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The Queen, 2009 DTC 1170, 2009 TCC 357-- summary under Subsection 163(2) Summary Under Tax Topics- Income Tax Act- Section 163- Subsection 163(2) In deleting a penalty for gross negligence assessed on the taxpayer in connection with a net worth assessment, Webb, J. stated (at para. 53) that: "While [the taxpayer] was careless or neglectful, I am not satisfied that the Respondent has established that he had the requisite mens rea to justify the imposition of the penalty under subsection 163(2) of the Act. ...

Canada, 2003 FCA 446-- summary under Subsection 169(1) Summary Under Tax Topics- Excise Tax Act- Section 169- Subsection 169(1) legal costs of shareholder too remote GST on legal services supplied to the applicant to enable him and his company to obtain damages from a bank for wrongfully calling in a loan to the company, thereby forcing it out of business, was not eligible for an input tax credit given that the applicant had not established a connection, direct or indirect, between his purchase of the legal services and any ongoing supply of taxable services. ...

The Queen, 97 DTC 517 (TCC)-- summary under Computation of Profit Summary Under Tax Topics- Income Tax Act- Section 9- Computation of Profit cost of shares acquired in consideration for largely worthless loan obligation was nil In connection with the acquisition of the shares of a corporation ("LTM") by another corporation ("HSS") of which the taxpayer was the general manager, the taxpayer used the proceeds of a daylight loan to advance money to LTM, LTM loaned the same sum to its shareholders, the shareholders loaned the same sum to the taxpayer on a non-interest bearing basis with the principal not being due for approximately 100 years, and the taxpayer used the sum to pay off the daylight loan. ...

A loss realized by the taxpayer when it sold its portfolio of employee receivables to a bank in connection with "cleaning up" its balance sheet for a public offering was a capital loss. ...

A loss realized by the taxpayer when it sold its portfolio of employee receivables to a bank in connection with "cleaning up" its balance sheet for a public offering was a capital loss. ...

., 85 DTC 5014, [1985] 1 CTC 1 (FCTD), rev'd 89 DTC 5404 (FCA)-- summary under Loans and Financing Charges Summary Under Tax Topics- Income Tax Act- Section 18- Subsection 18(1)- Paragraph 18(1)(a)- Loans and Financing Charges The taxpayer guaranteed the obligations of its subsidiary ("MKH") and a subsidiary in turn of MKH ("Holdings") to pay interest on bank loans incurred in connection with a business acquisition by Holdings. ...

Profit- Partnership Interests After the Toronto Stock Exchange required the termination of what was styled as a loan agreement, but which in fact was a partnership agreement, under which five parties (the "Creditors") including the taxpayer received a share of the profits earned by another individual ("Purcell") in connection with his purchase of a seat on the Toronto Stock Exchange, they entered into an agreement which provided for the payment to the Creditors of the sum of $550,000, of which $300,000 was described as "the share of the Creditors in the net profits of the business for the fiscal year ending March 31, 1956". ...

The Queen, 2005 TCC 92-- summary under Illegality Summary Under Tax Topics- General Concepts- Illegality Act applied to what has occurred irrespective of legality In rejecting a submission that the trustee for a bankrupt company was not authorized by the Bankruptcy and Insolvency Act to engage in a "litigation support business" of providing assistance to most of the creditors in connection with their action sounding in negligence against company's former auditors, C&L for $800 million in damages, Archambault J stated (at paras. 33-4): [T]he Trustee, acting as agent for the Estate, was legally entitled to carry on the undertaking in question. … In any event, I would add that the Act is not to be applied to transactions that ought to have taken place, nor is it to be applied only to transactions that could be legally carried out. ...

Minister of National Revenue, 67 DTC 5277, [1967] CTC 396, [1968] S.C.R. 59-- summary under Paragraph (c) Summary Under Tax Topics- Income Tax Act- Section 66.1- Subsection 66.1(6)- Canadian exploration expense- Paragraph (c) An agreement between the taxpayer and its parent corporation was characterized as an agreement to pay for a contractual right to acquire an interest in lands on which exploration and drilling had taken place by paying expenses already incurred by the parent in connection therewith, rather than as an agreement under which the taxpayer itself incurred exploration or drilling costs in respect of lands in which it had an interest. ...

., 98 DTC 6604, [1999] 2 CTC 178 (FCA)-- summary under Paragraph 20(1)(c) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(c) guarantee re personal loan The taxpayer's husband borrowed $20,000, on the security of a mortgage on a rental property, to pay legal costs in connection with a civil suit unrelated to the rental property, with the taxpayer guaranteeing her husband's loan. ...