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These letters were both dated June 27, 1978, one relating to Mohinder Singh Grewal and the other one relating to Rajinder Grewal and were in the following forms: Exhibit A-4 June 27, 1978 Revenue Canada Taxation Federal Building 19 Lisgar Street, South, SUDBURY, Ontario Dear Sirs: RE: Support payments received from my daughter and granddaughter, Rajinder Grewal This is to certify that we have received the following support payments: 1974 $1,185 (Can) 1975 1,290 1976 675 Signed: (Signature) Karnail Singh Pancych Stamp ATTESTED Gurbax Kaur (Signature) (Signature) Notary Public for States of Sher Singh Pb & UP 26/7/78 (Signature) Notary (Notary Public) Jullundur, (India) Exhibit A-5 June 27, 1978 Revenue Canada Taxation Federal Building 19 Lisgar Street South SUDBURY, Ontario Dear Sirs: RE: Support payments received from my son Mohinder Singh Grewal This is to certify that we have received the following support payments: 1973 $1,100 (Can) 1974 1,160 1975 1,640 1976 1,500 Signed: (Signature) R S Grewal (Signature) Stamp Mohinder Kaur Grewal (Signature) Notary Mohinder Grewal in cross-examination said that Punjab preferred cash and that he had difficulty in cashing Canadian money orders in India, although he was shown, by counsel for the respondent, three money orders from the Royal Bank, dated September 22, 1976, September 22, 197 and November 24, 197, purchased by Rajinder Grewal and payable to presumed dependants in India, namely, her father and her mother. ... I can give no weight to the two letters drawn by Cook & Abois purportedly being shown before a notary, without any attestation clause. ...

Prior to the pertinent taxation years, the appellant’s income tax returns were prepared by H & R Block. ... In 1972, the appellant’s net business income reported by H & R Block was $16,391.24 and the appellant had to pay additional tax in the amount of $1,526.53. ...

Those five creditors were Fonthill Lumber Limited (Fonthill), Beamsville Block Limited (Beams- ville), Peninsula Ready-Mix and Supplies Limited (Peninsula), Burn- stein Brick Limited (Burnstein) and Transit Mixed Concrete & Builders Supplies Limited (Transit). ... Apparently in the spring of 1975 the respondent was examining the financial statements of the appellant and, as a result of inquiries, received a memorandum on the letterhead of Smiley, Scott & Ralph, Chartered Accountants. ...

Dear Sir, This will confirm our discussion that in the late 1960’s when I. was the Manager of our Adelaide & Peter Branch you discussed with me your participation in a parcel of land located at the S/E corner of Passmore & McCowan, Scarborough. ...

It was agreed between the parties that an initial amount of $20,554.80 should be divided as follows: Plans and estimates $ 851.15 Carpentry (hung ceiling, movable partitions) 9,170.00 Plumbing 5,306.34 Electricity 3,950.45 Floor 1,276.86 $20,554.80 3.4. ... The Act and Comments Paragraphs 12(1)(a) and (b) of the Income Tax Act, RSC 1952, c 148 as amended, provide the basis for solving this problem: 12. (1) In computing income, no deduction shall be made in respect of (a) an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from property or a business of the taxpayer, (b) an outlay, loss or replacement of capital, a payment on account of capital or an allowance in respect of depreciation, obsolescence or depletion except as expressly permitted by this Part, A long line of authorities was cited by the counsel and representatives of the parties, especially by counsel for the respondent: Bar Realty Corporation v MNR, 31 Tax ABC 183; 63 DTC 220; Boyd Building Limited v MNR, 10 Tax ABC 422; 54 DTC 271; Twin Port Developments Limited v MNR, 24 Tax ABC 410; 60 DTC 402; Yorkton Motors Limited v MNR, 2 Tax ABC 144; 4 DTC 276; Graham and Vick Limited v MNR, 1 Tax ABC 343; 4 DTC 143; Better Plumbing Company Limited v MNR, 6 Tax ABC 177; 52 DTC 146; Glenco Investment Corporation v MNR, [1967] CTC 243; 67 DTC 5169; Thompson Construction (Chemong) Ltd v MNR, 15 Tax ABC 62; 56 DTC 204; [1957] CTC 155; 57 DTC 1114; MNR v Vancouver Tugboat Company Limited, [1957] CTC 178; 57 DTC 1126; M NR v Lu mor Interests Limited, [1959] CTC 520; 60 DTC 1001; MNR v Haddon Hall Realty Inc, [1961] CTC 509; 62 DTC 1001; British Columbia Electric Railway Company Limited v MNR, [1958] CTC 21; 58 DTC 1022; Montreal Light, Heat & Power Consolidated and Montreal Coke and Manufacturing Company v MNR, [1942] CTC 1; 2 DTC 535; Vallambrosa Rubber Co Ltd v Farmer (Surveyor of Taxes), 5 TC 529; Commissioners of Inland Revenue v Granite City Steamship Company, Limited, 13 TC 1; [1927] SC 705; British Insulated and Helsby Cables, Limited v Atherton, [1926] AC 205. ...

