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”.

Desjardins J.A.:

1 This is an application for judicial review of a judgment of the Tax Court of Canada which dismissed the applicant's appeal from assessments made under the Income Tax Act for the 1990, 1991, 1992 and 1993 taxation years.