THURLOW,
J.:—This
is
an
appeal
from
a
judgment
of
the
Tax
Appeal
Board
(33
Tax
A.B.C.
114)
which
allowed
an
appeal
by
the
respondent
from
a
re-assessment
of
income
tax
for
the
year
1958.
In
its
income
tax
return
for
its
fiscal
period
which
ended
on
May
31st
of
that
year
the
appellant
showed
an
operating
loss
for
the
year
of
$218.26.
In
making
the
re-assessment
the
Minister
added
to
the
revenue
declared
in
the
return
an
amount
of
$25,650
in
respect
of
what
was
referred
to
as
‘‘additional
consideration
on
sale
to
Ridge
Realty
Limited
not
recorded’’
and
assessed
tax
accordingly.
Later
by
his
notification
pursuant
to
Section
58
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148,
following
notice
of
objection
by
the
respondent
the
Minister
agreed
to
amend
the
assessment
to
allow
an
amount
of
$19,775
as
a
deduction
from
income
under
Section
85B
(1)
(d)
but
otherwise
confirmed
the
re-assessment
as
made.
The
respondent
thereupon
appealed
to
the
Tax
Appeal
Board
which
held
that
the
respondent
was
not
liable
for
tax
in
respect
of
the
$25,650
and
allowed
the
appeal
and
referred
the
matter
back
to
the
Minister
for
reconsideration
and
re-assessment.
On
the
present
appeal
the
first
issue
to
be
determined
is
whether
the
Minister
was
correct
in
adding
the
$25,650
in
computing
the
respondent’s
income.
If
not
his
appeal
must
fail.
But
a
further
issue
has
also
been
raised
by
the
respondent
and
will
require
determination
if
the
Minister
was
right
in
adding
the
$25,650.
This
issue
is
whether
an
amount
of
$125,000
which
was
included
by
the
respondent
in
computing
its
income
was
properly
brought
into
the
computation
at
its
full
amount
rather
than
at
$73,399.71
which
the
respondent
now
asserts
was
its
value
in
the
1958
taxation
year.
Since
the
net
amount
to
be
added
in
the
computation
of
the
respondent’s
income
following
the
Minister’s
undertaking
is
but
$5,875
the
appeal
must
also
fail
if
the
respondent
is
right
to
that
extent
on
this
issue.
The
facts
are
somewhat
confusing
but
for
the
most
part
they
are
not
in
dispute.
By
an
agreement
dated
April
30,
1956
Islington
Park
Limited
agreed
to
sell
‘‘Juliana
Allonsius
(as
trustee
for
a
company
to
be
incorporated)
”
a
parcel
of
land
in
Etobicoke
Township
consisting
of
70.377
acres
for
$703,770
payable
in
stated
payments
extending
over
a
period
ending
on
August
20,
1961.
Thereafter
on
May
29,
1956
Juliana
Allonsius
caused
the
respondent
to
be
incorporated
and
this
company
is
admittedly
the
‘company
to
be
incorporated’’
referred
to
in
the
Islington
Park
agreement.
Its
business,
as
described
by
one
of
the
witnesses
was
the
development
of
the
Belmont
Heights
subdivision
which
seems
to
have
consisted
of
the
property
comprised
in
the
agreement.
By
an
indenture
dated
September
20,
1956,
in
which
it
is
recited
that
the
respondent
is
the
company
referred
to
as
the
‘‘company
to
be
incorporated”
in
the
agreement
between
Islington
Park
Limited
and
‘‘Juliana
Allonsius
(Trustee
for
a
company
to
be
incorporated)”,
the
latter,
as
assignor,
‘‘in
consideration
of
the
premises’’
and
of
$5.00
assigned
to
the
respondent
all
her
interest
in
the
lands
described
in
the
agreement
to
hold
the
same
subject
to
the
terms
of
the
agreement
and
the
covenants
and
conditions
therein.