During cross-examination the appellant identified the following: Exhibit R-1—Letter dated December 19, 1972 from Touche Ross & Co, Chartered Accountants, to the appellant, dealing with the proposed purchase of the interest in Continental held by Duncalfe; Exhibit R-2—Offer to purchase relating to the above for $50,000 which, in addition to Duncalfe’s interest in Continental, also settled the financial arrangements between the two parties in several other businesses; Exhibit R-3—Notes to the financial statements for the year ended December 31, 1973; Exhibit R-4—Report by the bank on Continental’s application for credit dated January 16, 1973; Exhibit R-5—Two pages of journal entries for the year 1973 from the accounting records of Continental, and a copy of a cheque from Continental to the appellant dated January 12, 1973. ... The accounting entry for the $16,500, as shown on Exhibit R-5, was: Dec. 31 Dr Administrative Salaries $16,500.00 Cr Shareholder’s loan — N Ans $16,500.00 To set up 1973 Bonus payable to N Ans as at Dec 31/73. ...

If that were the meaning, and if it had been intended to bring about a result different from that reached by the Victorian Court, ‘++ would have been easy to say “income received (or received by the tax- payer) as dividends from any company..”. ... For Leonard Holdings Corp to be considered as a personal corporation, paragraph 68(1)(b) requires that % of its income be derived from dividends. ...

This is supported by the wording on Exhibit R-1 submitted by the respondent, dated December 30, 1968, under the section headed “Manager’s Remarks”: “... for taxation purposes, our customers are required to repay share holders’ loans of $55,000 to Baileys Restaurants Ltd.” ... Branch Enciosures: Forms 516A, B, C and D, Banker’s Report — Baileys Restaurants Ltd Manager’s Remarks Further to our letters of December 19th, for taxation purposes, our customers are required to repay shareholders’ loans of $55,000 to Baileys Restaurants Ltd, a company controlled by L John Bailey, by December 31st, 1968 and the following steps have been arranged:— December 31st, 1968 (1) The Baileys pay Baileys Restaurants Ltd $55,000 to retire advances to shareholders. ...

Quite frankly, I am more impressed with the evidence produced by Mr Bossin (of William Eisenberg & Company, Chartered Accountants, who are the auditors now—as of this year—for this company), and in the letter dated April 2, 1973, that he obviously prepared for the purposes of this appeal, in which he shows that, in 1972, out of a total of 552 shipments, 162 were purchased from mills which have a flat rate of federal sales tax. ... To me there has been demonstrated, through the evidence of Mr Sereny and of Mr Bossin, and particularly through the evidence contained in the letter of April 2, 1973 by William Eisenberg & Company, that if income tax advantage entered into this picture at all, and it probably did, it was not one of the main factors that determined that this was how the two companies should carry on their business. ...

In his reply to notice of appeal the Minister substantially admitted the correctness of the factual data as presented by the appellant but contended that: the appellant was at all times material hereto a partner in the firm of William Eisenberg & Company, Chartered Accountants; [that] pursuant to the agreement mentioned in paragraph 1 herein, Kosoy purchased on February 1, 1969, 3500 shares of United Bata Limited as an investment and sold in February, 1970, after a two for one split on 2500 of those shares the resulting 6,000 shares in United Bata Limited; [that] the appellant has never been a dealer in securities; [that] the purchase and sale of shares by the appellant and his associates was not a business within the meaning of the Income Tax Act; [and that] the loss incurred by the appellant on the disposition of the shares was a loss on capital account. ... Livingston et al., 11 T.C. 538, at page 542: “... whether the operations involved (in the transactions of the company) are of the same kind, and carried on in the same way, as those which are characteristic of ordinary trading in the line of business in which the venture was made.” ...