Search - 包建铎违纪违法案件以案促改以案促治专题组织生活会 个人对照检查

The respondent contended that: — the appellant was not, in 1973 or 1974, carrying on the farm Operation as a business or with a reasonable expectation of profit; — the amounts expended, if any, were not incurred to produce income but were personal or living expenditures of the appellant. Evidence The financial statement upon which the claim was based is reproduced for assistance: Income Hay $ 360.00 Gas Tax Refund 34.77 394.77 Expenses Automobile Expense $1,230.08 Less: Personal Use 30% 369.02 861.06 House Repairs 459.47 Power, Fuel, Telephone & Insurance 875.61 Property Taxes 499.28 1.834.36 Less: Personal Use 30% 550.31 1,284.05 Accounting and Legal 240.05 Supplies and Material 171.10 Tools 358.14 Machinery Expense 326.72 Repairs and Maintenance — Barn 280.20 Repairs and Maintenance —_— Fences 296.71 Seeds and Plants 67.70 Fertilizers 315.78 Custom Work 60.00 4,261.51 Farm Loss for the Year $3,866.74 Total Loss in 1974 3,866.74 Add Loss Carried Forward 805.56 4,672.30 Allowable 2,500.00 2,500.00 2,172.30 Allowable /2 1,086.15 1,086.15 Loss Carried Forward to 1975 1,086.15 Farm Loss for Tax Purposes in 1974 $3,586.15 The appellant described the circumstances to the Board in this manner: The reasons for ruling me not a farmer given to me by the income tax people are that I inherited the farm in 1969 and the only cattle purchased in 1973 were retained for approximately two (2) weeks. ... Copies of the financial statements for those years were filed with the Board, and they showed respectively the following loss amounts: 1973 — $3,305.56 1974 — $3,586.15 (amount in issue) 1975 — $3,727.29 1976 — $3,571.20 1977 — $3,576.68 Particulars of the details on these statements were readily and candidly supplied by the appellant to the Board. ...

Conn proceeded to have plans drawn up for a motor hotel on each of the Great West and 4th Avenue sites expending on such plans the following amounts: (i) 4th Avenue site — $1,081.57 (ii) Great West property — $1,065.00 8. ... They are: (1) Bel-Conn Building — 14 storeys (2) Americana — 50-suite apartment (3) Westerner — 30-suite apartment In 1959, because of Conn’s experience in financing and building apartments, he was approached by Mr Katchen, apparently ignoring the fact that the latter was a real estate dealer. ...

Facts According to the Evidence 3.01 During the taxation years 1972, 1973 and 1974, the appellant was Carrying on a scrap metal business under the registered name of L & F Metals Co on 4710 Drolet Street, Montreal. ... They also found a weigh bill in the name of L Peters which corresponded with the receiving slip in the name of L & F Metals Co. 3.26 Another witness, Mr Gilles Bouchard, filed as exhibit R-10, documents issued by the Department of Vehicles & Automobiles to the effect that immatriculation vehicle numbers F314-353 and F253-771 were registered in the name of L & F Metals Co. 4. ... The same amounts were on receiving slips or weigh bills in the names of L & F Metals Co, L & F or L Peters. ...

In computing his income for the taxation years in question, the appellant reported capital gains from the disposition of certain real estate as follows: taxation year capital gain 1975 $ 9,204.50 1976 $18,363.96 1977 $17,919.13 3. In assessing the appellant for the taxation years in question, the Minister of National Revenue added the following sums to the appellant’s income: additional taxation year income 1975 $ 4,602.25 1976 $ 9,181.96 1977 $17,648.73 4. ... The appellant filed as Exhibits A-1 and A-2 dated May 17, 1978 and April 1979 respectively, one-year leases for the properties at 86 Carruthers Street and at RR 6 — Highway 31 in the City of Ottawa. ...

In making its returns of income for its 1972, 1973 and 1974 taxation years the appellant claimed capital cost allowance under class 10 and class 6 of schedule B to Income Tax Regulation 1100 as follows: 1972 1973 1973 1974 1974 Class 6 $ 42,165.47 $ 58,624.29 $ 60,235.39 Class 10 $381,977.82 $600,252.15 $594,286.50 3. In re-assessing the appellant for the taxation years under appeal, the respondent determined that certain of the capital assets which had been classified by the appellant to class 10 should have classified as class 6 and accordingly capital cost allowance was allowed the appellant as follows: 1972 1973 1973 1974 1974 Class 6 $ 60,568.29 $101,297.69 $132,658.03 Class 10 $326,769.11 $483,423.43 $417,176.40 4. As a result of the said re-assessment, the net income of the appellant was increased for the years under appeal by the following amounts: 1972 $ 36,805.89 1973 $ 74,155.32 1974 $104,687.46 The basic question is whether some one hundred and five so-called “trailers” owned by the appellant come within the meaning and intent of property falling under class 10 of Schedule B to the Income Tax Regulations permitting a deductible allowance of 30% claimed by the appellant or whether the property comes under class 6 of Schedule B where the deductible allowance of 10% as claimed by the respondent in his reply to the notice of appeal. ...

