Evald Viitkar v. Minister of National Revenue, [1976] CTC 2089, 76 DTC 1073

The Chairman:—This is the appeal of Evald Viitkar from an income tax assessment in respect of the 1973 taxation year.

The issue in this appeal arises from the deductions in his 1973 income tax return of an amount of $1,888.26 claimed by the appellant as a travelling allowance in connection with his employment, which was disallowed by the Minister in his reassessment dated August 6, 1974.

The appellant whose residence is located in Pefferlaw, Ontario was employed as a carpenter by Almel Construction Company whose head office was at 102 Hill Crescent, Scarborough, Ontario. The company executed building contracts in various parts of the Province of Ontario and the appellant travelled to the company’s various construction sites. According to the terms of his employment, the appellant had to furnish his own tools and was required to pay all travelling expenses without receiving an allowance or reimbursement from his employer.

From May 14 to November 22, 1973 the appellant in travelling by car to and from his residence to various construction sites each day, five cays a week, claims to have covered a distance of 4,190 miles.

In his income tax return the appellant deducted as other allowable expenses an amount of $1,888.26 detailed as follows:

The amount of travel claimed to have been made by the appellant is not really in issue and was not contested by counsel for the respondent. What counsel contended was that the Income Tax Act in the circumstances of this appeal does not permit the deduction of any of the expenditures claimed by the appellant.

Counsel first pointed out that subsection 8(2) of the Income Tax Act imposed a general limitation whereby a taxpayer cannot make any deductions from his income arising from an office or employment, unless it is specifically mentioned in the Act.

Counsel then referred to paragraph 8(1)(h) of the Income Tax Act which reads as follows:

Travelling expenses—where the taxpayer, in the year,

(i) was ordinarily required to carry on the duties of his employment

away from his employer’s place of business or in different places,

(ii) under the contract of employment was required to pay the travelling expenses incurred by him in the performance of the duties of his office or employment, and

(iii) was not in receipt of an allowance for travelling expenses that was, by virtue of subparagraph 6(1)(b)(v), (vi) or (vii), not Included In computing his income and did not claim any deduction for the year under paragraph (e), (f) or (g),

amounts expended by him in the year for travelling in the course of his employment;

In this instance the employer’s place of business was at its various construction sites and it is at these sites that the appellant had to report to work each day.

It has been consistently held that, although the construction sites of a company where a taxpayer is to report ordinarily is not at the location of its head office, it is nevertheless the employer’s place of business. Consequently, the deductions referred to in subparagraph 8(1)(h){i) are not applicable to the appellant because it did not carry on the duties of his employment away from the employer’s place of business.

Furthermore, the evidence is that the appellant was not required under his employment contract to pay for his travelling expenses and he was not in receipt of travelling allowances from his employer. Again the appellant does not come within the requirements of subparagraphs 8(1)(h)(i), (ii) and (iii) of the Act and the car expenses in the amount of $740.46 claimed by the appellant are not deductible.

Dealing now with the appellant’s expenditure of $1,147.50 claimed by the appellant as deductible meal expenses which is covered by subsection 8(4) of the Income Tax Act, I quote subsection 8(4) which reads as follows:

Meals. An amount expended in respect of a meal consumed by an officer or employee shall not be included in computing the amount of a deduction under paragraph (1)(f) or (h) unless the meal was consumed during a period while he was required by his duties to be away, for a period of not less than twelve hours, from the municipality where the employer’s establishment to which he ordinarily reported for work was located and away from the metropolitan area, If there is one, where it was located.

It has already been determined that the employer’s establishment to which the appellant ordinarily reported for work was at the con- struction sites and there is no evidence that the appellant's duties required him to be away from the construction sites at any time for a period of over 12 hours. Subsection 8(4) also does not apply to the facts of this appeal and the deduction of expenses for meals cannot be allowed.

The Board holds therefore that the car expenses and the expenses for meals claimed by the appellant in the 1973 taxation year constitute personal living expenses because they do not meet the requirements of the pertinent subsections of section 8 of the Income Tax Act and are not deductible.

The appeal is therefore dismissed.

Appeal dismissed.