JUDSON, J. (all concur) :—The sole question in this appeal is whether a profit of $263,864.03 was properly assessed in the taxation year 1955. The judgment of the Exchequer Court holds that this profit must be excluded in assessing the profits for the

McDonald J.A.:

The issue to be decided in this case is whether a company, such as Pardee Equipment Limited (the “Respondent”), may claim inventory allowance deductions under s.20(1)(gg) of the Income Tax Act (the “Act”) for goods, the title of which is held by another company, while many of the other incidents of ownership are vested in the taxpayer. In other words, what proprietary interest is required before goods held for sale by a taxpayer may properly be considered its “inventory”.