The
respondent
covenanted
to
assume
and
pay
all
moneys
due
and
to
become
due
under
the
agreement
and
to
save
the
assignor
harmless
and
indemnify
her
against
the
payment
thereof
and
on
her
part
the
assignor
covenanted
that
she
had
performed
all
the
covenants,
provisos
and
conditions
contained
in
the
agreement
and
that
she
had
done
no
act
to
encumber
the
lands.
By
the
time
this
indenture
was
executed
Mrs.
Allonsius
had
made
payments
totalling
$75,000
on
account
of
the
purchase
price
of
the
property,
and
two
other
persons,
Harry
Evans
and
Irving
Howard,
neither
of
whom
had
been
interested
in
the
agreement
at
the
time
when
it
was
made,
had
entered
into
a
contract
with
her
dated
September
5,
1956,
under
which
they
acquired
certain
rights
as
against
her
including
a
right
to
shares
in
the
respondent
company.
By
a
further
agreement,
also
dated
September
20,
1956,
it
was
agreed
between
Mrs.
Allonsius
and
the
respondent
that
she
should
sell
to
the
respondent
and
that
the
respondent
should
purchase
from
her
the
Islington
Park
agreement
and
the
lands
comprised
therein
and
all
her
interest
therein
for
$75,000
payable,
as
to
$1,000,
by
the
issue
to
her
of
1,000
shares
of
the
respondent,
as
to
a
further
$20,000,
by
the
assumption
of
an
indebtedness
of
that
amount
which
she
then
owed
to
Evans
and
Howard,
and
as
to
the
remaining
$54,000,
on
demand,
but
subject
to
what
was
set
out
in
her
agreement
with
Evans
and
Howard
which,
it
was
stated,
was
attached
and
formed
a
part
of
the
agreement
between
her
and
the
respondent.
The
contract
of
September
5,
1956
between
Mrs.
Allonsius,
Evans
and
Howard
contained
corresponding
provisions
by
which
she
undertook
to
assign
the
Islington
Park
agreement
and
the
lands
described
therein
to
the
respondent
for
$75,000
payable
in
the
same
manner
as
described
in
her
agreement
of
September
20
which
the
respondent
but
went
on
to
say:
“4.
Allonsius
agrees
to
account
and
pay
to
the
Company
forthwith,
subject
to
what
is
hereinafter
set
out
with
respect
to
the
sale
to
Lempicki
for
all
monies
received
by
Allonsius
whether
by
way
of
deposit,
part
or
full
payment
or
otherwise
with
respect
to
any
lots
or
lands
sold
by
Allonsius
whether
conditionally
or
otherwise
out
of
(whether
partially
or
otherwise)
the
lands
described
in
agreement
for
sale
No.
167633
(hereinafter
referred
to
as
the
‘‘Company
Lands’’)
;
it
being
understood
and
agreed
that
any
such
transactions
were
entered
into
by
Allonsius
as
Trustee
for
the
Company
and
are
for
the
Company’s
benefit.
Allonsius
acknowledges
that
she
has
sold
38
lots
on
a
proposed
plan
of
subdivision
to
T.
Lempicka
Construction
Company
Limited
under
an
agreement
of
purchase
and
sale
registered
as
instrument
No.
173022
and
has
received
the
deposit
of
$25,650.00
therein
set
out.
Allonsius
shall
forthwith
pay
to
the
Company
the
sum
of
$5,000.00
out
of
such
deposit
and
shall
pay
the
balance
of
such
deposit
to
the
company
on
or
before
the
10th
day
of
November,
1956.
Allonsius
shall
furnish
satisfactory
proof
as
to
the
existence
or
non-existence
of
any
other
such
transactions
before
any
payments
are
made
by
Howard
and
Evans
hereunder.
5.
Upon
such
accounting
and
payment
being
made
by
Allonsius
as
set
out
in
paragraph
4
(which
accounting
and
payment
shall
be
made
forthwith)
Howard
and
Evans
agree
to
purchase
from
Allonsius
and
Allonsius
agrees
to
sell
to
Howard
and
Evans
in
such
shares,
as
they
agree,
500
common
shares
of
the
Company
for
the
sum
of
$500.00.
