacturing, development, preparation for market, etc.; to convert into marketable form as live stock by slaughtering, grain by milling, cotton by spinning, milk by pasteurizing, fruits and vegetables by sorting and repacking."

Other standard works consulted define "process" as "to treat, prepare, or handle by some special method."

In that case the Minister of National Revenue disallowed the claim relying principally on paragraph 40A(3)(a) (as it read in 1966) which provided that goods processed or manufactured shall be deemed not to include goods that have been “packaged only”. Cattanach, J. did not consider that the operations of the appellant constituted "packaging only" so as to preclude the appellant from qualifying as a manufacturing and processing corporation by reason of paragraph 40A(3)(a) of the Act.

I am satisfied that the curing of tobacco in a bulk kiln is a process. Indeed the respondent would be hard pressed to justify any other conclusion, although an argument of sorts was advanced at trial, because by his assessment the respondent categorized the property as "a building that is a kiln, . . . acquired for the purpose of manufacturing or processing". This finding, however, is not the end of the matter because for the purposes of Class 29 in Schedule II all activities which fall into the definition of “farming” are specifically excluded from "processing" by virtue of the provisions of subsection 1104(9) of the Regulations. In this context the Federal Farms Ltd. decision is of little assistance since the Court was not required to consider whether or not the processing referred to therein was an integral and inseparable part of a farming operation.

A reading of the definition of "farming" in subsection 248(1) makes it clear that a number of agricultural activities are included, many of which bear very little similarity to each other. It is equally clear that the enumeration of such activities was not intended to constitute an exhaustive definition and one must look to the common, ordinary and generally accepted meaning of the word “farming” as well as to the specific activities detailed in the statute. (Pollon et al. v. The Queen, supra).

I am not prepared to accept the distinction suggested by Mr. Walker that curing, being a process, cannot be farming. To do so would be to unnaturally restrict the definition of "farming" in the Act. As stated by Addy, J. in Pollon et al. v. The Queen, supra [page 134 C.T.C.]:

. . . one must look to the common, ordinary and generally accepted meaning of the word as well as to the specific activities detailed in the statute.

In Pollon, supra, the taxpayers each operated a business which was independent from the other. The wife purchased imported day-old baby chicks specially hatched for breeding purposes and then delivered the chicks to various breeding farms in Canada. The husband's hatchery operation involved the mechanical incubation and rotation of the eggs. His business also inspected each chick and was responsible for discarding unsuitable ones and it vaccinated the newborn chicks when required. Both taxpayers took the position that they were engaged in farming. The Court held that the activities carried on by the wife's business with the exception of the original purchase of the chicks, all pertained to the control of breeding and the biological development of chickens from the egg to the resulting chick. The hatching activity carried on by the husband’s business also constituted farming despite the fact that the operation was carried out mechanically rather than by brood hens. The hatching process was a necessary, integral and indispensable part of the development of the broiler.

In reaching this conclusion Addy J. rejected Fleming Farms v. M.N.R.,

[1977] C.T.C. 2471; 77 D.T.C. 351, stating that he could not share the Board's view that the provision by artificial or mechanical means of the required conditions to ensure the biological development of an egg into a chick constituted manufacturing.

Counsel for the appellant attempted to distinguish Pollon, supra on the basis that the egg-hatching process was one which took place in an entirely natural manner and was not artificial. He argued that the curing of tobacco was not a natural process but was the result of artificial and mechanical intervention. I do not agree. As Mr. Justice Addy stated in Pollon, supra, "It is solely the environment which is mechanically or artifically controlled."

Mr. Justice Addy also stated at page 137 (D.T.C. 6143) with respect to the definition of “farming”:

Since mechanically operated hatcheries are a very recent development, it is not at all surprising that the activity is not specifically included in the dictionary definitions of farming. More and more today because of numerous and rapidly developing scientific and technological methods and procedures in the field of food production, men and manually controlled implements are being replaced by machinery and scientifically developed technical processes. Where the development of the basic food product still involves the growing process and natural biological changes as opposed to artificially manufactured foods or mere processing, I do not feel that, generally speaking, the activity would be considered by the general public anything other than agricultural in nature and would, therefore, generally be considered as a farming operation.

These comments are in my opinion applicable to the appeal before me.

