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None of Bonjour’s shareholders received any cash consideration. This transaction was an arm’s length transaction, the purchasers being unknown to the vendors. ... Thus the prime consideration, where there is a dispute about a system of accounting is, in the first place, whether it is appropriate to the business to which it is applied and tells the truth about the taxpayer’s income position and, if that condition is satisfied, whether there is any prohibition in the governing income tax law against its use.... ...

On his part, and in consideration of the plaintiff putting up this money, Milton Sorokin undertook to arrange for financing by loans secured by first and second mortgages, to arrange for the construction of the apartment building and, on completion, to take over the management of the building and ensure that it was occupied to the extent that the rental revenue would meet all commitments. ... If it is considered as an investment, the principal amount of which was to be recouped from the proceeds of the project then the consideration for making that investment is counter-balanced by Milton Sorokin’s contribution of his experience in arranging for the financing and construction of the building and in all other respects the parties to the arrangement also considered their respective contributions as equal. ...

Thus, apart entirely from any other consideration, I have the view that these defendants cannot succeed in these appeals, carrying as they do the onus of disproving the validity of the Minister’s assessments. ... A matter of a few weeks later, they optioned the corner lots to Pacific Petroleums for commercial purposes, they gave another option to Bridge City Construction for commercial purposes, and finally, after a partial rezoning was accomplished, they sold a portion of the property for commercial purposes. it seems clear to me, after a consideration of all of the above facts and circumstances, that the defendants had in their mind at the moment of purchase the possibility of reselling as an operating motivation for the acquisition of subject property. in my view, all of the circumstances surrounding this transaction together with the subsequent conduct of the defendants negate the expressed intentions of the defendants in their evidence at trial. ...

Mr Darius testified that early in 1960 the company had 10 unsold houses on its hands, and he noticed that the company was not making sales; as of March in that year it had assets of $225,000 to $230,000, mostly of land and houses, with liabilities of about $182,000; and by June he decided to get out of the building business; at that time his wife was still owed about $30,000 on her loan, in respect of which the company had given her a promissory note for $29,000 (Exhibit 3), and when he told her of his intention to get out of the business she asked what about her loan; he told her the company would, in partial payment of the loan, pay her $15,000 in cash, which was all the money it could then make available, and would also transfer to her the company’s equity in the undivided half interest in the 42 acres of land; his objective was to protect her, for the company’s prospects did not look good, and if it could not meet its commitments to pay the unpaid balance of the purchase price of the land as payments thereon became due it could lose the land, whereas Mrs Darius had financial means to meet such payments, and he thought it would be safer for her to have title to the land rather than to have only the company’s promissory note; the company could not raise money to repay the loan by mortgaging the land, for it had only an undivided half interest in it; he did not consider having the company make an assignment of its equity in the land as security for repayment of the loan, rather than the absolute transfer that was eventually made; he talked to the company’s solicitor and accountant in respect of the plan, and there was no mention of income tax considerations; the solicitor drew up the necessary documents; his wife was aware of the difficulty of selling the land, as there was no market for it at the time, but he hoped it could be sold, and she agreed to what he had suggested and didn’t question his judgment, and she told him to sell the land for her; he thereupon proceeded to ask several real estate agents to try to obtain offers to purchase it, the intention being to sell it as quickly as possible, but the realtors found no purchasers and received no offers until 1962; each offer, when it was received, was communicated to his wife, and each was accepted without seeking a higher price; he left it to the realtors to obtain offers; he didn’t, advise his wife what to do with the land or whether to accept any of the offers that came; his wife knew very little about the company’s business dealings, but she helped some with its books and office work; she was a shareholder because the law required that a company. have at least two shareholders; when the land was purchased in 1956 it was farm property outside the city limits; it continued thereafter unimproved, but by 1960 the city had extended its limits and moved about a mile closer to the property and later it became more saleable, particularly after the city’s replotting; prior to its transfer to Mrs Darius the land was inventory in the company’s business; the company was wound up in 1969. ... Counsel for Mrs Darius submitted that her intention in accepting a transfer of the company’s undivided one-half interest in the 42 acres of land was to better her position in respect of her loan to the company, and that the evidence is consistent only with that intention: a consideration in that acceptance was that in 1960 the company’s prospects were not good and if title to the land remained in the company and it were unable to meet its commitments to pay the remainder of the purchase price of the land it might lose the land, and Mrs Darius would be left with only a promissory note of the company which it might not be able to pay; it was she who, having accepted the transfer of the land, made the decision to sell it and to seek offers of purchase, in order to recoup what was owing on her loan and to pay what remained owing on the land; the situation in 1960 was that no one was interested in buying the block of land, there was the possibility that it could only be sold at a loss, and profit was not the motivation for selling it; in later years each offer of purchase was accepted without effort to obtain a higher price; nothing was done on the land to improve it; the exchange for other lots came about by reason of the City’s plotting, which was beyond the plaintiff’s control; as to her interest in the company, she was a shareholder with her husband only because the law required two shareholders, and she gave the loan to assist him financially in the business of building houses for resale, but she took little part in it and knew little about the company’s dealings in selling houses and land; at no time was she personally in the business of trading in land, and any profits realized by her in respect of this land were not income from a business, but were capital gains. ...

