The
Chairman:—This
income
tax
appeal
was
disposed
of
at
the
finish
of
its
hearing,
at
Toronto,
and
it
only
remains
necessary
to
record
the
reasons
for
the
decision
then
reached
by
me.
A
reassessment
relating
to
1966
was
involved
whereby
the
sum
of
$19,067.82
was
added
to
the
appellant’s
declared
income
for
that
year
by
the
respondent.
The
material
facts
make
up
what
has
by
now
become
a
familiar
story.
Appellant
and
one
Frederick
A
Litwin,
who
also
entered
an
appeal,
made
an
agreement
with
a
prospector,
Robert
Rosenblat,
in
April,
1966,
to
look
for
mineral
deposits
in
or
near
Hants
County,
Nova
Scotia,
and
then
to
stake
not
more
than
75
claims.
At
the
same
time,
$500.00
was
advanced
to
Rosenblat
and
it
was
agreed
that
he
should
be
reimbursed
for
any
cost
incurred
“plus
$15.00
per
claim
upon
delivery
of
title
documents”.
Rosenblat
duly
proceeded
to
the
area
mentioned
and
went
over
it
on
foot
in
order
to
examine
its
potentialities
and
diligently
probed
beneath
the
surface
here
and
there.
While
in
the
locality,
too,
he
perused
relevant
maps
and
reports
at
the
appropriate
government
office,
These
documents
served
to
supplement
an
old
map
that
he
already
had.
The
said
activities
resulted
in
the
obtaining
by
Rosenblat
of
six
licenses,
which
he
duly
had
recorded,
and
the
making
of
a
report
as
to
his
findings
to
the
appellant
and
Litwin.
Four
of
the
licenses
were
transferred
to
the
appellant
and
Litwin.
On
or
about
June
9,
1966,
Rosenblat
received
the
further
sum
of
$800.00,
in
all,
from
the
appellant
and
Litwin.
Early
in
June,
1966,
the
appellant
and
Litwin
made
an
agreement
with
Field
Explorations
Limited
whereby
the
former
was
to
receive
375,000
shares
of
the
stock
of
the
said
company,
of
which
337,500
shares
were
placed
in
escrow.
Later,
the
appellant
disposed
of
37,500
of
these
shares
and
thereby
realized
a
net
profit
of
$19,067.82,
the
sum
that
has
given
rise
to
this
appeal.
While
the
Income
Tax
Act
purports
to
define
“prospector”,
it
says
little
about
what
is
meant
by
“prospecting”.
I!
am
of
the
opinion,
having
regard
to
the
evidence
adduced,
that
Rosenblat
who
obviously
was
well
qualified
as
a
prospector,
did
what
properly
may
be
termed
prospecting
in
his
activities
in
Nova
Scotia.
I
see
no
reason
to
doubt
that
what
he
did
constituted
a
compliance
with
the
pertinent
requirements
of
section
83
and,
as
was
stated
at
the
conclusion
of
the
argument
by
counsel,
the
appeal
should
succeed.
Reference
may
be
had
to
Foster
v
MNR,
[1971]
CTC
335.
The
result
is
that
the
appeal
should
be
allowed
and
the
relevant
reassessment
vacated
accordingly.
Appeal
allowed.
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