Taylor,
T.C.J.:
—These
are
appeals
heard
in
Victoria,
British
Columbia,
on
September
22,
1987,
against
income
tax
assessments
for
the
years
1979
and
1980,
in
which
the
Minister
of
National
Revenue
assessed
amounts
of
$13,130.29
and
$43,717.76
as
“additional
business
income".
In
addition
to
these
amounts,
and
not
contested
by
the
appellant,
there
were
also
certain
amounts
of
interest
and
dividend
income,
as
well
as
rental
income
added
to
the
appellant's
reported
income
for
those
years.
The
following
paragraphs
from
the
reply
to
notice
of
appeal
set
out
the
basis
for
the
assessments
at
issue:
—
during
the
course
of
an
audit
of
the
financial
affairs
of
the
Appellant
and
his
wife,
their
records
were
found
to
be
inadequate
and,
as
a
consequence,
the
Respondent
prepared
a
net
worth
statement
for
the
Appellant
and
his
wife
to
establish
their
respective
incomes.
—
The
Respondent
relies,
inter
alia,
upon
Sections
3,
9(1),
12(1)(c),
12(1)(k),
90(1),
152(7),
Section
248
of
the
Income
Tax
Act,
R.S.C.
1970-71-72,
c.
63
as
amended.
Mr.
Zink
did
not
contest
the
general
validity
of
the
"net
worth"
statements
prepared
by
the
Minister.
He
did
however
offer
as
an
explanation
for
the
discrepancies
that
the
funds
so
represented
had
been
given
to
him
by
his
mother,
and
he
detailed
the
circumstances
surrounding
such
gifts.
It
was
established
that
Mr.
Zink's
wife
had
been
in
the
real
estate
business
during
the
times
material,
but
Mr.
Zink
stated
simply
that
he
had
not
been
in
business,
and
that
his
only
source
of
income
was
from
salary
and
wages
—
all
of
which
had
been
duly
reported.
The
total
interest,
dividend
and
rental
income
(noted
above)
also
reassessed
was
divided
in
approximately
a
50/50
ratio
between
Mr.
Zink
and
his
wife,
according
to
calculations
and
schedules
filed
with
the
Court.
However
any
additional
"discrepancies"
—
specifically
those
in
dispute
—
were
charged
against
Mr.
Zink
for
income
tax
purposes.
The
Minister
made
no
reasonable
attempt
at
the
hearing
—
even
on
direct
questioning
by
the
Court
—
to
establish
what
"business"
if
any
indeed
had
formed
the
source
of
Mr.
Zink’s
allegedly
unreported
income.
I
wish
to
point
out
that
the
testimony
and
evidence
presented
on
behalf
of
Mr.
Zink
was
considerably
less
than
convincing
in
itself.
Much
that
was
put
forward
contained
large
gaps
in
logic,
chronology,
and
substance.
However,
in
my
view,
that
is
not
the
issue
to
be
decided
by
the
Court,
in
this
matter.
Simply
put,
Mr.
Zink
has
been
assessed
for
“additional
business
income"
without
evidence
of
any
business
from
which
I
can
even
assume
such
income
could
have
arisen.
As
I
see
it,
that
changes
the
usual
onus
upon
Mr.
Zink
to
"overturn"
the
Minister’s
assessments
—
his
statement
under
oath,
that
he
had
no
source
of
business
income
during
the
years
in
issue,
should
suffice
to
favour
his
appeal,
unless
that
statement
is
appropriately
challenged
and
refuted
by
the
Minister.
That
was
not
done.
Mr.
Zink
has
at
least
presented
some
evidence
—
limited
though
it
was
in
support
of
his
contention
that
any
funds
which
did
not
come
from
his
salary
or
wages
did
come
from
his
mother,
while
the
Minister
has
presented
nothing
to
support
the
"business"
contention.
In
reviewing
the
calculations
and
schedules
presented
to
the
Court
by
the
Minister,
I
do
note
that
the
Minister
has
been
very
considerate
and
flexible
in
giving
Mr.
Zink
"credit"
(if
that
is
the
proper
word)
for
various
amounts
for
which
some
explanation
or
information
was
supplied
by
Mr.
Zink.
But
that
generosity
does
not
entitle
the
Minister
to
characterize
the
remaining
unexplained
and
unidentified
balance
—
at
issue
in
this
appeal
—
as
"business
income”.
The
appeals
are
allowed
and
the
entire
matter
is
referred
back
to
the
Minister
for
reconsideration
and
reassessment.
The
appellant
is
entitled
to
party
and
party
costs.
Appeals
allowed.
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