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The word “or” in subsection 6(6), where it occurs in the words “... the value of, or an allowance.. gives in my opinion a meaning separate from income tax allowance and can only mean the value of outlays or expenses incurred to earn income. ...

Minister of National Revenue, [1975] C.T.C. 2310, 75 D.T.C. 239 A J Frost: 1 This is an appeal from income tax assessments dated April 13, 1973 in respect of appellant's 1968, 1969, 1970 and 1971 taxation years. 2 By the said assessments, each dated June 26, 1973, the following deductions claimed on account of interest paid on borrowed money were disallowed: 1968 $ 18.50 1969 510.90 1970 548.21 1971 478.95 This disallowance should be considered in connection with the fact that appellant had not reported the following mortgage interest income in his taxable income: 1968 $1,540.00 1969 1,517.00 1970 1,492.00 1971 1,465.00 3 On December 15, 1967 the appellant sold his principal residence in Breslau, Ontario and took back as part of the sale proceeds a mortgage in the amount of $21,000. ...

In filing his tax returns he showed his total income to be as follows for the following taxation years: Tax Year Total income as filed 1971 $ 2,361.50 1972 922.57 1973 2,596.08 1974 4,160.61 1975 16,127.58 1976 17,859.45 The respondent, on the other hand, increased the appellant’s total income by the following amounts for the following years: Tax Year Increase in total income 1971 $10,210.14 1972 $ 3,514.55 1973 $31,535.59 1974 $11,085.55 1975 decrease (503.90) 1976 decrease (529.39) The seed operation also included the cleaning plant and there was a vast amount of equipment owned and used by the appellant. ... Through the years the appellant availed himself of the accounting services of H & R Block and used their working forms to complete information necessary for them to file his returns plus handing them cancelled cheques and whatever receipts he felt like. ...

In reviewing the accounts, that of Sunderland, Preston, Simard & Associates Ltd and that of Mr Raymond Berthiaume (Maxi-Bec Enterprises Ltd) stand out at $7,500 and $6,500 respectively. A preliminary study entitled “Parc Fleur de Lucerne’’, allegedly prepared by Sunderland, Preston, Simard & Associates Ltd, was filed as Exhibit A-4. ... It is of interest to note that Mr Sunderland of Sunderland, Prestion Simard & Associates Ltd, who allegedly prepared the study (Exhibit A-4) was also the town planner for the Township of Lucerne. ...

Rather the amount shown for both of those assets was “—” (nil). Following objection, the accountant for the appellant, Mr Wickman, chartered accountant of the Price Waterhouse firm in Edmonton (who only became the appellant’s accountant after the reassessments in question) interviewed an appeals officer in connection with the assessments and received from her a “net worth” statement for the same years, 1973 to 1976, which showed amounts for inventory and accounts receivable opening as $26,000 and $2,000 respectively rather than nil. ... There is no doubt that the assessment purported to be on a net worth basis and, as previously stated, that it was so made, but in addition the schedule forming the basis for the assessment was attached to the Reply to the Notice of Appeal and it was captioned as follows: “A Dziwenka — Net Worth”. ... This he could have done, but in court it might be easily rebutted by an appellant if the appellant has not been told the basis of fact and law upon which the assessment was based — Johnston v MNR, [1948] S.C.R. 486; [1948] CTC 195; 3 DTC 1182. ...

Mr Hebenton stated, and this was confirmed by Mr Cushman, that the $800,000 offer to sell was apportioned as follows: $450,000 land and improvements $275,000 livestock $ 75,000 equipment Gorecki’s offer, excluding sales commission, on the basis of the above valuation of cattle and equipment, was $400,000 for the real estate and improvements. ... The 19 sales involve 14 difference ranches ranging in size from 595 acres to 27,000 acres the average size being approx. 9800 ac. deeded @ 2440 ac. leased land. ... The 19 sales have been analysed to give indications of value on the following unit basis: (A) per Acre of Deeded Land (B) per Acres of Total Deeded & Leased Land (C) per Animal Unit (D) Assessment Ratio After making some adjustments, he stated that, in his opinion, the fair market value as of August 24, 1969 was $625,000. ...

The major assets of the estate were; a) shares of Cochrane Dunlop Hardware Limited valued at $1,925,000; b) a $1,400,000 Royal Bank of Canada two year term deposit taken out on July 17. 1970, maturing on July 18, 1972 and bearing interest at 7% % per annum (called the Term Deposit); c) a note receivable from Francis Cochrane in the amount of $135,000, payable on demand with interest at the rate of 1% per annum; and d) sundry shares and securities in other corporations which in the aggregate were valued at less than $300,000. 5. ... Date Amount of Principal Source of Funds May 25, 1972 $ 5,007.88 Proceeds of a a term deposit held by Estate June 6, 1972 407.77 Proceeds of Sale of New Insco Shares July 18, 1972 1,423,084.35 Principal and Interest on matured Term Deposit July 26, 1972 50,000.00 Part payment by Francis Cochrane on demand note August 16, 1972 1,100.00 Dividends received November 16, 1972 1,100.00 Dividends received November 27, 1972 32,300.00 Part payment by Francis Cochrane on demand note 11. The excess of interest income earned by retaining the Term Deposit for the 56 day period from May 24, 1972 to maturity over the interest expense incurred in respect of the demand loan was $1,983, computed as follows: Interest income earned on Term Deposit $16,646 Interest expense on demand loan 14,663 Excess Earned interest Income $ 1,983 in addition, by arranging the loan which enabled the Executors to retain the Term Deposit until maturity $25,582 was added to the amount of interest income earned, during the period that the Term Deposit was held. 12. ...

In that year the appellant sold to the City of Ottawa his property situated at 281-283 York Street, Ottawa for the sum of $19,000 — the said property having been purchased for $5,400 in the year 1944. ... When the property was sold in 1968 the appellant considered the total sale price of $19,000 to be solely in respect of the land whereas the respondent made the following apportionment: (a) $ 7,220 for land (b) 11,780 for buildings $19,000 One of the respondent’s main allegations was that the appellant in 1968 could have received a gross rental income from the buildings of almost $3,000. ... For the years under appeal, even though Lot 335 was held by the appellant personally, it had become unproductive vacant land, whereas Lot 351 was not held by the appellant personally but by a corporation — the Bonjour Development Corporation which had to pay the carrying charges. ...

This opinion is based on Clergue v H H Vivian & Company, decided by the Supreme Court of Canada in 1909 (41 SCR 607). ... The case cited by counsel for the respondent (Clergue v Vivian & Co), where it was held that the word “or” was synonymous with “and”, cannot apply here. ... In the English text this is clear: “... and was not supported by his wife....” ...

The other $100,000 was paid with the funds of the trust. 3.8 In its income tax returns the appellant trust claimed the deductibility of the following amounts of interest paid to the Bank of Montreal, with respect to the above-mentioned loans: 1970 $110,114 1971 $ 9,802 1972 $ 1,432 3.9 it was proven that the only loans made from 1968 to 1972 were those made at the Bank of Montreal and described in paragraphs 3.6 and 3.7.., 3.10 According to Mr Ludwick (referring to the 1970 financial statement) later in 1970, probably in the fall, the trust had sold 128,675 shares of Gulf Oil Canada Limited for $1,966,255. ...