As Mr RS W Fordham, Assistant Chairman of the former Tax Appeal Board wrote in “Tax Appeal Board Practice, 3rd Edition” on that specific point, accepting the decision of the King’s Bench Division of the High Court of Justice in Dixon & Gaunt Ltd and James Hare Ltd v Commissioners of Inland Revenue, [1947] 1 All ER 723; (1947), 29 Tax Cases 289, and cited in Ambassador Ventures cited above at 1234: In short, the Crown must make out a prima facie case in first instance. ... This sum was reimbursed before the end of the fiscal year; (c) paid for material, supplies and rent on Covertite (Ontario) Limited’s behalf in the amount of $6,500. 5.18 The taxable income of the appellant is as follows in the taxation years ending on the indicated dates: Jan. 31/67 $34,833.23 Jan. 31/68 $34,831.36 Jan. 31/69 $35,000 Jan. 31/70 $33,101 Jan. 31/71 $ 4,070 Dec. 30/71 $34,502 Dec. 30/72 $50,015 5.19 The salaries and bonuses paid by the appellant to Mr Albert Warner have totalled the following in the taxation years ending on the indicated dates: Jan. 31/67 $ 16,040 Jan. 31/68 $ 27,021 Jan. 31/69 $ 24,034 Jan. 31/70 $ 10,011 Jan. 31/71 Nil Dec. 30/71 $ 65,275 Dec. 30/72 $145,673 5.20 The combined taxable incomes of the appellant and Covertite (Ontario) Limited were as follows for the taxation years terminating on the indicated dates: Dec. 30/71 $62,315 Dec. 30/72 $70,907 5.21 The appellant’s opinion concerning incidence of tax is expressed in Exhibit R-4, page 4: Also an analysis of the tax position of the two companies would readily indicate that there was never any attempt to minimize the taxes payable by the use of the two corporate entities, but just the reverse. ... The list is as follows: Doris Trucking Company Limited v MNR, [1968] CTC 303; 68 DTC 5204; Jordans Rugs Ltd et al v MNR, [1969] CTC 445; 69 DTC 5290; Holt Metal Sales of Manitoba Limited and Industrial Metals Processing Limited v MNR, [1970] CTC 144; 70 DTC 6108; MNR v Howson & Howson Limited and Howson & Howson Company (Cargill) Limited, [1970] CTC 36; 70 DTC 6055; C P Loewen Enterprises Ltd v MNR, [1972] CTC 396; 72 DTC 6298; Classic’s Little Books Inc v Her Majesty the Queen, [1973] CTC 94; 73 DTC 5096; Her Majesty the Queen v Bobbie Brooks (Canada) Limited, [1973] CTC 431; 73 DTC 5357; Capital Garment Co Inc v MNR, [1974] CTC 2199; 74 DTC 1164; Miss Sun Valley Limited v MNR, [1974] CTC 2274; 74 DTC 1217; Kitchener News Leaseholds Limited and Kitchener News Company Limited v MNR, [1974] CTC 2305; 74 DTC 1226; Industrial Trailer Rentals Limited v Her Majesty the Queen, [1974] CTC 775; 74 DTC 6577; ABC Diaper Service Inc v MNR, [1975] CTC 2087; 75 DTC 66; Jordan Holdings Ltd et alv MNR, [1975] CTC 2287; 75 DTC 216; Her Majesty the Queen v Arthill Enterprises Limited, [1975] CTC 594; 75 DTC 5419; Sandell Developments Ltd and Grid Holdings Ltd v MNR, [1976] CTC 2393; 76 DTC 1293; Her Majesty the Queen v Ball Brothers Limited, [1976] CTC 793; 77 DTC 5004. 6.3 Comments 6.3.1 Points pro & contra After studying the law and the jurisprudence, the Board thinks that it is best to draw up the points which prima facie are pro and con the appellant according to the evidence adduced. 6.3.2 The points in favour of the appellant The following facts support the appellant’s thesis: 1) Mrs Warner’s decision to invest outside Quebec in 1969 (paragraphs 5.09 and 5.10 of the Facts) whatever her opinion, is well founded or not concerning the political situation of the Province of Quebec and school problems; 2) The fact that the new corporation was located in Ontario and consequently not in the same working territory as the appellant company (the fact that sometimes one works in the territory of the other is immaterial), (see paragraph 5.11 of the Facts); 3) The fact of the complete separated business (paragraph 5.13 of the Facts); 4) The fact of the presence in Ontario of the experienced Mr McKissock (paragraphs 5.08 and 5.11 of the Facts). 6.3.3 The points against the appellant The following facts support the respondent’s thesis: 1) The ownership by Mrs Warner (the only shareholder of Covertite (On- tario(Limited) of one share of the appellant company from 1958 to 1971; 2) Mrs Warner borrowing $9,006 from her husband (the main shareholder of the appellant company). ...