Howard
and
Evans
further
agree
to
then
lend
the
Company
the
sum
of
$29,500.00
and
to
then
assign
and
discharge
mortgage
No.
172962
for
$20,000.00
which
shall
be
owed
by
the
Company
to
them
so
that
the
Company
shall
then
owe
Howard
and
Evans
a
total
of
$49,500.00
in
such
proportions
as
Howard
and
Evans
agree.
The
Company
shall
then
repay
Allonsius
the
sum
of
$4500.00
so
that
the
total
indebtedness
of
the
Company
to
Allonsius
shall
be
$49,500.00.
Howard
and
Evans
agree
to
lend
such
monies
to
the
Company
on
or
before
the
21st
day
of
September,
1956,
notwithstanding
that
Allonsius
shall
be
indebted
to
the
Company
in
the
sum
of
$20,560.00,
with
respect
to
the
Lempicki
deposit,
provided,
however,
that
if
at
the
time
of
such
loan
by
Howard
and
Evans,
Allonsius
is
still
indebted
to
the
Company
with
respect
to
any
portion
of
the
said
Lempicki
deposit,
then
Allonsius
shall
convey
25%
of
the
issued
common
stock
of
the
Company
owned
by
her
to
Howard
and
Evans
as
pledge
and
security
for
the
repayment
by
her
to
the
Company
of
the
balance
of
the
Lempicki
deposit
on
or
before
November
10th,
1956.’’
(Italics
added.)
The
references
to
the
Lempicki
sale
arose
from
the
fact
that
on
August
7,
1956
Mrs.
Allonsius
had
agreed
to
sell
a
portion
of
the
land
to
T.
Lempicki
Construction
Company
Limited
for
$171,000
and
had
received
$25,650
on
account
of
this
price
as
a
deposit.
The
contract
did
not
purport
to
be
made
by
Mrs.
Allonsius
as
a
trustee
and
it
was
expressly
made
subject
to
the
registration
of
a
plan
of
subdivision
of
the
property.
It
went
on
to
provide
that
if
the
plan
was
not
registered
on
or
before
December
15,
1956
the
purchaser
might
terminate
the
contract
and
in
that
event
would
be
entitled
to
repayment
of
the
deposit
within
one
month.
By
September
20,
when
the
Islington
Park
agreement
was
assigned
to
the
respondent,
it
had
already
become
apparent
that
the
plan
would
not
be
registered
by
December
15,
1956
and
that
the
Lempicki
company
would
become
entitled
to
cancel
its
contract
and
demand
repayment
of
the
deposit.
A
notice
exercising
the
purchaser’s
rights
and
demanding
repayment
of
the
deposit
was
in
fact
given
by
the
Lempicki
company
on
or
about
December
17,
1956,
but
the
money
was
not
repaid
either
by
Mrs.
Allonsius
or
by
the
respondent
nor
was
any
part
of
the
deposit
ever
paid
by
Mrs.
Allonsius
to
the
respondent
as
contemplated
by
the
contract
between
her
and
Evans
and
Howard.
An
March
29,
1957
the
respondent
accepted
an
offer
from
Aluminum
Company
of
Canada
Limited
for
the
purchase
of
another
portion
of
the
land
for
about
$110,000
and
received
$5,000
as
a
deposit.
The
respondent,
however,
ran
into
difficulties
and
delays
in
carrying
out
its
proposed
development
of
the
property
and
in
finding
purchasers
for
portions
of
it
and
therefore
endeavoured
to
find
a
purchaser
who
would
take
the
whole
project
off
its
hands.
