Search - connection

15 After a review of all the facts of this appeal, and not underestimating in the least Mr Bean's emotional stress during his wife's tragic illness and her ultimate death, I cannot come to the conclusion that the appellant has proven to the satisfaction of the Board that Crystal Manor was built as a long-term investment in connection with Mrs Bean's illness. ...

(See Exhibit I-1 filed on behalf of the respondent, which is a letter dated January 4, 1973 from the appellant's employer to the Minister of National Revenue.) 4 The appellant treated these reimbursements in accordance with the provisions of subparagraph 5(1)(b)(v) of the Income Tax Act, RSC 1952, c 148, which deals with income from an office or employment and reads as follows: 5. (1) Income for a taxation year from an office or employment is the salary, wages and other remuneration, including gratuities, received by the taxpayer in the year, plus (b) all amounts received by him for the year as an allowance for personal or living expenses or as an allowance for any other purpose except (v) reasonable allowances for travelling expenses received by an employee from his employer in respect of a period when he was employed in connection with the selling of property or negotiating of contracts for his employer, The appellant, upon receiving reimbursement for the expenses which he incurred, treated said expenses in accordance with the above-mentioned paragraphs of subsection 5(1). 5 Exhibit I-2 filed on behalf of the respondent, a letter dated February 27, 1973 is a further letter by the appellant's employer to the Minister of National Revenue, setting out the circumstances which gave rise to this appeal. ...

Nevertheless the parents' connection with the company is not before me nor is the salary paid to them. 5 The business of the appellant company has been completely in the mortgage field, or perhaps the mortgage-affiliated field is a better term by which to define it. ...

Incidentally, in this connection, DeWaal does not expressly indicate how he received the $10,000 and for what purpose, nor does he treat it in his evidence as severance pay. 17 Viewing the evidence in its totality, I have concluded with some considerable hesitation but on the balance of probabilities that DeWaal did in fact receive the benefit of the $10,000 by way of cancellation of debt, the same being offset as severance pay or bonus. ...

The buildings were used predominantly in connection with the rental agreement and therefore it is our submission on behalf of our client that the particular assets should be classed as rental assets and not as farming assets as submitted in the assessment. ...

During the year under appeal, the appellant claimed total payments of $2,439 and, in filing his income tax return, detailed the payments as follows: STATEMENT OF ALIMONY PAID IN 1974 Paid to Florence Penner, Melville, Sask—For the Months of Jan, Feb, Mar, Apl, May, June, July and Aug 1974 8 x 100 $800 4 x 50 for months Sept, Oct, Nov, and Dec 1974 200 Paid directly to daughter Wendy, attending school in Edmonton, Alta for months of Jan, Feb, Mar, Apl, May, June and July 1974— 7 x 60 420 Feb 24, 1974 190 April 11, 1974 229 May 27, 1974 250 5 x 7/0 in Aug, Sept, Oct, Nov and Dec 1974 350 TOTAL ALIMONY PAID IN 1974 $2.439 Daughter Wendy residing at 10405, 108 Ave, Edmonton The amounts deleted by the Minister were in connection with payments made to or on behalf of Wendy, and consisted of: 7 x $20 per month $140 February 24, 1974 190 April 11, 1974 229 May 27, 1974 250 5 x $30 per month 150 $959 Contentions The position of the appellant as outlined in the Notice of Appeal was: Mr Penner considered it, his responsibility to provide maintenance and support for his daughters, Virginia and Wendy and therefore it was the intention of the parties for the agreement to mean more than what it strictly Says, the meaning being that Mr Penner would make his own arrangements as to the maintenance and support directly with his daughters without interference with his wife and that he would take into consideration his responsibility for the maintenance and support. ...

In connection with the Palm Springs situation, counsel took the position that the purpose of the acquisition was for business, and this should not be diluted merely because the taxpayer used the facility for short periods personally —it was available for business clients, staff, etc., at all times. ...

Provided, however, on the resale of such shares, in the event of default, then any surplus over the sum then due from the purchaser or purchasers of such shares under subparagraph (a) hereof, after deducting all costs and expenses incurred in connection with obtaining delivery of such shares and the resale of same, shall be paid to the said purchaser or purchasers of such shares. 6. In connection with the Company’s operations it is agreed by and between the Shareholders as follows: (a) Any party resigning from or being dismissed from the Company (other than dismissal for cause) shall receive, by way of severance pay in complete settlement of all claims he may have against the Company, the amount of the book value of his shares as of date of resignation or dismissal and such amount shall be paid without interest in the manner set forth in sub-paragraph 3(b) hereof; any party dismissed for cause shall have no claim or cause of action against the Company or the remaining Shareholders save and except the payment provided for in paragraph 2(iii) hereof. ... In connection with the Company’s operations it is agreed by and between the Shareholders as follows: (c) In the event of disability preventing normal duties, a Shareholder shall be entitled to the difference between any disability insurance income provided by the Company and his normal salary for a maximum period of six (6) months. ...

The Respondent submits that the income derived by the Appellant from the lease of certain lands is not income incidental to certain farming activities, but rather is income which is derived from a separate and distinct source of income pursuant to Section 4 of the Income Tax Act, SC 1970-71-72 with respect to the 1972 taxation year, and Section 139(1)(a) of the Income Tax Act, RSC 1952, Chapter 148 in connection with the 1971 taxation year. 5. The Respondent states that the disallowance of certain deductions claimed by the Appellant as expenses in the 1971 and 1972 taxation years, was proper on the basis the farming activities were not carried on in the manner of a business carried on for a profit, or with a reasonable expectation of a profit; and on the ground that since these expenses were incurred by the Appellant in his participation in farming activities of a sporting, or hobby nature for his own benefit, they were personal or living expenses within the meaning of Subsection 139(1), and therefore were not deductible under Section 12 of the Income Tax Act, 1952, Chapter 148 as amended, in connection with the 1971 taxation year or, within the meaning of Subsection 248(1), and therefore were not deductible under Paragraph 18(1)(h) of the Income Tax Act, SC 1970-71-72, Chapter 63 as amended. ... The purpose for which the lands were leased and the type of work executed in connection with the leased lands were quite different from the appellant’s farming activities and thus the rental income derived therefrom cannot be considered as an integral part of the appellant’s farm income. ...

Unfortunate as the circumstances may have been, I only can regard him as being the author of his own difficulty in this connection and hold, therefore, that the substantial discrepancies resulting from his calculations were such as to merit the imposition of a penalty by the respondent. ... The word “offence” is used above in connection with the term “gross negligence” in the sense of a breach of law, duty, propriety or misdemeanour, which are several of the meanings of the word “offence” contained in the Shorter Oxford English Dictionary, but I hasten to add that under the Act there is, undoubtedly, a very wide gap indeed between ordinary negligence and “gross negligence”. ... The expression “human error” is ordinarily used in connection with a situation where a person has done something in error or mistakenly, for example, where he has committed an error or mistake in judgment in an emergency, but that expression is not appropriate, in my view, to the present situation where there has, obviously, been a continuing pattern of carelessness or negligence on the part of the appellant commencing in or about the year 1964. ...