Goetz,
TCJ
[ORALLY]:—This
is
an
appeal
by
the
appellant
with
respect
to
his
1978
taxation
year
whereby
the
result
of
an
assessment
or
reassessment
by
the
Crown
ended
in
a
nil
assessment
against
the
appellant.
The
appellant
purchased
what
is
known
as
534-40
Besserer
Street
in
Ottawa
in
June
of
1975
which
he
subsequently
sold
in
1978
for
a
price
of
$117,828.80.
The
adjusted
cost
base
was
determined
by
the
Crown
as
being
$91,511.81,
after
taking
into
consideration
certain
expenses
incurred
by
the
appellant
for
the
purpose
of
sale,
such
figure
being
$6,255.
The
Crown
alleges
that
there
is
a
capital
gain
amounting
to
$20,116.44,
half
of
which
would
be
taxable
as
income
to
the
appellant.
The
appellant,
in
filing
his
1978
tax
return,
took
the
position
that
because
of
the
difference
in
the
purchasing
value
of
the
dollar
from
the
date
of
acquisition
of
the
property
in
question
to
the
date
of
sale,
it
had
changed
to
such
a
degree
that
the
Minister
of
National
Revenue
should
have
taken
into
account
the
inflationary
factor
and
really
not
treated
the
proceeds
of
the
sale
as
a
gain
but,
rather,
as
a
loss
from
his
original
purchase
price.
Unfortunately,
as
counsel
for
the
Crown
has
pointed
out
and
as
I
am
aware,
there
is
nothing
in
the
Income
Tax
Act
whereby
the
inflationary
factor
is
consid
ered
in
reaching
the
determinative
figure
of
the
capital
gain
as
it
relates
to
the
adjusted
cost
base
in
1975
when
he
purchased
the
property.
I
can
see
the
logic
of
the
appellant’s
argument.
He
is
an
economist
and
is
aware
of
the
decline
in
the
purchasing
power
of
the
Canadian
dollar,
as
we
know
it
today,
but
the
Canadian
dollar
happens
to
be
the
only
legal
tender
or
measure
of
value
that
we
have
in
Canada.
We
are
not
on
the
barter
system.
We
are
on
the
monetary
system
and
the
dollar
is
the
monetary
unit
as
set
forth
in
the
Bills
of
Exchange
Act
which
is
a
federal
statute.
Regardless
of
how
logical
the
appellant’s
argument
might
appear
on
the
face
of
it,
as
Ms
Moon
pointed
out,
there
is
a
very
paucity
of
jurisprudence
on
this
point.
The
only
case
that
she
has
been
able
to
give
me
is
the
Secretan
v
Hart
case,
Tax
Cases
Vol
45,
at
701.
That
case
is
right
on
point
where
it
was
held
that
the
effects
of
inflation
cannot
be
taken
into
account
in
determining
the
amount
of
a
capital
gain
relating
to
the
sale
of
shares.
Counsel
for
the
respondent
further
pointed
out
Buckley,
J
at
706
of
the
Secretan
v
Hart
decision:
If
the
intention
had
been
that
the
effects
of
inflation
were
to
be
taken
into
account
in
determining
whether
or
not
a
capital
gain
had
been
made,
and
the
amount
of
such
a
gain,
there
would
clearly
have
been
in
the
Act
some
explicit
statement
to
that
effect
and
some
machinery
provided
for
ascertaining
the
effect
of
inflation
upon
the
relevant
considerations.
There
is
nothing
anywhere
in
the
Act
of
that
kind.
The
same
situation
obtains
here
in
Canada.
There
is
nothing
in
the
Income
Tax
Act
relating
to
capital
gain
or
anything
else
whereby
inflationary
factors
are
taken
into
consideration
when
the
Minister
makes
an
assessment
under
this
statute.
Though
this
may
seem
wrong
to
the
appellant,
I
might
point
out
to
him
the
decisions
of
the
Supreme
Court
of
Canada
that
have
held
that
this
being
a
fiscal
statute,
it
must
be
strictly
construed
and
there
is
nothing
in
this
statute
that
I
am
aware
of
—
and
as
counsel
for
the
Crown
pointed
out
—
that
in
any
way
deals
with
the
inflationary
factor.
I
find
that
the
assessment
was
correct
according
to
the
Income
Tax
Act
and
being
a
nil
assessment
leaves
the
appellant
with
nothing
to
appeal
against.
Consequently,
I
would
have
no
jurisdiction
ordinarily
to
deal
with
the
matter
but
in
finding,
as
I
have,
that
the
inflationary
factor
cannot
be
taken
into
consideration
by
the
respondent
when
reaching
an
assessment
of
a
so-called
capital
gain,
it
is
not
incumbent
upon
me
to
make
a
ruling
that
I
have
no
jurisdiction,
although
having
found
as
I
have,
it
would
in
all
effect
amount
to
the
same
thing.
I
must,
therefore,
dismiss
the
appeal.
Appeal
dismissed.
Email this Content