CATTANACH,
J.:—This
is
an
appeal
against
the
income
tax
assessment
of
Twenty
Spadina
Road
Limited,
hereinafter
called
the
Company,
for
the
taxation
year
1958
whereby
the
respondent
added
to
the
declared
taxable
income
of
the
Company
a
sum
of
$70,156.49
realized
as
profit
on
the
sale
of
real
estate
on
the
ground
that
the
said
sum
was
income
from
a
business
carried
on
by
the
Company
within
the
meaning
of
Sections
3,
4
and
139
(1)
(e)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148.
In
the
fall
of
1955
four
friends,
who
were
also
business
associates,
discussed
the
acquisition
of
property
municipally
described
as
20
Spadina
Road,
in
the
City
of
Toronto
and
the
erection
of
a
small
office
building
on
the
site
since
the
area
in
question
was
becoming
a
commercial
centre.
The
participants
each
had
some
specialized
knowledge
and
experience
in
the
real
estate
and
construction
fields
or
in
related
endeavours.
They
were
Samuel
Lyons,
an
insurance
agent,
Martin
Mendelow
and
James
Key
wan,
architects,
and
Harry
Silverman
who
had
real
estate
interests.
Mr.
Silverman
induced
Timothy
Silverton,
a
building
contractor,
to
join
the
group.
Each
member
of
the
group
was
to
have
a
20%
interest,
although
the
interest
of
Mr.
Silverman
was
subsequently
taken
in
the
names
of
two
of
his
sons-in-law,
Mr.
Shapiro
and
Mr.
Weinstein,
and
Mr.
Silverton’s
interest
was
taken
in
the
name
of
a
relative,
Mr.
Campbell.
However,
Mr.
Silverman
and
Mr.
Silverton
undertook
to
assume
personal
liability
in
any
additional
requisite
financing.
Each
member
of
the
group
put
up
$4,000
making
a
total
of
$20,000.
The
architects,
Mr.
Mendelow
and
Mr.
Keywan,
inspected
the
site,
checked
the
relevant
municipal
by-laws
and
decided
the
site
was
suitable
for
the
plans
of
the
group.
There
was
a
large
old
house
on
the
site
which
had
been
converted
from
residential
to
commercial
use
which
building
would
be
demolished
to
make
way
for
the
new
structure.
On
November
7,
1955
an
offer
to
purchase
was
made
to
Mrs.
Marion
Winkler,
the
owner
of
the
property,
for
$86,000
which
was
accepted
by
her.
The
offer
was
made
by
Mr.
Mendelow
on
behalf
of
a
company
to
be
formed.
Twenty
Spadina
Road
Limited,
was
incorporated
under
the
Ontario
Corporations
Act
by
letters
patent
dated
February
22,
1956
for
the
following
objects:
To
acquire
the
lands
municipally
known
as
20
Spadina
Road
in
the
said
City
of
Toronto,
and
to
construct
thereon
a
building
or
buildings
and
to
retain
the
same
for
investment
purposes.”
The
authorized
capital
was
$40,000
divided
into
3600
non-voting
redeemable
preference
shares
of
the
par
value
of
$10
each
and
4000
common
shares
of
the
par
value
of
$1
each
of
which
$20,000
in
treasury
shares
were
issued
to
Lyons,
Mendelow,
Keywan
and
Campbell
to
the
extent
of
$4,000
each
and
$2,000
each
to
Shapiro
and
Weinstein.
The
letters
patent
also
contained
a
clause
in
the
following
terms:
And
it
is
hereby
ordained
and
declared
that
if
the
Company
should
sell
its
title,
right
and
interest
in
fee
simple
to
the
whole
of
the
lands
and
premises
now
municipally
designated
as
20
Spadina
Road,
in
the
said
City
of
Toronto,
then
the
Company
shall
surrender
the
Letters
Patent
herein
granted
to
the
Lieutenant-Governor
or
shall
take
proceedings
to
change
its
name
to
some
dissimilar
name.’’
By
deed
dated
January
28,
1956
the
land
was
transferred
by
Mrs.
Winkler
to
the
Company
and
Mrs.
Winkler
received
$27,500
in
cash,
the
company
assumed
an
existing
mortgage
for
$8,000
and
Mrs.
Winkler
was
given
a
mortgage
to
secure
the
unpaid
balance
of
the
purchase
price
in
the
amount
of
$50,500
payable
on
September
30,
1957
with
interest
at
6%.
