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 Statement of Income and Expenses from which his claim arose is as follows: Income—Forage Crops $ 359_. Expenses—Salaries and Wages $. 363 Interest (Farm Portion only) 2,904 Taxes (Except income taxes) 314 Machinery Expense: —Gasoline and Oil 33 —Repairs 36 Veterinary Fees, Medicine, Breeding Fees 35 Feed and Straw 64 Containers and Twine 72 Custom Work 407 Accounting Fees and Office Expense 60 Clearing or Levelling Land 25 Tile Drainage 59 Small Hardware 29 Fees 5 $4,406 Capital Cost Allowance 403 Total Expenses $4,809 Total Income $ 359 Less Total Expenses 4,809 Excess of Income Over Expenses (4,450) Restricted farm loss—firsts'*. $2,500 50% ‘of balance of $1,950— 9:75 Claimed in 1974 $3,475 Contentions Basically, the position of the taxpayer was that he could not be expected to start operations in 1973 and make a profit in 1974. ...

He says in his evidence that the general economic conditions of Calgary, in that particular area, were good, that the city was expanding in that direction and the future of the restaurant was bright, particularly — and I emphasize this because of the result that I eventually hope to come to — on account of the approach of the two brothers as compared to the approach of the father to the operation of the business. ... There is no question whatsoever from the evidence of Mr Pringle — and I can draw inferences from that evidence — that the Seto brothers really made this business take off. ... In doing so, I have come to a figure of $9,000 each, which, when rounded off with calculations. and allowances for the 21% rate of tax, has brought me to the conclusion — notwithstanding that my arithmetic may be slightly out in some portions — that a proper valuation of goodwill for this business should be rounded off at $26,000 rather than the $55,000 chosen in the first instance. ...

This amount, detailed in a letter dated May 30,1977 and sent to the appellant by State Farm Mutual Automobile Insurance Company, is as follows: State Farm Mutual State Farm State Farm Automobile Life Life Fire & Casualty $2,942.06 $628.50 $1,643.53 Termination Payments 1976 300.00 Portion of Incentive & Thrift 1,420.85 1.78 119.15 Earnings from Dec/75 $4,662.91 $630.28 $1,762.68 Paid 1976 $4,662.91 $ 630.28 $1,762.58 $7,055.87 1976 Total $5,214.09 1975 Total $1,541.78 Held ’75 Paid 1976 $6.755.87 1976 Inc & Thrift 300.00 $7,055.87 T4A Amount 3.05 In the same letter, the writer informs the appellant:... ... It is logical for you to assume that in fact this would be what you may refer to as pension, however, the amount of money being paid as Termination Payments is based on service compensation for the Automobile Company and commissions of the Fire & Casualty Company and for the Life Company will be an amount equal to servicing payments. 3.06 The agent’s agreement was not filed as evidence. 3.07 In filing his 1974 income tax return, Mr Walman described himself, at page 1, as self-employed. ...

There is no dispute as to the following facts: — The property is situate in Ontario. — In 1964 David and Diane Opie sold the property to Emerald Isle Motel Limited (“Emerald Isle”). — In 1965 Emerald Isle mortgaged the property to Crédit Foncier Franco- Canadien (“Crédit Foncier”) in the amount of $132,000. ... (This is the mortgage in question.) — In July 1970 Emerald Isle sold the said property to Black Prince Holdings Limited (“Black Prince”). ... The Court was not using a provincial statute to define a word in a federal Act, but rather was determining what the business was — a proprietorship or a partnership — and once deciding that, applied the federal law. ...

In the said reassessment the Minister of National Revenue made the following adjustments to declared income: Net income as reported $ 4,26 Add: (1) Interest expense not allowable 76,344.31 (2) Professional fees not allowable 2,460.00 Revised taxable income $78'808'57 Upon Notice of Objection duly signed and filed the Minister confirmed the assessment on the ground (a) that bank interest of $76,344.31 was not interest on borrowed money used for the purpose of earning income, and (b) that professional fees of $2,460 claimed as a deduction from income were not incurred in the course of borrowing money used for the purpose of earning income. The appellant’s profit and loss statement for the year ended June 30, 1963, which includes only seven months of operations, contained in summary and amended form the following: Income (mainly rents) $240,883.08 Expenses (mainly general, office and administrative) $155,006.02 Professional fees re: borrowed money expenses 2,460.00 157,466.02 Operating Profit 83,417.06 Interest expense: To Bank of Montreal $ 20,422.34 To Great West Life 55,921.97 To Shareholders’ loans being 6% on $200,000 July 1/62 — Jan. 31/63 (215 days) 7,068.49 83,412.80 Profit before taxes 4.26 Provision for income taxes.89 Profit for year $3.37 The appellant company owned and operated an office building in Vancouver and, during June 1962, became engaged in a series of financial transactions, pursuant to which it assumed certain legal obligations to pay interest to money-lenders. ... These loans and advances were reflected on the appellant company’s current bank account with the Bank of Montreal as follows: June 27, 1962 — Opening Balance Nil Deposit by shareholders $ 200,000.00 Deposit (loan Bank of Montreal) 500,000.00 Deposit 1,500,000.00 TOTAL $2,200.000.00 These borrowings were to pay off certain existing indebtedness and thereby make fully available certain unencumbered assets as security for the new loans. ...

However, to simply grant such extensions and imply that all applications — where the breach is but a few days — will be granted, is to make a mockery of the period of limitations set down in the Act. ...

