Sarchuk, T.C.J.:—Sass Manufacturing Limited appeals from reassessments of income tax for its 1981, 1982 and 1983 taxation years. These appeals raise two separate and distinct issues.

Couture C.J.T.C. [Translation] :—This appeal is from an assessment dated September 16, 1983 for the 1979 taxation year. In this assessment the respondent disallowed a deduction for inventory claimed by the appellant in computing its income in the amount of

Brulé T.C.J.: —

Taylor, T.C.J.:— These are appeals heard in Toronto, Ontario, on March 22, 1988, against income tax assessments for the taxation years 1979, 1980, and 1981, since the Minister of National Revenue disallowed the claim of $301,757 as an “allowable business

Christie, A.C.J.T.C.: — In computing its income for its 1983 taxation year the appellant sought to deduct $20,000 paid in settlement of a claim for damages plus $12,589 in legal fees related to that claim. The respondent reassessed on September