I am satisfied that the activities carried on by the appellant constituted one continuing integrated farming operation which commences with the initial growing of tobacco plants in a protected area in a greenhouse. Each stage demands its own techniques. The greenhouse provides a specialized growing facility for tobacco plants. Air temperature and humidity are controlled. In that environment a large number of tobacco plants are grown in a small area of organic soil, normally muck, that is steam sterilized. These plants are pulled as required and are planted in the fields where they are cultivated, irrigated and subjected to whatever other field practices are necessary. From that the tobacco farmer proceeds to topping and suckering prior to the crop being ready to harvest.

Counsel for the respondent asked Mr. Walker:

Q. All of these things, I think you will agree with me, cause chemical or biological changes in the plants, do they not? The whole process of growing is a process of chemical and biological change.

A. Except that your growth is a build-up process and what we are talking about in curing is a break-down process.

Q. Is it fair to say in a sense that starting from the greenhouse and then putting it into the field you are controlling the rate of growing, or you are providing optimal conditions for growing to achieve a certain result?

A. Hopefully.

Q. After the tobacco is cured or the part of the activity that is the curing of tobacco—that is controlling the rate of death of the tobacco plant to achieve an optimal result.

A. Correct.

The totality of Mr. Walker's evidence demonstrates that modern farming, whether it be the growing of grain or vegetables or tobacco can no longer be described as simply the “tilling of the soil”. Does hydroponic production of vegetables fall outside the definition of "farming" because the plants are not grown in soil and there is no “tilling of the soil”? I would doubt that is the case. Agricultural farming involves the whole aspect of commercial production of any crop or plant which has economic value, and in my view, encompasses all of the activities of a farmer. If, to best prepare his crop for market, he washes and packages his potatoes or carrots; picks, trims and package his mushrooms; dries his beans or peas or sprays ethylene gas on his tomatoes to control colour; those activities are an integral part of his farming activities and are properly so characterized.

Mr. Walker might describe many of these activities as processing—and by inference—not farming. I do not agree. Curing may well be a "process" but nonetheless it is an activity within the overall meaning of “farming” pursuant to subsection 1104(9) of the Regulations. The respondent's reassessment of the kilns as being in Class 8 of Schedule II is correct.

I turn now to the second issue. In determining its income in each of the four taxation years the appellant deducted the cost of premiums on certain policies of insurance taken out on the lives of its principal shareholders. The respondent disallowed the deductions on the basis that they were not a deduction such as is contemplated by subparagraph 20(1)(e)(ii) of the Act.

Mr. Gabriel De Cloet was the only witness called on behalf of the appellant. Briefly the facts are that during the taxation years 1980 to 1983 the appellant banked at The Royal Bank of Canada, Tillsonburg Branch, (the Bank) where it had obtained credit facilities which ranged at various times from three to five million dollars. To maintain this line of credit certain conditions had to be met.

Letters from the manager of the Bank to Mr. G. De Cloet dated June 29, 1983, and to the appellant dated June 21, 1983 set out the terms and conditions upon which the Bank was prepared to confirm the appellant's line of credit (Exhibit A-4). As part of the security given by the appellant in respect thereof three policies of insurance were to be assigned to the Bank.

Mr. De Cloet was not able to locate any other correspondence with respect to the appellant's credit arrangements. He said he recalled:

. . . a letter dealing specifically with this issue from the Bank about 1981 specifying that these will be part of the terms and conditions.

and also that:

After negotiating the loans, there was a confirmation from the Bank that these life insurance policies would have to be in effect and that they would have to be assigned to them.

Mr. De Cloet produced the three insurance policies in issue (Exhibits A-5, A-6 and A-7). The first policy issue on May 24,1981 insured the life of Gabriel De Cloet in the sum of $4,000,000. The second policy insured Daniel De Cloet in the sum of $4,000,000 while the third insured Benjamin De Cloet in the sum of $2,000,000. These policies, although dated June 17, 1981, were in force from May 1, 1981. In each case the appellant was the beneficiary of the policies and it paid the premiums thereon.

Mr. De Cloet was not able to provide any information with respect to the 1980 taxation year and in particular was not able to say whether the terms and conditions spelled out in the 1983 letters (Exhibit A-4) had been in place in that taxation year. He told the Court that unsuccessful efforts had been made to locate similar correspondence in the company files with respect to the other years. No attempt was made to contact the Bank to obtain copies of the documents.

Further confusion was occasioned by Mr. De Cloet when asked whether the appellant had any policies of insurance in place for 1980. He replied; "I believe 1981 are the first policies”.

