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The relevant statutory provisions of Sections 5 and 6, reduced to material skeleton form, are as follows: Section 3—‘ 1 Income ’ ’ means the annual net profit... directly or indirectly received by a person... from any... business... whether derived from sources within Canada or elsewhere... ...

See. 5 s.s. 1(a) of the Income War Tax Act states that "‘in- come’’ as defined in the Act shall for the purposes of the Act be subject to certain exemptions and deductions and one was "‘such reasonable amount as the Minister, in his discretion, may allow for depreciation. ‘ ‘ The facts here seem to indicate that the Minister based his valuation of fixed assets for the ascertainment of ‘‘depreciation’’ largely upon the cost of the same to the vendor company from which the appellant company acquired the same, and which basis was adopted by the appellant itself for two years. ...

The former provides as follows: "119.(2) Every person who has failed to comply with or contravened subsection (1) of section 44, subsection (5) of section 112, section 114 or section 115 is guilty of an offence and, in addition to any penalty otherwise provided is liable on summary conviction to (a) a fine of not less than $200 and not exceeding $10,000, or (b) both the fine described in paragraph (a) and imprisonment for a term not exceeding 6 months. ‘ ‘ Section 92(9) of the Income War Tax Act contains analogous provisions except that there is no provision for a minimum fine. ...

I do not think that the words in paragraph (h) — “grant, subsidy or other assistance from a... public authority ’ ’ — have any application to an ordinary business contract negotiated by both parties to the contract for business reasons. ... Styles (1887), 2 T.C. 239 and John Smith & Son v. Moore (1921), 12 T.C. 266.1 should have thought that that might be so even where the contract arose by virtue of the current operations of the business and was not acquired by virtue of a capital expenditure.* [9] If the contract was a capital asset, such part, if any, of what was received as may properly be regarded as being merely the consideration for its surrender was presumably not received on revenue account. ... If he is right in contending that there is no such capital cost, obviously he succeeds without relying on either Section 12(2) or Section 137 (1). 2 +Some small parts continued to operate on 25 cycle power, but these were too remote from the appellant’s plant to have any effect on the situation in this case. 3 * There has been no suggestion that there is any difference between “cost” and “capital cost” in the circumstances of this case. ...

It was also provided that if the contract was terminated prior to its expiry date the ‘‘earned fee ’ ‘ therefor should be computed on the total remuneration earned by all employees during its currency. ... At page 45, he said: " " The profits on the containers are not, as I conceive, a reserve properly called; and the loss of these profits, on the returns of the containers, is not merely a contingency but a certainty. ... Justice Brandeis, in delivering the opinion of the Supreme Court of the United States, said, at page 199: " " The overriding commissions were gross income of the year in which they were receivable. ...

Salomon & Co., [1897] A.C. 22 in many other cases the courts have lifted the corporate veil so as to come to a correct conclusion in law on the facts of the matters before the courts. ... Whether a benefit received by a taxpayer was received by him ‘ ‘ in respect of, in the course of, or by virtue of the office or employment’’ must be considered in relation to the particular circumstances in which it was received. ... In this sense the words ‘‘ personal gift’’ are used in contradistinction to remuneration. ...

In support of that statement he cited Principles of Accounting by Finney (1951 Edition), an American authority on taxation which he said was generally accepted in Canada and in which at page 375 it states: ‘ ‘ Realization Basis: For some items in the inventory, such as obsolete or repossessed merchandise, a purchase or reproduction market value may not be determinable. ... Reference may also be made to Whimster & Co. v. Commissioners of Inland Revenue, 12 T.C. 813 at 825. ... II, pp. 540-1, reference is made to Reg. 103, a portion of which is quoted as follows: ‘ ‘... ...

By an agreement dated April 30, 1956 Islington Park Limited agreed to sell ‘‘Juliana Allonsius (as trustee for a company to be incorporated) ” a parcel of land in Etobicoke Township consisting of 70.377 acres for $703,770 payable in stated payments extending over a period ending on August 20, 1961. ... Allonsius, which was admitted to have been made ‘ in agreement with ’ ’ the respondent contained the following with respect to the Lempicki deposit: ‘ ‘ I, JULIANA ALLONSIUS, hereby acknowledge that attached hereto are unsigned copies of assignments of agreements from Belmont Heights Limited to Ridge Realty Limited and of an agreement between Murray Gruson and myself, together with Harry Evans and Irving Howard, all of which are dated October 7th, 1957. ... The Minister’s position on this issue was that the $125,000 was required to be brought in at the full amount by Section 85B (l)(b) which provides that: “85B (1) In computing the income of a taxpayer for a taxation year, (b) every amount receivable in respect of property sold or services rendered in the course of the business in the year shall be included notwithstanding that the amount is not receivable until a subsequent year unless the method adopted by the taxpayer for computing income from the business and accepted for the purpose of this Part does not require him to include any amount receivable in computing his income for a taxation year unless it has been received in the year;’’ It is, I think, plain that if the $125,000 was an ‘ amount receivable” within the meaning of this subsection at any time in the respondent’s 1958 taxation year it was properly included at its full face amount. ...

O’Brien, Home, Hall & Nolan] instituted legal action before the Superior Court of the Province of Quebec against the Attorney General of Canada [Case No. ... Vide p. 24 of the official report: Ip. 160] ‘ ‘ It satisfies, I think, the criterion laid down by Lord Cave in British Insulated v. ... Goldsmith Smelting & Refining Co., [1954] S.C.R. 55 at 57; [1954] C.T.C. 28 at 31. ...

.: « STATEMENT OF FACTS AGREED UPON BETWEEN COUNSEL "1. That the Appellant was in 1927 and is now presently resident in Canada. ... That the Appellant had an interest in a partnership— the partnership fiscal period ending the 30th June, 1927. * " 5. ... Commissioner of Taxation (1923) 26 W.A.L.R. 96, it was held " that the income tax, or tax paid under the Dividend Duties Act, 1902, is not expenditure for the purpose of earning receipts. ...