In
this
as
well
it
did
not
succeed
at
first
but
ultimately,
by
an
indenture
dated
October
7,
1957
and
made
between
the
respondent
of
the
first
part,
Ridge
Realty
Limited
of
the
second
part
and
Evans
and
Howard
of
the
third
part,
the
respondent
assigned
to
Ridge
Realty
Limited
all
its
interest
in
the
lands
described
in
the
Islington
Park
agreement
together
with
all
its
interest
in
or
under
the
agreement,
in
consideration
of
$125,000
to
be
paid
by
Ridge
Realty
Limited
to
Evans
and
Howard
at
the
rate
of
$5,000
an
acre
on
the
sale,
transfer
or
con-
veyance
by
Ridge
Realty
Limited
of
any
of
a
certain
portion
of
the
lands,
such
payment
to
be
secured
in
the
meantime
by
a
vendor’s
lien
on
that
portion
of
the
property
in
favour
of
the
respondent
and
in
favour
of
Evans
and
Howard.
It
was
a
condition
of
the
assignment
that
Ridge
Realty
Limited
should
also
pay
the
instalments
then
due
and
thereafter
to
become
due
to
Islington
Park
Limited
and
Ridge
Realty
Limited
further
agreed
to
assume
the
agreements
for
sale
with
T.
Lempicki
Construction
Company
Limited
and
with
Aluminum
Company
of
Canada
Limited
which
agreements
the
respondent
convenanted
to
assign
to
it.
The
indenture
then
went
on
to
say:
“In
this
connection
T.
Lempicki
Construction
Company
Limited
has
paid
to
one,
Juliana
Allonsius
the
sum
of
$25,650.00
and
the
said
Aluminum
Company
of
Canada
Limited
has
paid
to
the
Assignor
the
sum
of
$5000.00
Neither
the
said
Juliana
Allonsius
or
the
Assignor
shall
be
required
to
account
to
the
Assignee
for
the
said
money
so
received
and
as
against
the
said
Assignee
shall
be
deemed
entitled
to
retain
the
said
monies
so
received.
The
Assignee
covenants
and
agrees
to
assume
the
said
agreements
and
to
indemnify
and
save
harmless
the
Assignor
and
the
said
Juliana
Allonsius
of
and
from
all
actions,
manner
of
actions,
debts,
liabilities
and
demands
whatsoever
with
respect
to
the
said
agreements
and
either
of
them.”
On
the
same
day
Juliana
Allonsius
executed
an
acknowledgment
under
seal
with
respect
to
her
interest
in
the
$125,000
to
which
was
appended
a
covenant
by
Evans
and
Howard
to
hold
the
$125,000
which
was
received
upon
certain
trusts
for
her
and
them.
The
acknowledgement
by
Mrs.
Allonsius,
which
was
admitted
to
have
been
made
‘
in
agreement
with
’
’
the
respondent
contained
the
following
with
respect
to
the
Lempicki
deposit:
‘
‘
I,
JULIANA
ALLONSIUS,
hereby
acknowledge
that
attached
hereto
are
unsigned
copies
of
assignments
of
agreements
from
Belmont
Heights
Limited
to
Ridge
Realty
Limited
and
of
an
agreement
between
Murray
Gruson
and
myself,
together
with
Harry
Evans
and
Irving
Howard,
all
of
which
are
dated
October
7th,
1957.
And
I,
the
said
Juliana
Allonsius,
further
acknowledge
that
I
still
owe
Belmont
Heights
Limited
the
monies
received
by
me
from
T.
Lempicki
Construction
Company
Limited
in
the
sum
of
$25,650.00
notwithstanding
anything
contained
in
the
assignment
of
agreement
from
Belmont
Heights
Limited
to
Ridge
Realty
Limited,
a
copy
of
which
is
attached
hereto,
provided
however
that
when
the
debt
to
Lempicki
is
satisfied
then
the
said
debt
to
Belmont
Heights
Limited
is
also
satisfied.
And
I,
the
said
Juliana
Allonsius,
further
covenant,
acknowledge
and
agree
that
I
will
indemnify
and
save
harmless
Harry
Evans,
Irving
Howard
and
Belmont
Heights
Limited
of
and
from
all
actions,
causes
of
actions,
claims
and
demands
whatsoever
with
respect
to
any
monies
paid
to
me
by
T.