Shortly thereafter he stated: "I could be mistaken. Obviously, 1981 is the first year of these policies before us.”

No other policies were produced. It was pointed out by counsel that the appellant’s 1980 return of income included a deduction in the amount of $18,065, being an expense incurred in relation to the insurance policies. A T7W-C form attached to the notice of reassessment for that year specifically disallows that expense. Counsel for the respondent conceded that the respondent probably acted on the same basis as in the subsequent years and not because a policy of insurance did not exist. It appears reasonable to conclude that the policies in question were in force in 1980.

With respect to the underlying purpose for the acquisition of these policies the only evidence elicited from Mr. De Cloet was this exchange with his counsel:

Q. Was that the insurance that was put on at the request of the bank?

A. These were the insurances that were put on at the bank's request.

and his testimony in cross-examination that he and his brothers also had a shareholders' agreement. When asked:

Q. . . . Was the purpose initially of these term insurance policies to provide funds to the company or to the remaining brothers or to the remaining brothers via the company by way of loan or whatever to buy out the estate of a deceased brother should that happen?

He responded:

A. The purpose of the policy is somewhat two-fold in this case here.

His Honour: is or was?

A. Was, yes. It was a requirement of the bank and it also entered into the shareholder's agreement.

It was the appellant's position that subparagraph 20(1)(e)(ii) of the Act provides a deduction for an expense incurred in the year in the course of borrowing money used by it for the purpose of earning income from business or property. Counsel relied on the case of Young-Eglinton Building Ltd. v. M.N.R., [1974] C.T.C. 209; 74 D.T.C. 6180 and in particular on the comments of Mr. Justice Thurlow with respect to the scope and applicability of pargraph 11(1)(cb), of the Act, (the predecessor of subparagraph 20(1)(e)(ii)), at page 214 (D.T.C. 6183):

It may not always be easy to decide whether an expense has so arisen but it seems to me that the words “in the course of” in section 11(1)(cb) are not a reference to the time when the expenses are incurred but are used in the sense of “in connection with” or “incidental to" or “arising from” and refer to the process of carrying out or the things which must be undertaken to carry out the issuing or selling or borrowing for or in connection with which the expenses are incurred.

Counsel submitted that this decision was used as authority for the deductibility of life insurance premiums in the case of Côté-Reco Inc. v. M.N.R., [1980] C.T.C. 2019; 80 D.T.C. 1012. In that case the taxpayer, being unable to provide its bank with the loan security it initially wanted, obtained insurance on the life of its principal shareholder as required by its bank. Counsel argued that since De Cloet Ltd.'s bank required it to obtain term insurance on the principal shareholders as security for financing, the policy premiums were deductible as a cost of borrowing.

The Côté-Reco decision relied upon by counsel for the appellant provides little assistance, since it is substantially distinguishable on its facts. In that case, at pages 2020-21 (D.T.C. 1013), the Court found:

. . . The financial institution required as the best security, in addition to Mr. Côté's personal endorsement, an interim debt certificate, namely a lien on all present and future property of the company, including accounts receivable.

As the interim debt certificate could not be obtained because of certain technical details (in fact, it was not obtained until the end of 1976), the banking institution then required a temporary life insurance policy of $1,000,000.00 on Mr. Côté's life. The banking institution was to be named the beneficiary up to the amount of the debt.

That is a vastly different situation than exists in the appeal before me.

The evidence fails to establish that the Bank required the appellant to obtain the policies of insurance on the lives of its principal shareholders as a condition of its granting the required credit facilities. Mr. De Cloet's evidence as to when the policies of insurance were first purchased and the purpose underlying their acquisition by the appellant is imprecise and too tenuous to be relied upon. It is equally consistent with the facts that the policies of insurance had been purchased in 1980 (or prior to that time) for another purpose. I am not convinced that the purchase by the appellant of the policies of insurance in issue led to the incurring of interest costs which arose from or were incidental to the borrowing of money required to finance the ongoing cash needs of the appellant.

I agree with counsel for the respondent that the assignment of an existing policy of insurance to a bank does not per se transform it from what it was, in this case in part a requirement of the shareholders’ agreement, into an expense incurred in the year in the course of borrowing money used by the appellant for the purpose of earning income.

The respondent's reassessment of the appellant's 1980, 1981, 1982 and 1983 taxation years was correct and the appeals are dismissed.

Appeals dismissed.