The
mortgage
also
contained
a
clause
giving
the
Company
the
right
to
demolish
and
make
excavations.
Plans
were
drawn
for
a
five
storey
office
building
with
a
total
floor
area
of
25,510
sq.
ft.
of
which
20,590
sq.
ft.
was
rentable
with
parking
space
for
20
automobiles.
The
estimated
cost
of
the
building
was
$400,000
inclusive
of
the
land,
or
an
approximate
cost
of
$20
per
sq.
ft.
of
rentable
space.
A
projected
statement
of
income
and
expenditures
indicated
a
gross
income
from
rentals
of
approximately
$84,760
less
conjectured
and
foreseeable
expenses
of
$53,770,
yielding
an
estimated
net
annual
income
of
$30,990.
At
this
point
the
financing
of
the
project
became
of
paramount
importance.
The
key
to
successful
fulfilment
of
the
project
was
an
adequate
first
mortgage.
Discussions
were
held
with
Murray
&
Company,
Limited,
mortgage
brokers,
and
verbal
assurance
was
received
that
a
minimum
mortgage
of
$250,000
was
available
from
the
North
American
Life
Assurance
Company
if
the
building
were
leased
to
the
extent
of
60%
of
satisfactory
tenants.
The
leasing
of
the
premises
to
the
above
extent
was
a
condition
precedent
to
a
formal
mortgage
commitment.
Meanwhile
interim
financing
was
required.
The
contributions
for
capital
stock
in
the
company
was
$20,000.
A
further
$20,000
was
loaned
to
the
company
by
its
shareholders
and
from
individual
sources.
Discussions
were
held
with
the
branch
manager
of
the
Company’s
bank
which
led
to
the
expectation
of
a
loan
of
$100,000
which
together
with
the
$40,000
in
the
Company’s
treasury
and
the
first
mortgage
of
$250,000
would
total
$390,000
an
amount
adequate
to
finance
the
completion
of
the
building
at
an
estimated
cost
of
$400,000
inclusive
of
the
outlay
for
the
land.
Real
estate
agents
were
engaged
for
the
rental
of
space
who
expressed
the
opinion
that
the
possibility
of
renting
to
reliable
tenants
would
be
greatly
enhanced
if
the
building
were
under
construction
and
accordingly
construction
was
begun
during
March,
1957.
Negotiations
were
entered
into
with
a
firm
of
chartered
accountants
to
lease
one
and
a
half
floors
on
the
basis
that
the
firm
members
would
become
shareholders
of
the
Company.
A
factor
considered
was
the
excellent
bank
credit
of
the
accounting
firm.
However,
the
arrangement
broke
down
over
a
penalty
clause
as
to
completion
of
the
building
by
a
specific
date
which
the
firm
of
chartered
accountants
insisted
upon
and
which
the
Company
considered
unacceptable.
By
letter
dated
April
5,
1957,
the
bank
advised
the
Company
that
the
application
for
a
loan
of
$100,000
had
been
declined
by
the
head
office
of
the
bank.
It
was
therein
explained
that
the
bank
required
a
virtually
self-liquidating
programme
and
stated
no
firm
mortgage
had
been
arranged
nor
was
one
immediately
in
sight.
The
bank’s
officers
foresaw
considerable
difficulty
in
the
Company
meeting
immediate
trade
payments
and
therefore
recommended
the
sale
of
the
building
forthwith.
As
witnessed
by
an
indenture
dated
April
3,
1957
and
recorded
in
the
Registry
Office
for
the
Registry
Division
of
Toronto
on
April
8,
1957,
a
sum
of
$100,000
was
borrowed
by
the
Company
from
Marion
F.
Hull,
secured
by
mortgage
and
guaranteed
by
Silverman,
Silverton,
Lyons,
Mendelow
and
Keywan,
the
principal
sum
being
due
and
payable
in
April
5,
1958
with
interest
at
18%.
On
May
24,
1957
an
offer
to
lease
the
fifth
floor
and
part
of
the
first
floor
at
a
rental
of
$4
per
sq.
ft.
was
signed
by
the
United
Steel
Workers
of
America.
Later
an
additional
offer
to
lease
covering
the
second
and
third
floors
also
at
$4
per
sq.
ft.
was
signed
by
K.C.S.
Data
Control
Limited
on
August
27,
1957.
By
virtue
of
these
two
offers
to
lease
60%
of
the
property
was
leased
to
satisfactory
tenants.