Lempicki
Construction
Company
Limited
or
anyone
else
on
behalf
of
any
of
the
lands
referred
to
in
the
Islington
Park
Limited
agreement
registered
as
instrument
No.
167633.’’
(Italics
added).
The
transaction
with
Ridge
Realty
Limited
was
completed
and
at
some
time
prior
to
May
31,
1958
that
company
repaid
the
Lempicki
deposit.
Later,
by
several
payments,
the
first
of
which
was
made
on
March
30,
1959
and
the
last
on
July
1,
1964,
it
also
paid
the
$125,000.
The
Minister’s
case
for
adding
the
amount
of
the
deposit
in
computing
the
respondent’s
income
for
1958
is
that
though
the
$25,650
was
never
in
fact
paid
over
to
it,
Mrs.
Allonsius
was
a
trustee
for
the
respondent
of
the
purchaser’s
rights
under
the
Islington
Park
agreement
when
on
August
8,
1956,
she
made
the
agreement
with
the
Lempicki
company
and
that
she
received
the
deposit
as
trustee
for
the
respondent,
that
at
that
time
the
$25,650,
being
a
mere
returnable
deposit,
was
not
income
in
anyone’s
hands
but
that
on
October
7,
1957
when
the
transaction
between
the
respondent
and
Ridge
Realty
Limited
was
entered
into
or
subsequently
when
Ridge
Realty
Limited
repaid
an
equivalent
amount
to
the
Lempicki
company
the
deposit
made
earlier
become
income
in
the
hands
of
Mrs.
Allonsius
and
that
since
she
was
trustee
of
the
deposit
for
the
respondent
the
latter
then
became
entitled
to
enforce
payment
thereof
and
the
amount
was
therefore
income
of
the
respondent
by
virtue
of
Section
63(6),
(7)
of
the
Act.
These
subsections
read
as
follows
:
“(6)
Such
part
of
the
amount
that
would
be
the
income
of
a
trust
or
estate
for
a
taxation
year
if
no
deduction
were
made
under
subsection
(4)
or
under
regulations
made
under
paragraph
(a)
of
subsection
(1)
of
section
11
as
was
payable
in
the
year
to
a
beneficiary
or
other
person
beneficially
interested
therein
shall
be
included
in
computing
the
income
of
the
person
to
whom
it
so
became
payable
whether
or
not
it
was
paid
to
him
in
that
year
and
shall
not
be
included
in
computing
his
income
for
a
subsequent
year
in
which
it
was
paid.
(7)
For
the
purposes
of
subsections
(4),
(4a)
and
(6),
an
amount
shall
not
be
considered
to
have
been
payable
in
a
taxation
year
unless
it
was
paid
in
that
year
to
the
person
to
whom
it
was
payable
or
he
was
entitled
in
that
year
to
enforce
payment
thereof.’’
On
the
facts
which
I
have
outlined
I
do
not
think
the
Minister’s
contention
can
prevail.
It
depends,
as
I
understand
it,
(among
other
things)
on
the
respondent
having
been,
at
the
time
when
Ridge
Realty
Limited
paid
$25,650
to
the
Lempicki
company,
that
is
to
say,
either
on
October
7,
1957
or
on
some
later
date
prior
to
May
31,
1958,
the
beneficiary
of
a
trust
of
the
$25,650.
which
Mrs.
Allonsius
received
from
the
Lempicki
company
on
August
8,
1956.
On
the
facts
this
in
turn
depends
on
whether
the
respondent
had
on
August
8,
1956
rights
as
beneficiary
of
a
trust
in
the
$25,650
received
by
Mrs.
Allonsius
and
continued
to
have
such
rights
up
to
the
time
when
Ridge
Realty
Limited
repaid
an
equivalent
amount
to
the
Lempicki
company.
This,
in
my
view,
is
negatived
by
the
evidence.
Though
I
doubt
that
the
respondent
was
ever
in
the
position
of
beneficiary
of
a
trust
of
the
purchaser’s
rights
under
the
agreement,
even
if
it
be
assumed
that
this
was
the
situation
when
on
August
8,
1956
Mrs.
