Zoltan Oly Raz v. Minister of National Revenue, [1974] CTC 2186

The Chairman:—This is an appeal by Zoltan Oly Raz against reassessments of the Minister of National Revenue for the 1968 and 1969 taxation years. The point in issue is whether or not the appellant should be entitled to claim capital cost allowance on two automobiles during the taxation years under appeal, or whether he should be entitled to only one automobile used for business purposes.

The evidence of the appellant is that in the years in question he was first a mutual funds salesman and then in the year 1969 a broker in the same business. He travelled in the Eastern Ontario area, throughout the Ottawa Valley and in the City of Ottawa, where he resides.

The appellant said that he spent about two days a week working in Ottawa, although in cross-examination he said that when he was not on the road he was at all times working in Ottawa. Since he was just establishing himself in the business world he said he was more anxious to concentrate on his work than to go on vacation or take time off. His evidence also is that his office was about four and a half to five miles from his home.

In one of the two years he said he had access to a summer cottage, which according to his evidence he said he visited only occasionally, less than once a week. The cottage was located about sixty miles from the City of Ottawa. When in Ottawa he visited his office at least once a day just to pick up any telephone messages that might be waiting for him and to do whatever was necessary at his place of business.

In the year 1968 and prior thereto his wife was the owner of a motor vehicle. He said his son, who became of driving age and qualified to drive during the years in question, was restricted to the use of his mother’s motor vehicle. The evidence does not indicate whether this was a family restriction or one imposed by the insurers of the vehicle.

The appellant said that he used his motor vehicle for personal use as well as business, and he feels that the 20 per cent assigned to him by the Department in their reassessment as personal use is fair and reasonable. His sole objection is to the fact that in 1968 he purchased a used Oldsmobile in addition to his existing Austin Princess, and has not been allowed capital cost allowance on both vehicles.

His evidence is that prior to 1968 he had had one engine job on the Princess, and then in 1968 he had two more engine jobs. It was the difficulty he was having with the Princess automobile that made it necessary for him to purchase the Oldsmobile. The fact that in May of 1969 the Princess ceased to be operable indicates that he believed that the Princess was drawing to the end of its usefulness to him.

The appellant said in evidence that in 1968 and up until May of 1969 he used both cars alternately, the Princess being something of a conversation piece which he used as an entrée to some customers of his who were interested in this type of automobile. The Oldsmobile, being a heavier car, was generally used for distance travel rather than city driving, the gas consumption of the Oldsmobile being somewhat greater than that of the Princess.

The evidence is clear that he acquired the Oldsmobile in 1968 to replace the Princess. From then on there is no evidence whatsoever that the Princess was ever used as a result of the failure of the Oldsmobile to be available to him for any purpose. It then became a matter of choice to him which motor vehicle he used.

In my view, this situation does not entitle a sole taxpayer operating a business to use more than one motor vehicle in the earning of income. In my judgment, the appellant is entitled to depreciation in the manner computed by the Minister; that is, by adding the Oldsmobile to the class in 1968 and deleting the Princess from that time on as not being used for business purposes.

I also find that the Minister’s apportionment of 80 per cent business use and 20 per cent personal use is more than generous; and on the whole I cannot find that the. assessment of the Minister is wrong either in fact or in law. On the evidence of the appellant alone I am satisfied that the Minister was correct in assessing the Appellant as he did. The appeal must therefore be dismissed.

Appeal dismissed.