However,
construction
was
proceeding
and
bills
were
accumulating.
The
amount
of
$100,000
borrowed
from
Marion
F.
Hull
was
not
sufficient
to
meet
the
accumulating
bills
and
a
further
$100,000
was
required.
Rosenberg,
Smith,
Walsh
and
Kroll,
a
firm
of
solicitors
in
Toronto
were
approached
for
the
purpose
of
raising
a
further
$100,000.
The
solicitors
acted
on
behalf
of
two
incorporated
companies,
Naomal
Limited
and
Kopel
Investments
Limited.
Naomal
Limited
advanced
to
the
Company
the
sum
of
$100,000
secured
by
a
mortgage
dated
June
20,
1957,
for
a
term
ending
June
21,
1958
with
interest
at
12%
per
annum
and
with
Lyons,
Silverman,
Silverton,
Mendel-ow
and
Keywan
as
guarantors.
An
agreement
between
Kopel
Investments
Limited
and
the
Company
was
executed
on
June
17,
1957.
The
document
is
entitled,
‘‘
Agreement
of
Purchase
and
Sale’’.
Kopel
Investments
Limited,
called
the
‘‘purchaser’’,
agreed
to
purchase
the
property
known
as
20
Spadina
Road
for
$525,000
and
to
assume
a
first
mortgage
for
$325,000
with
interest
at
7%
amortized
over
20
years
in
equal
blended
monthly
instalments
of
principal
and
interest.
The
Company,
on
its
part,
undertook
that
the
building
would
be
fully
completed
and
that
before
completion
the
building
would
be
fully
rented.
It
was
also
provided
that
the
offer
was
conditional
upon
the
advancement
of
$100,000
to
the
Company
which
was
the
amount
secured
by
the
mortgage
to
Naomal
Limited
dated
June
20,
1957.
If
the
conditions
imposed
by
this
agreement
upon
the
Company
were
not
fulfilled,
provision
was
made
for
waiver
at
the
discretion
of
Kopel
Investments
Limited.
The
agreement
also
contained
a
provision
in
the
following
terms
:
“The
Parties
hereto
agree
that
the
Naomal
mortgage
will
provide
that
at
any
time
either
party
may
give
ninety
days’
notice
and
such
mortgage
will
become
due
at
the
end
of
the
ninety-day
period.
In
the
event
that
notice
is
given
by
the
Vendor
then
the
Purchaser
shall
have
until
the
expiration
of
the
ninety
day
notice
period
to
exercise
its
option
to
either
purchase
the
property
or
not
to
purchase
the
property.
In
the
event
that
such
notice
is
given
by
Naomal
Limited
then
the
Purchaser
shall
have
fifteen
days
from
the
date
that
the
balance
owing
to
Naomal
Limited
together
with
interest
is
paid
to
exercise
its
option
to
purchase
the
property
or
not
to
purchase
the
property;
provided
that
the
Vendor
be
entitled
to
repay
the
money
to
Naomal
Limited
at
any
time
after
notice
demanding
repayment
has
been
received
from
Naomal.”
On
September
4,
1957,
Mr.
Rosenberg,
solicitor
for
Kopel
Investments
Limited
wrote
a
letter
to
the
solicitors
for
the
Company,
requesting
a
draft
deed
in
favour
of
his
client
pointing
out
that
the
agreement
of
June
17,1957
called
for
the
assumption
of
a
first
mortgage
in
the
amount
of
$325,000
which
had
not
been
registered
as
of
that
date
and
that
the
building
had
not
been
completed.
Confirmation
was
requested
that
such
would
be
done
before
closing.
On
September
6,
1957
the
solicitors
for
the
Company
replied
to
the
letter
of
September
4,
1957
stating
that
a
draft
deed
had
not
been
forwarded
because
the
requirements
of
the
offer
to
purchase
dated
June
17,
1957
had
not
been
fully
met,
that
no
mortgage
commitment
had
been
obtained
but
negotiations
were
continuing
and
advice
as
to
the
outcome
was
expected
shortly.
On
September
24,
1957
the
solicitors
for
the
Company
wrote
a
letter
to
Naomal
Limited
giving
notice
that
the
Company
proposed
to
pay
off
the
mortgage
to
Naomal
Limited
on
or
before
December
23,
1957,
such
notice
being
the
ninety
days’
notice
provided
for
in
the
agreement
between
Kopel
Investments
Limited
and
the
Company
dated
June
17,
1957.