Allonsius,
not
purporting
to
act
as
a
trustee,
agreed
to
sell
a
portion
of
the
property
to
the
Lempicki
company
and
received
the
deposit,
and
that
despite
her
personal
liability
to
return
it
to
the
Lempicki
company
in
events
which
later
occurred
the
respondent
was
entitled
to
the
benefit
of
whatever
rights
she
acquired
1
in
it,
the
rights
of
the
respondent
as
against
her
in
my
opinion
become
merged
in
the
rights
which
accrued
to
the
respondent
as
a
result
of
the
transaction
of
September
20,
1956
between
her
and
the
respondent.
The
result
of
this
transaction,
consisting
of
the
agreement
of
that
date
together
with
the
indenture
of
the
same
date,
appears
to
me
to
have
been
that
as
between
Mrs.
Allonsius
and
the
respondent
the
latter
became
entitled
(i)
to
the
rights
of
the
purchaser
under
the
Islington
Park
agreement,
subject
to
the
respondent
assuming
the
burden
of
making
the
remaining
payments
under
that
agreement;
(ii)
to
a
right
to
be
indemnified
by
Mrs.
Allonsius
against
any
claim
against
the
land
by
the
Lempicki
company
for
repayment
of
the
deposit;
and
(iii)
to
payment
of
the
deposit
in
the
event
of
the
Lempicki
transaction
being
completed.
The
two
last
mentioned
rights
in
my
opinion
flow
from
her
covenant
that
she
had
done
nothing
to
encumber
the
lands.
As
between
Mrs.
Allonsius
and
Evans
and
Howard,
Mrs.
Allonsius
was
also
bound
to
pay
the
deposit
over
to
the
respondent
by
November
10th
but
I
do
not
think
that
anything
in
the
agreements
rendered
her
liable
to
the
respondent
to
do
so
except
on
the
indemnity
basis
already
mentioned
in
events
which
never
arose.
Had
Mrs.
Allonsius
repaid
the
money
to
the
Lempicki
company
her
liability
to
all
concerned
would
plainly
have
been
discharged.
On
the
other
hand
had
she
paid
the
money
to
the
respondent
it
would
I
think
be
clear
that
the
respondent
would
have
come
under
an
obligation
to
indemnify
her
against
any
claim
by
the
Lempicki
company
for
return
of
the
deposit
based
on
her
personal
liability
to
that
company
to
repay
it.
Accordingly,
it
appears
to
me
that
even
if
the
respondent
had
rights
in
the
Lempicki
deposit
as
beneficiary
of
a
trust
prior
to
September
20,
1956,
(which,
as
already
stated,
I
doubt)
the
trust
came
to
an
end
with
the
transaction
of
that
date
and
from
that
time
onward
did
not
exist.*
Moreover,
in
my
view,
in
the
events
which
later
transpired
the
respondent
never
did
have
a
right
to
recover
the
amount
of
the
Lempicki
deposit
from
Mrs.
Allonsius
or
from
anyone
else.
It
is,
of
course,
plain
that
if
Mrs.
Allonsius
had
paid
the
amount
to
the
respondent
and
the
same
agreement
had
thereafter
been
made
between
the
respondent
and
Ridge
Realty
Limited
the
respondent
might
have
realized
$25,650
more
than
it
in
fact
realized.
But
this
did
not
happen.
Instead
with
no
right
upon
which
it
could
recover
the
deposit
from
Mrs.
Allonsius
the
respondent
made
a
contract
with
Ridge
Realty
Limited
which
provided
inter
alia
that
both
the
respondent
and
Mrs.
Allonsius
should
be
saved
harmless
from
any
claim
by
the
Lempicki
company.
At
the
same
time
a
declaration
executed
by
Mrs.
Allonsius
‘‘in
agreement
with’’
the
respondent
acknowledged
that
she
owed
the
deposit
to
the
respondent
provided,
however,
that
when
the
Lempicki
claim
was
satisfied
her
obligation
to
the
respondent
should
be
at
an
end
as
well
and
by
the
same
document
she
went
on
to
covenant
to
save
Evans,
Howard
and
the
respondent
harmless
from
any
claim
by
the
Lempicki
company
for
the
deposit.
