Bell J.T.C.C.: — The appeal is from notices of reassessment for its 1987 and 1988 taxation years in which the Minister of National Revenue (“Minister”) denied the deduction of the penalty in the amount of $1,169,738 imposed on the Appellant

Bell J.T.C.C.: — The issues in this appeal are:

1. Whether the following sums in the following years claimed as non-capital losses by the Appellant are deductible,

Christie A.C.J.T.C. : — This appeal is governed by the informal procedure prescribed under section 18 and following sections of the Tax Court of Canada Act. The year under review is 1994.

Tremblay J.T.C.C.: — This appeal was heard under the informal procedure at Québec, Quebec, on October 5, 1995.

McArthur J.T.C.C.: — This appeal was heard under the informal procedures of this Court.

O’Connor J.T.C.C. : — This appeal was heard at Ottawa, Ontario, on August 6, 1996 pursuant to the General Procedure of this Court.

Testimony on behalf of the Appellant (“Dew”) was given by Brian Smith, its vice-president engineering, James Pickard, a Program Manager and Engineer and Kevin Stewart, a representative of Public Works Canada who, in 1992, was a senior contract officer with the Department of Supply and Services.

Bell J.T.C.C. : —

Issue

The issue in respect of the Appellant’s 1992 taxation year is whether each of

Taylor J.T.C.C.: — These are appeals heard in Toronto, Ontario, on August 2, 1996 against assessments for the years 1991, 1992 and 1993, in which the Respondent had disallowed rental losses claimed against other income, under the Income

Sobier J.T.C.C. (orally): — The Appellant in this proceeding filed his Notice of Appeal with the Court apparently on or about January 29th, 1996 because there is a document called “Notice of Appeal, informal procedure” signed by Mr. Zhuang

Sobier J.T.C.C.: — This appeal was heard under the Informal Procedure of this Court.