RITCHIE,
D.J.:—This
appeal
is
from
a
re-assessment
of
income
tax
made
on
August
26,
1958
in
respect
of
the
taxation
years
1954,
1955
and
1956.
The
appellant
has
carried
on
business
as
a
furrier
in
Toronto
in
partnership
with
another
for
more
than
twenty
years.
He
also
has
made
a
practice
of
dealing
in
real
estate.
The
re-assessment
is
in
respect
of
two
real
estate
transactions
which
the
appellant
contends
are
of
a
class
other
than
his
usual
dealings
in
real
estate.
From
1951
to
1956
inclusive
the
appellant
bought
and
resold
at
a
profit
a
number
of
old
houses.
A
quick
turnover
was
the
method
of
operation
he
endeavoured
to
follow.
In
some
cases
the
re-sales
were
negotiated
even
before
title
had
vested
in
him.
The
profits
from
these
re-sale
transactions
were
shown
as
income
on
the
appellant’s
returns
and
tax
paid
thereon.
On
July
27,
1953,
Doctorow
entered
into
an
agreement
to
purchase
from
Winston
Park
Development
Limited
for
the
price
of
$42,500
eight
lots
numbered
147
to
154
inclusive
and
having
a
total
frontage
of
500
feet
on
the
north
side
of
Lawrence
Avenue
West
in
North
York
Township.
About
18
months
later,
lot
#154
was
conveyed,
for
a
consideration
of
$7,500,
to
Pimlico
Invest-
ments
Limited,
a
company
in
the
capital
stock
of
which
the
appellant
owned
shares.
Pimlico
Investments
erected
an
eleven
suite
apartment
building
on
this
lot.
Title
to
the
remaining
seven
lots
was
taken
in
the
name
of
the
appellant’s
wife,
as
his
nominee.
It
was
the
appellant’s
intention
to
erect
seven
apartment
buildings
thereon
at
a
cost
of
approximately
$75,000
each.
He
hoped
to
obtain
mortgage
loans
of
$65,000
on
each
building.
Because
of
an
incinerator
located
on
the
south
side
of
Lawrence
Avenue,
opposite
the
seven
lots,
all
efforts
of
the
appellant
to
obtain
mortgage
loans
proved
unsuccessful.
Applications
to
the
Council
of
the
Corporation
of
the
Township
of
North
York
for
removal
of
the
incinerator
were
rejected.
When
final
payment
of
the
purchase
price
of
the
seven
lots
fell
due
the
appellant
was
compelled
to
negotiate
a
mortgage
loan
for
one
year
at
an
interest
rate
of
6
per
cent
and
pay
5
per
cent
bonus.
In
October
1955,
just
prior
to
the
maturity
of
the
mortgage
loan,
he
sold
the
seven
lots
at
a
profit
of
$13,911.53.
The
Minister
included
that
amount
in
the
appellant’s
1955
income
and
assessed
tax
thereon.
The
appellant
maintains
this
profit
is
a
capital
gain.
In
November
1952
the
appellant
purchased
a
new
six
room
bungalow
on
Wickford
Avenue
for
the
price
of
$11,450.
At
the
time
of
the
purchase
the
property
was
subject
to
a
mortgage
of
approximately
$9,000
payable
in
monthly
instalments
of
$75,
including
interest
and
taxes.
It
was
leased
at
a
rental
of
$125
per
month.
After
one
year
the
rental
was
reduced
to
$110
per
month.
In
1956
the
tenant
was
demanding
construction
of
a
garage.
The
appellant
was
unwilling
to
accede
to
that
demand
and
decided
to
sell.
In
April
1956
the
bungalow
property
was
sold
for
$14,500.
The
actual
profit
realized
on
the
sale
was
$3,025.10.
The
appellant
contends
the
Wickford
Avenue
property
was
purchased
as
an
investment
and
that
the
profit
on
re-sale
is
a
capital
gain.
The
appellant
undoubtedly
was
engaged
in
the
business
of
buying
and
selling
lands
in
order
to
gain
profits.
I
am
unable
to
separate
his
dealings
in
respect
of
the
two
transactions
in
question
from
his
buying
and
selling
the
old
houses.
He
merely
entered
new
fields
of
the
real
estate
business.
While
the
primary
intention
may
have
been
to
obtain
an
income
return
on
the
capital
invested,
that
intention
was
abandoned
and
a
profit
realized
on
re-sale.
Such
profit
falls
within
Section
3
of
the
Income
Tax
Act
as
income
from
a
business.
The
appeal
will
be
dismissed,
with
costs.
Judgment
accordingly.
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