Luc Theriault v. Minister of National Revenue, [1978] CTC 3160

Roland St-Onge (orally May 3, 1978) [TRANSLATION]:—The appeal of Mr Luc Thériault, concerning the 1972 and 1973 taxation years, came before me on December 5, 1977 at Ottawa, Ontario. The appellant was not represented by counsel.

His notice of appeal was incomplete and only the reply to the notice of appeal gave some idea of the problem.

Paragraph 2 of the reply to the notice of appeal reads as follows:

(a) during the 1972 and 1973 taxation years, the appellant held the position of representative of Equipement de Construction du Québec Limitée;

(b) during the years in question the Appellant was paid on a commission basis;

(c) the appellant as a commission salesman was reimbursed by his employer for all his automobile and promotion expenses;

(d) the appellant also received from his employer $1,500 for the 1972 taxation year and $1,925 for the 1973 taxation year in the form of a fixed monthly allowance for his travel expenses;

(e) the appellant claimed, as expenses incurred for the purpose of earning income from his employment, amounts of $808.90 for the 1972 taxation year and $3,110.46 for the 1973 taxation year;

(f) by a notice of assessment for the 1972 taxation year dated June 9, 1975, and a notice of reassessment for the 1973 taxation year dated April 5, 1976, the respondent refused to agree to these deductions since the appellant had already been reimbursed for these expenses by his employer;

(g) the respondent also added to the appellant’s income amounts of $3,291 for the 1972 taxation year and $2,798 for the 1973 taxation year, claimed by the latter as a capital cost allowance on his automobile, since all the automobile expenses incurred by the appellant were reimbursed by his employer;

(h) the appellant further claimed from his employer reimbursement of promotion expenses of $3,967 for the 1972 taxation year, and $4,651 for the 1973 taxation year;

(i) of the total of these expenses reimbursed by the employer, the respondent added to the appellant’s income amounts of $2,842.27 for the 1972 taxation year and $1,731.47 for the 1973 taxation year, since these represented unproved expenditures;

(j) these points were confirmed in a notification from the Minister dated October 28, 1976.

At the hearing the appellant was unable to refute the respondent’s allegations.

The appellant stated repeatedly that he had an action in the Superior Court against Equipement de Construction du Québec Limitée and that the automobile and promotion expenses had been deducted from his commissions. It appears, on the other hand, that the appellant received amounts representing unproved expenditures and claimed expenses for which he has already been reimbursed by the company.

In any case the appellant, who had the burden of proving that the respondent’s assessment was unjustified in fact and in law, has not succeeded in doing so.

Counsel for the respondent has not insisted on the penalties, saying that the appellant had “troubles enough of that kind”.

In consequence the appeal relating to the 1972 and 1973 taxation years is allowed in part and the matter is referred back to the respondent for reassessments for the purpose of cancelling the penalties imposed for the said years.

In all other respects the appeal is dismissed.

Appeal allowed in part.