Simultaneously
another
letter
also
dated
September
24,
1957
was
written
by
the
solicitors
for
the
Company
to
Kopel
Investments
Limited
advising
that
notice
of
the
Company’s
intention
to
pay
off
the
mortgage
had
been
given
to
Naomal
Limited
and
referred
to
the
right
of
Kopel
Investments
Limited
to
purchase
or
not
to
purchase
the
property
within
such
period
of
ninety
days
under
the
agreement
between
the
parties
dated
June
17,
1957.
On
receipt
of
the
letter
dated
September
24,
1957,
Kopel
Investments
Limited
began
proceedings
in
the
Supreme
Court
of
Ontario
for
specific
performance
of
the
agreement
dated
June
17,
1957,
and
filed
a
lis
pendens
against
the
property
on
September
27,
1957.
Meanwhile
negotiations
for
a
first
mortgage
loan
were
being
continued
by
the
Company
and
verbal
assurance
was
given
that
a
loan
would
be
forthcoming.
A
written
application
for
mortgage
loan
in
the
amount
of
$275,000
was
made
to
North
American
Life
Assurance
Company
by
the
Company,
the
document
being
dated
October
15,
1957.
It
was
previously
understood
from
negotiations
on
behalf
of
the
Company
by
Murray
&
Company
Limited,
mortgage
brokers,
that
no
commitment
would
be
given
until
after
November
1,1957.
By
letter
dated
November
12,
1957
North
American
Life
Assurance
Company
advised
the
Company
that
a
mortgage
loan
of
$275,000
had
been
approved.
However,
the
completion
of
this
mortgage
required
the
elimination
of
encumbrances
registered
on
the
title
to
the
property
by
Naomal
Limited
and
Kopel
Investments
Limited,
including
the
certificate
of
lis
pendens
registered
by
the
latter.
As
a
result
of
negotiations
between
the
Company
and
Kopel
Investments
Limited
a
further
agreement
dated
December
10,
1957
was
entered
into
between
these
parties
whereby
the
Company
gave
Kopel
Investments
Limited
an
option
to
purchase
the
property
for
$500,000
which
option
was
exercised
immediately.
The
sale
was
closed
on
February
29,
1958,
as
a
consequence
of
which
the
Company
realized
the
sum
of
$70,156.49
in
excess
of
the
cost
of
acquiring
the
land
and
erecting
the
office
building
thereon.
The
Company
then
went
into
voluntary
liquidation
on
March
91,
1958
and
appointed
Samuel
Lyons
as
Liquidator
which
accounts
for
the
present
appeal
being
brought
in
the
name
of
the
Liquidator.
By
assessment
dated
March
18,
1957
the
respondent
added
to
the
declared
taxable
income
of
the
Company
the
aforesaid
sum
of
$70,156.49.
On
June
1,
1959
the
appellant
filed
a
notice
of
objection
to
this
assessment
and
on
January
28,
1960
the
respondent
notified
the
Company
that
he
confirmed
the
assessment.
It
is
from
this
assessment
that
an
appeal
has
been
brought
to
this
Court.
The
relevant
provisions
of
the
Income
Tax
Act
are:
Section
3.
‘
The
income
of
a
taxpayer
for
a
taxation
year
for
the
purposes
of
this
Part
is
his
income
for
the
year
from
all
sources
inside
or
outside
Canada
and,
without
restricting
the
generality
of
the
foregoing,
includes
income
for
the
year
from
all
(a)
businesses,
(b)
property,
and
(c)
offices
and
employments.”
Section
4.
‘Subject
to
the
other
provisions
of
this
Part,
income
for
a
taxation
year
from
a
business
or
property
is
the
profit
therefrom
for
the
year.”
Section
139.
(1)
‘‘In
this
Act,
(e)
‘business’
includes
a
profession,
calling,
trade,
manufacture
or
undertaking
of
any
kind
whatsoever
and
includes
an
adventure
or
concern
in
the
nature
of
trade
but
does
not
include
an
office
or
employment
;
’
’
The
issue
in
this
appeal
is
whether
the
profit
realized
from
the
sale
of
the
property
by
the
Company
to
Kopel
Investments
Limited
was
income
from
a
business
within
the
meaning
of
Sections
3,
4
and
139(1)
(e)
of
the
Act.
Counsel
for
the
appellant
referred
to
the
facts
and
urged
that
they
indicated
an
intention
on
the
part
of
the
Company,
its
shareholders
and
directors,
to
establish
a
long
term
investment
designed,
at
some
future
time,
to
provide
the
shareholders
with
a
substantial
dividend
income
from
rental
receipts
from
the
building.