In
my
view,
as
already
mentioned,
in
the
events
which
transpired
Mrs.
Allonsius
was
not
at
any
time
after
September
20,
1956,
bound
as
between
herself
and
the
respondent
to
pay
over
the
deposit
and
the
effect
of
the
declarataion,
which
I
think
plainly
amounts
to
a
contract
between
her
and
Evans
and
Howard
if
not
between
her
and
the
respondent.
as
well,
is
to
relieve
her,
in
the
event
mentioned
in
the
proviso,
from
her
earlier
undertaking
to
Evans
and
Howard
to
pay
the
deposit
to
the
respondent
and
at
the
same
time
to
state
what
was
already
implicit
in
the
situation
that
when
the
Lempicki
company
was
repaid
and
her
contracts
to
indemnify
the
respondent
were
thus
at
an
end
there
would
be
no
right
in
the
respondent
to
recover
the
amount
from
her.
Neither
Evans
nor
Howard
were
trustees
of
their
rights
for
the
respondent
and
their
right
under
the
agreement
of
September
5,
1956
to
require
Mrs.
Allonsius
to
pay
the
deposit
to
the
respondent
was,
in
my
view,
subjected
to
and
modified
by
the
terms
of
the
declaration
so
that
when
the
Lempicki
claim
was
satisfied
they
too
were
no
longer
in
a
position
to
require
Mrs.
Allonsius
to
pay
the
amount
to
the
respondent.
Moreover,
even
if
the
legal
result
of
the
wording
by
which
the
contract
of
September
5,
1956
between
Mrs.
Allonsius
and
Evans
and
Howard
was
incorporated
into
the
transaction
of
September
20,
1956
between
Mrs.
Allonsius
and
the
respondent
can
be
regarded
as
having
been
that
Mrs.
Allonsius
became
liable
to
the
respondent
for
the
$25,650
it
is
I
think
plain
that
such
liability
was
not
upon
any
trust
but
at
most
a
simple
contractural
liability
to
pay
by
November
10,
1956.
The
amount,
as
previously
mentioned,
was
not
income
in
anyone’s
hands
at
that
time
but
neither
can
it
be
regarded
as
income
of
the
respondent
in
1958
since
the
effect
of
the
transaction
which
took
place
in
that
year
between
the
respondent
and
Ridge
Realty
Limited,
in
my
view,
was
not
to
give
the
respondent
any
further
right
against
Mrs.
Allonsius
but
simply
to
relieve
her
and
the
respondent
from
any
claim
by
the
Lempicki
company
for
the
deposit.
At
the
same
time
the
declaration
of
Mrs.
Allonsius,
which
is
the
only
indication
of
a
contract
between
her
and
the
respondent
at
that
time
negatived
her
liability
to
the
respondent
in
events
which
transpired.
If,
therefore,
Mrs.
Allonsius
ever
did
become
indebted
to
the
respondent
for
the
deposit
the
liability
must
have
been
ineurred
in
the
1957
and
not
in
the
1958
taxation
year.
I
am
accordingly
of
the
opinion
that
there
is
no
basis
upon
which
the
Minister
could
properly
include
the
$25,650
in
the
computation
of
the
respondent’s
income
for
1958
and
that
his
appeal
therefore
fails.
In
view
of
this
conclusion
it
is
not
strictly
necessary
for
me
to
deal
with
the
alternative
issue
whether
the
$125,000
to
be
paid
at
some
indefinite
future
time
when
parts
of
the
property
might
be
sold
by
Ridge
Realty
Limited
should
have
been
brought
into
the
computation
of
the
respondent’s
1958
income
at
its
full
amount
but
as
the
issue
is
raised
and
in
certain
events
could
conceivably
bear
on
the
computation
of
the
respondent’s
income
for
later
years,
I
shall
express
my
view
on
it.