The estates under consideration there were unadministered estates. The Privy Council in the Livingston case considered the rights of persons having an interest in an administered estate and an unadministered estate. ... Kellock, J said at pages 468-9 [110-12]: There is a further consideration which confirms the view to which I have come, as above expressed. ...

Recapture of depreciation was not a consideration. While buildings were quite costly, raw land in West Berlin was cheap. ... This modest increase was dictated by considerations of the economic position of the class of tenants, a desire to minimize tenant turnover and avoid the attendant expenses, the perceived competitive position and a preference for a very low vacancy rate over higher rents as the way to maximize gross rental income. in the actual result, during the 11 months the plaintiff owned Fleming- don Park, net rental income exceeded the pre-purchase projection by $44,582. ...

According to the appellants, this also should have been taken into consideration, either by way of a reserve for doubtful accounts or as a write-off. ... I can find, therefore, that ample consideration existed in the minds of the appellants at the time of the signing of Exhibit R-2 that this was a means of disposing of their interest in a continuing partnership without having to put up any of their own funds. ...

After consideration of the evidence, I have no difficulty in concluding that subject acquisitions of land were speculations and that the partners were in the business of buying and selling land. ... For a proper consideration of said Articles, it is also necessary to have reference to the following definitions referred to in the Protocol to the Convention: 3. ...

Statements of farming income and expenses (Exhibit 2) contained in the appellant’s income tax returns show the following items of gross income from the Aldonna Ranch: Year 1964 Hay 1400.00 1400.00 1965 Cattle 619.28 Breeding Fees 50.00 669.28 669.28 1966 Horses, Sheep, other 150.00 Breeding Fees 145.50 Custom Work 125.00 Show Prizes 34.00 454.50 454.50 1967 Breeding Fees 372.00 372.00 1968 Horses, Sheep, other 250.00 Breeding Fees 100.00 Patronage Payments 224.70 574.70 574.70 1969 Hay 67.50 Horses, Sheep, other 850.00 Patronage Payments 86.34 1003.84 1003.84 1970 Cattle 350.00 Horses, Sheep, other 100.00 Breeding Fees 50.00 Eggs 254.00,,. h Rent Farm Cabin 420.00 1174.00 1174.00 1971 Cattle 3514.64 Horses, Sheep, other Donkey 100.00 Breeding Fees 200.00 Eggs 195.00 Rent Farm Cabin 480.00 4449.64 4449.64 Even taking into consideration that during the early years of developing sales of horses would not be substantial, considerably more than what is shown would be expected during the 7-year period (1965. to 1971 both inclusive) if the farming activity were commercial in nature or if it were meant to be commercial in nature. ... Furthermore, taking into consideration all the relevant facts I conclude that from the very outset in 1963 there could have been no reasonable expectation of profits. ...

The consideration is the payment of certain periodic installments called premiums (b). ... However, the proportion of the sums payable by an insurer, corresponding to the premiums paid by the beneficiary thereof personally and actually borne by him, as compared to the total amount of premiums, and the portion of the said sums which the beneficiary or assignee thereof has otherwise acquired for full valuable consideration shall not be subject to the duties imposed by this act nor included in the aggregate value. ...