He
pointed
out
that
none
of
the
promoters
of
the
Company
required
an
immediate
income
from
the
building
as
each
had
his
own
business
and
resources
and
all
were
content
that
any
profits
from
the
building
should
be
used
for
the
retirement
of
the
Company’s
financing
commitments.
He
further
argued
that
such
intention
was
borne
out
by
the
Company’s
course
of
conduct
throughout
and
that
its
ultimate
purpose
was
thwarted
by
the
difficulties
encountered
in
financing
and
the
action
begun
by
Kopel
Investments
Limited
for
specific
performance
of
the
agreement
dated
June
17,
1957.
It
was
strongly
urged
by
counsel
for
the
Minister
that
the
transactions
did
not
support
the
submission
that
a
long
term
investment
was
really
intended.
The
first
submission
was
that
the
Company’s
course
of
conduct
indicated
a
speculative
building
project
by
the
purchase
of
property,
the
erection
of
a
building
on
it,
securing
tenants
and
when
this
was
done,
the
sale
at
a
profit.
The
second
contention
was
that
there
was
present
throughout
an
alternative
intention
on
the
part
of
the
Company
to
realize
a
profit
on
the
resale
of
the
property
if
the
avowed
plan
of
retaining
it
as
an
investment
proved
incapable
of
fulfilment
because
of
difficulties
in
financing.
The
test
to
be
applied
in
determining
an
issue
such
as
this
is
stated
by
the
Lord
Justice
Clerk
in
the
well-known
case
of
Californian
Copper
Syndicate
(Limited
and
Reduced)
v.
Harris
(1904),
5
T.C.
159
at
page
165
as
follows:
‘It
is
quite
a
well
settled
principle
in
dealing
with
questions
of
assessment
of
Income
Tax,
that
where
the
owner
of
an
ordinary
investment
chooses
to
realise
it,
and
obtains
a
greater
price
for
it
than
he
originally
acquired
it
at,
the
enhanced
price
is
not
profit
in
the
sense
of
Schedule
D
of
the
Income
Tax
Act
of
1842
assessable
to
Income
Tax.
But
it
is
equally
well
established
that
enhanced
values
obtained
from
realisation
or
conversion
of
securities
may
be
so
assessable,
where
what
is
done
is
not
merely
a
realisation
or
change
of
investment,
but
an
act
done
in
what
is
truly
the
carrying
on,
or
carrying
out,
of
a
business.
The
simplest
case
is
that
of
a
person
or
association
of
persons
buying
and
selling
lands
or
securities
speculatively,
in
order
to
make
gain,
dealing
in
such
investments
as
a
business,
and
thereby
seeking
to
make
profits.
There
are
many
companies
which
in
their
very
inception
are
formed
for
such
a
purpose,
and
in
these
cases
it
is
not
doubtful
that,
where
they
make
a
gain
by
a
realisation,
the
gain
they
make
is
liable
to
be
assessed
for
Income
Tax.
What
is
the
line
which
separates
the
two
classes
of
cases
may
be
difficult
to
define,
and
each
case
must
be
considered
according
to
its
facts;
the
question
to
be
determined
being—Is
the
sum
of
gain
that
has
been
made
a
mere
enhancement
of
value
by
realising
a
security,
or
is
it
a
gain
made
in
an
operation
of
a
business
in
carrying
out
a
scheme
for
profit
making?”
The
question
on
which
side
of
the
line
an
item
of
profit
or
gain
falls
is
therefore
one
of
fact
to
be
answered
in
the
light
of
all
the
surrounding
circumstances.
The
facts
are
not
in
dispute.
The
only
question
is
the
deduction
which
should
be
drawn
from
them.
On
the
evidence
I
am
satisfied
that
the
plan
to
demolish
the
existing
building
and
to
erect
an
office
building
on
the
site
was
within
the
realm
of
possibility
despite
the
remarkably
small
amount
of
equity
capital
available
and
that
the
property
was
purchased
for
that
purpose
with
the
intent
to
realize
profits
through
letting
office
space
to
tenants.
I
do
not
regard
the
situation
as
one
in
which
it
should
be
inferred
that
group
purchased
the
land
and
the
Company
built
the
office
building
upon
it
as
a
speculation
looking
to
resale
or
that
it
was
intended
to
turn
the
property
to
account
by
any
method
whatsoever
as
might
be
expedient
although
as
events
turned
out
this
is
what
the
Company
found
it
necessary
to
do.
