Clibetre Exploration Ltd. v. R., [1999] 2 CTC 2869 (Informal Procedure)

Beaubier T.C.J.:

This appeal pursuant to the Informal Procedure was heard at Victoria, British Columbia on February 16, 1999. Mr. Rennie, president of the Appellant, was the only witness. Paragraphs 4 to 7, inclusive, in the Reply to the Notice of Appeal are true. They read:

4. In computing income for the 1996 taxation year, the Appellant claimed noncapital losses from prior years in the amount of $45,309.44.

5. In assessing the Appellant for the 1996 taxation year by Notice dated December 16, 1996, the Minister of National Revenue (the “Minister”) allowed noncapital losses of $14,077.35.

6. By Letter dated January 17, 1997 the Appellant requested that cumulative Canadian exploration expenses (the CCEE) be applied against income in the 1996 taxation year.

7. In so reassessing the Appellant, the Minister made the following assumptions of fact:

a) the Appellant disposed shares of Better Resources Limited received as part payment for mineral property;

b) the Appellant was allowed Canadian exploration expenses as current expenses throughout the years 1980 to 1995;

c) The Appellant’s CCEE at the end of the 1995 taxation year was nil:

d) the Appellant’s non-capital loss at the end of the 1995 taxation year was $14,077.35:

In essence, the Appellant sold shares of Better Resources Limited (1996) for $30,000 income. It then attempted to deduct that income from its losses claimed over the years since 1980. However, it was only allowed to deduct losses for the previous seven years. It then tried to reclaim the post- 1980 losses as cumulative Canadian exploration expenses so as to claim all of the losses against the $30,000. That was refused. It appealed.

Unfortunately for the Appellant, the law in this matter is clearly set forth by the Federal Court of Appeal in Canadian Marconi Co. v. Canada, [1991] 2 C.T.C. 352 (Fed. C.A.). Where the Appellant’s returns were accepted as filed, as here, the Minister has no power to reassess beyond the normal period. In essence the Appellant chose its course of action, which was accepted for good or bad and neither party can now change it.

The appeal is dismissed.

Signed at Ottawa, Canada this 22 day of April 1999.

Appeal dismissed.