The opening balance sheet of Services Farmico Inc, dated June 26,1973, reads: Assets Cash $2,000 Share Capital Authorized 50,000 no par value shares Issued and Fully Paid 200 shares $2,000 A year later, on May 31, 1974, the balance sheet of Services Farmico Inc read as follows: Assets Current assets Bank $115,723.54 Royalties receivable 65,307.24 181,030.78 Capital assets—at cost Accumulated Cost depreciation Equipment $28,554.54 $ 5,710.90 22,843.64 Intangible assets Good will 665,000.00 Other assets Setting-up costs $ 1,101.14 Deposit on purchase of a sign 2,000.00 Improvements to leased premises— at cost less accumulated depreciation 3,753.29 6,854.43 $875.728.85 Liabilities Current liabilities Accounts and expenses payable $ 24,373.91 Federal and provincial income taxes 125,676.04 Other taxes and charges 934.23 150,984.18 600,000.00 Owed to directors Shareholders’ Equity Capital stock Authorized: 50,000 no-par ordinary shares Issued and paid up: 200 ordinary shares $ 2,000.00 Undistributed profits 122,744.67 124,744.67 For the board of directors $875,728.85 For the purposes of this appeal and in order to arrive at a fair valuation of the assets in question, it should be noted that the principal source of the income of Services Farmico Inc consisted of royalties paid by pharmacies which, through a franchise, obtained the right to use the trade name “Pharmacies Jean Coutu Enrg” or “Pharmacies Escompte Jean Coutu”. ... These would include, inter alia: —Use of trade name; —counsel, advice and assistance relating to the organization of, and planning for, the pharmacies; — possibility of purchasing from franchisor; — publicity, advertising and promotion; — initial assistance and guidance during start-up period. ... The financial statement prepared by Mr Wise reads as follows: SCHEDULE II SERVICES FARMICO INC VALUATION OF INTANGIBLE ASSET (RIGHT TO RECEIVE INCOME UNDER CONTRACTS) Results of 4 operating pharmacies Franchisable Pharmacies Total sales Franchisable Net Net 31/5/70 1 $1,302,519 $ 241,065 $1,061,454 31/5/71 1 Yr /smos 2,748,846 357,027 2,391,819 31/5/72 3 5,053,179 1,013,493 3,039,686 31/5/73 3 Yrs 1/9 mos 8,524,211 1,710,345 6,813,866 Sales for 4 pharmacies on 1973 basis each $1,817,031 @ 4% (4 pharmacies) 290,725 Advertising (See page 9) $125,000 Other expenses (See page 10) 100,000 225,000 Pre tax income 65,725 Tax 48% 31,548 After tax income $ 34,177 Multiple 3% 4 /2 Range (rounded) $119,600 $ 153,800 Having already concluded that the intangible assets acquired by Services Farmico Inc on June 26, 1973 constituted eligible capital property, I accept Mr Wise’s valuation, and I find that the market value of these assets on the date of their acquisition was $150,000; this also fixes the amount of the eligible capital expense which the appellant incurred to acquire these assets at this moment. the appeal is accordingly allowed in part and the matter referred back to the respondent for re-assessment, taking into consideration that the amount of the eligible capital expense is $150,000, and that paragraphs 14(5)(b) and 20(1)(b) of the Income Tax Act, SC 1970-71-72, c 63, as amended, must be applied. ...

In its 1967 taxation year, the Minister reversed the position taken by his officials in the earlier taxation years from 1959 to 1966 — as he clearly had the right to do — and assessed the appellant on the basis that it is not in the business of farming within the meaning of paragraph 139(1)(p) of the Act and, therefore, is not entitled to report its income in accordance with the provisions of subsection 85F(1) of the Act. ... In that connection, on the basis of the evidence before me in this matter, there should be a finding — and I so find — that the taxpayer was not at any relevant time in the business of preparing and selling books. ... It measures 10% inches by 8% inches and is only about ¥% of an inch thick when tightly compressed. ...

Contentions For the appellant: — The difference between the amount allocated by the appellant to the cost of restaurant equipment, namely the sum of $16,000 with respect to the purchase of the cafeteria business in 1970 and the total purchase price, namely the sum of $75,000 was an acquisition by the appellant of a leasehold interest. — Any portion of the $55,000 of the proceeds of sale, receivable by the appellant with respect to the sale of the cafeteria business, not allocated as a disposition of restaurant equipment by the appellant should have been allocated as a disposition of the appellant’s leasehold interest and not as a disposition of goodwill. — The appellant did not claim any capital cost allowance with respect to his acquisition of a leasehold interest in 1970 and is entitled to claim a terminal loss on the disposition of the said interest in 1974. — There was no goodwill attached to and forming part of the cafeteria business. For the respondent: — The appellant never considered or included the alleged value of the leasehold interest in the allocation of the acquisition price. — The appellant was subsequently unable to establish that any part of the sale price was attributable to the value of the leasehold interest. — The leasehold interest was correctly valuated at nil, according to the well-established valuation principles. — The amount of $11,875 was correctly added to the appellant’s income as the profit derived from the sale of goodwill, pursuant and in accordance with subsection 14(1) of the new Income Tax Act, and subsection 21(1) of the Income Tax Application Rules. ... The results of the appellant’s operations for 1970 (9 months) showed a profit of $8,429,79, for the full year 1971 — $12,145.95, for 1972 — $7,946.63, and for 1973 — $9,562.44. ...

The amount in dispute arose from the filing with the Minister of a Form T2049 “Agreement In Respect Of Unpaid Remuneration”, authorized under subsection 78(3) of the Act, by a company, TH & S Electric Limited (“TH & S”), for the 1973 taxation year. ... The appellant stated in his oral testimony that previous to that acquisition, he had no association with TH & S in any way. ... Further, when that testimony is accepted, the rationale and explanations provided by Yale & Partners (supra) are irrelevant and misleading. ...