The
promotors
who
later
became
the
shareholders
and
directors
of
the
Company
had
indicated
their
willingness
to
wait
for
a
financial
return
and
that
the
rental
income
should
meanwhile
be
devoted
to
retiring
the
financing
commitments.
Throughout
the
existence
of
the
Company
its
interests
and
intentions
were
identical
with
those
of
the
promotors
of
the
project.
However,
the
expected
loan
from
the
bank
did
not
materialize
and
the
bank
advised
the
Company
to
dispose
of
the
building
forthwith.
The
Company,
disregarding
this
advice,
persisted
in
the
attempt
to
fulfil
the
project.
Other
short
term
loans
were
arranged
and
the
Company
entered
into
the
agreement
of
June
17,
1957
with
Kopel
Investments
Limited.
By
virtue
of
this
arrangement
the
Company
was
advanced
$100,000
by
Naomal
Limited
secured
by
mortgage.
The
agreement
dated
June
17,1957
between
the
Company
and
Kopel
Investments
Limited
was
an
agreement
of
purchase
and
sale.
Counsel
for
the
appellant
urged
that
the
proper
interpretation
of
this
agreement
was
not
what
it
appeared
to
be
on
its
face
but
that
it
was
merely
intended
to
provide
additional
security
to
Naomal
Limited
for
its
mortgage
loan
so
that
in
the
event
of
default
Naomal
Limited
would
have
recourse
to
the
agreement
rather
than
being
obliged
to
undertake
foreclosure
proceedings.
I
cannot
agree
with
such
submission
and
would
conclude
that
the
agreement
was
actually
what
it
purported
to
be,
that
is
an
agreement
for
purchase
and
sale
and
that
all
subsequent
actions
by
the
Company
were
consistent
with
the
performance
by
it
of
the
conditions
of
the
agreement.
The
commencement
of
an
action
for
specific
performance
and
the
registration
of
a
lis
pendens
by
Kopel
Investments
Limited
were
also
consistent
with
such
interpretation
regardless
of
the
interpretation
placed
upon
the
agreement
by
Mr.
Lyons
and
other
officers
of
the
Company
which
coincided
with
counsel’s
submission.
The
proceedings
begun
by
Kopel
Investments
Limited
for
specific
performance
of
the
agreement
dated
June
17,
1957
were
settled
by
the
subsequent
agreement
between
the
same
parties
dated
December
10,
1957
whereby
the
Company
gave
Kopel
Investments
Limited
an
option
to
purchase
the
property
for
$500,000
which
option
was
exercised
forthwith
and
the
sale
closed
on
February
29,
1958.
The
lesser
price
of
$500,000
in
the
subsequent
agreement
of
December
10,
1957
was
occasioned
by
the
Company
obtaining
a
first
mortgage
in
a
lesser
amount
than
contemplated
in
the
agreement
of
June
17,
1957.
Therefore
I
find
the
Company
agreed
to
sell
the
property
on
June
17,
1957
but
that
such
fact
does
not
vary
the
circumstance
that
what
the
Company
sought
to
create
was
a
capital
asset.
The
project
was
begun
with
a
minimum
equity
capital,
but
there
was
the
distinct
probability
that
it
would
be
brought
to
a
successful
conclusion
and
there
was
a
reasonable
expectation
that
financing
could
be
obtained.
However,
such
financing
became
increasingly
more
difficult
and
expensive
to
obtain
and
resulted
first
in
the
agreement
to
sell
the
property
to
Kopel
Investments
Limited
and
a
subsequent
renegotiation
of
the
agreement
for
sale
at
a
lesser
price
which
sale
to
Kopel
Investments
Limited
was
eventually
closed
on
February
29,
1958,
the
Company
being
unable
to
extricate
itself
otherwise
from
the
complexity
of
its
commitments.
The
cumulative
effect
of
the
foregoing
facts
leads
me
to
the
conclusion
that
the
Company
was
not
engaged
in
an
adventure
or
concern
in
the
nature
of
trade
and
that
the
profit
made
by
the
Company
on
the
sale
of
the
office
building
was
not
income
within
the
meaning
of
Sections
3,
4
and
139(1)
(e)
of
the
Act.
The
appeal
against
the
assessment
is
therefore
allowed
with
costs.
Judgment
accordingly.
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