It
will
be
recalled
that
the
$125,000
was
voluntarily
brought
into
the
computation
by
the
respondent
in
its
return
for
1998
at
its
full
amount.
It
was
suggested
by
counsel
that
this
might
have
been
done
because
even
so
the
computation
showed
a
loss
so
that
there
was
no
tax
to
pay
in
any
event
but
that
when
the
Minister
brought
the
$25,650
into
the
computation
the
respondent
became
entitled
on
its
part
to
show
that
the
$125,000
brought
into
its
computation
was
more
than
should
have
been
accounted
for.
It
is
of
course
not
difficult
to
understand
that
$125,000
payable
without
interest
at
some
uncertain
future
time
could
scarcely
be
regarded
as
having
a
present
value
of
$125,000.
The
Minister’s
position
on
this
issue
was
that
the
$125,000
was
required
to
be
brought
in
at
the
full
amount
by
Section
85B
(l)(b)
which
provides
that:
“85B
(1)
In
computing
the
income
of
a
taxpayer
for
a
taxation
year,
(b)
every
amount
receivable
in
respect
of
property
sold
or
services
rendered
in
the
course
of
the
business
in
the
year
shall
be
included
notwithstanding
that
the
amount
is
not
receivable
until
a
subsequent
year
unless
the
method
adopted
by
the
taxpayer
for
computing
income
from
the
business
and
accepted
for
the
purpose
of
this
Part
does
not
require
him
to
include
any
amount
receivable
in
computing
his
income
for
a
taxation
year
unless
it
has
been
received
in
the
year;’’
It
is,
I
think,
plain
that
if
the
$125,000
was
an
‘
amount
receivable”
within
the
meaning
of
this
subsection
at
any
time
in
the
respondent’s
1958
taxation
year
it
was
properly
included
at
its
full
face
amount.
On
the
other
hand
the
terms
upon
which
it
was
to
be
paid
were
such
that
no
right
to
any
part
of
the
amount
would
arise
until
at
some
indefinite
time
the
purchaser
sold
certain
portions
of
the
property
and
as
this
might
never
occur
I
should
not
have
thought
that
the
amount
or
any
part
of
it
would
fall
within
the
meaning
of
‘‘amount
receivable’’
until
the
event
upon
which
the
amount
would
become
payable
occurred.
In
my
view
it
was
therefore
open
to
the
respondent
to
show
if
it
could,
and
the
onus
was
upon
it
to
do
so
if
it
was
to
succeed
on
this
issue,
that
the
event
or
events
upon
which
the
$125,000
was
to
become
payable
did
not
occur
prior
to
May
31,
1958.
As
I
see
it,
however,
no
evidence
was
given
to
establish
when
the
event
or
events
occurred.
All
that
was
put
in
evidence
was
a
copy
of
a
ledger
sheet
showing
the
amounts
and
dates
of
the
payments
by
which
the
$125,000
was
said
to
have
been
received
commencing
with
a
payment
on
March
30,
1959
and
ending
with
a
final
one
on
July
1,
1964.
In
my
view
this
does
not
establish
when
the
sales
upon
which
the
$125,000
was
to
become
due
were
made
by
Ridge
Realty
Limited
and
in
particular
it
does
not
establish
that
they
were
not
made
prior
to
May
31,
1958.
A
submission
was
also
made
that
the
wording
of
Section
85B
(1)(b)
would
not
apply
because
the
contract
made
between
the
respondent
and
Ridge
Realty
Limited
was
not
a
sale
of
the
property
‘‘in
the
course
of
the
[respondent’s]
business’’
but
on
the
facts
I
do
not
regard
this
submission
as
tenable.
There
is
accordingly,
in
my
view,
no
basis
upon
which
it
may
be
held
that
the
$125,000
was
not
properly
included
in
the
computation.
As
already
indicated,
however,
the
Minister’s
appeal
fails
on
the
issue
as
to
the
$25,650
and
it
will
therefore
be
dismissed
with
costs.
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