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Interestingly, the Department's implicit statement in Interpretation Bulletin IT-99R3 that a retiring allowance is not employment income runs contrary to certain statements made by it elsewhere. [38] It should be noted that where in connection with a wrongful dismissal action the employer, as part of the settlement, reimburses the employee for his legal expenses, the Department takes the position that income tax should be withheld at source on the reimbursement, as well as on the retiring allowance. ...

Law — Cases- Analysis 4.01 Law The main provision of the Income Tax Act that is involved in this case is paragraph 8(1)(f), which reads as follows: 8. (1) In computing a taxpayer's income for a taxation year from an office or employment, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto: (f) where the taxpayer was employed in the year in connection with the selling of property or negotiating of contracts for his employer, and (i) under the contract of employment was required to pay his own expenses, (ii) was ordinarily required to carry on the duties of his employment away from his employer's place of business, (iii) was remunerated in whole or part by commissions or other similar amounts fixed by reference to the volume of the sales made or the contracts negotiated, and (iv) was not in receipt of an allowance for travelling expenses in respect of the taxation year that was, by virtue of subparagraph 6(1)(b)(v), not included in computing his income, amounts expended by him in the year for the purpose of earning the income from the employment (not exceeding the commissions or other similar amounts fixed as aforesaid received by him in the year) to the extent that such amounts were not (v) outlays, losses or replacements of capital or payments on account of capital, except as described in paragraph (j) or (vi) outlays or expenses that would, by virtue of paragraph 18(1)(l), not be deductible in computing the taxpayer's income for the year if the employment were a business carried on by him; 4.02 Cases The cases cited by counsel for the respondent are the following: 1. ...

In general, the Department will not challenge the reasonableness of salaries and bonuses paid to the principal shareholders-managers of a corporation when (a) the general practice of the corporation is to distribute the profits of the company to its shareholders-managers in the form of bonuses or additional Salaries; or (b) the company has adopted a policy of declaring bonuses to the shareholders to remunerate them for the profits the company has earned that are, in fact, attributable to the special know-how, connections, or entrepreneurial skills of the shareholders. ...

Accordingly, it applies only to those provisions of the Act which relate to the specific term, "tax payable by a taxpayer”, or to, "tax payable” in connection with the assessment of income tax. ...

There need not be any connection between farming and the "other source of income" for a taxpayer's chief source of income to be a combination of the two sources; however, the meaning of “combination” in section 31 does not mean the simple addition of any two sources of income for any taxpayer (Moldowan, op cit, page 314; D.T.C. 5216). ...

The only connection was their co-ownership. Consequently, I find that the profit resulting from the transactions in this appeal is a capital gain. 4.03.9 Penalty I am of the opinion that the penalty should be maintained for the income resulting from the taxable capital gains for the following reasons. ...

For the sole purpose of the issues on this appeal and not as an admission to be used against the parties hereto on any other occasion, for any other purpose in connection with the reassessment appealed from, or in favour of any person other than the parties hereto, it is agreed that: 1. ...

In this connection I would point out that it might be argued that on that basis ($40,000 per machine) REF would be contributing $200,000 (U.S.) to the Corporation, whereas Grandis and Volta together were only contributing $125,000 (U.S.), but were receiving 50 per cent of the Corporation. ...

Achille Houde was not a shareholder of Napoléon Brochu Inc. and had no other connection of any kind with it. 3.13 In filing his tax return for 1977, the appellant proceeded on the assumption that it was not associated with Napoléon Brochu Inc. and claimed the small business deduction provided for in subsection 125(1) of the Income Tax Act. ...

In my view this reasoning is equally applicable to payments made to a person “in connection with” an office or employment. ...