He was assessed by the respondent accordingly. 3.6 In May 1971, the appellant borrowed from his employer, inter alia, the sum of $14,876.58, which he used to reduce his debt to the banking institution. 3.7 According to documents from the banking institution making the loan (Exhibit 1-1), the balance owed by the appellant stood as follows on December 31 for each of the years mentioned below: 1970 $12,500 and $9,500 1971 $10,000 1972 $10,000 1973 $ 8,200 1974 $ 8,400 3.8 In 1971 and 1972, the respondent allowed the interest paid in 1971 and 1972 as expenses in the appellant’s income calculation, but disallowed that paid in 1973 and 1974. ... All the information required by the respondent’s employees was provided. 4.3 Interest Counsel for the appellant cited the following cases:-Trans-Prairie Pipelines Ltd v MNR, [1970] CTC 537; 70 DTC 6351; — Lakeview Gardens Corporation v MNR, [1973] CTC 586; 73 DTC 5437; — MNR v Mid-West Abrasive Company of Canada Ltd, [1973] CTC 548; 73 DTC 5429; —Lyle A Meredith v Her Majesty the Queen, [1975] CTC 570; 75 DTC 5412. ...

The appellant’s shareholder’s loan account showed the following balances at the fiscal year end of Eddie Sargent Promotions Ltd viz, June 30, and at the calendar year end, for the years 1974 through 1979; Year June 30 December 31 1974 $ 49,287.00 $ 75,162.00 1975 87,860.00 109,380.00 1976 135,745.00 154,796.00 1977 83,533.00 113,049.00 1978 93,369.00 109,671.00 1979 88,785.00 7. ... See also: The Queen v Ogilvie (1898), 29 SCR 299: Thomson v Stikeman (1913), 29 OLR 146; affirmed 30 OLR 123 (CA); A R Williams Machinery Company Ltd v Moore & Murphy, [1926] S.C.R. 692; Paradis & Sons, Limited v Silesse, 1931,3 MPR 565 (NB); Netting v Hubley (1894), 26 NSR 497 (CA). ... The appellant relies completely on the Clayton Rule — namely, the allocation by the debtor as to which loan repayments are made to his creditors, in this case Eddie Sargent Promotions Ltd. ...

Votre tout dévoué, (Signature) Service des Cotisations /g P Pièce 1-3 FBI Foods Ltd. 1610 de Beauharnois Montréal, Québec HAN 1J5 le 12 septembre 1975 Directeur de l’impôt 305 Ouest Blvd Dorchester Montréal, Québec Re: M André Corriveau NAS 206-785-057 Faisant suite à votre requête du 29 Août veuillez trouver ci-dessous les informations concernant l’employé mentionné plus haut: — Date d’entrée à notre service: 1957 approximativement. — Titre: Vice-Président (Ventes-Relations Publiques). — Rémunération: Salaire Fixe. —Territoire Couvert: Province Québec, Ottawa Valley, Maritimes. — Une automobile lui était fournie par la Compagnie pour l’exercise de ses fonctions; les dépenses concernant l’automobile étaient à la charge de la Compagnie. ...

A portion of that letter is herein set out: Total expenses (as claimed) $3,000.67 Plus: Capital cost allowance 620.00 Total 3,620.67 Less personal portion 12212 2,802.18 15779 $ 818.49 15779 Less Reimbursement (not included in total income) $ 448.32 Allowable claim $ 370.17 Law The sections of the Act involved in the present case are paragraph 8(1)(h) and subsection 8(2) which read as follows: 8. ...