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The appellant considered this to be a third response to the Report, and because the Government never made this third response, the Court of Québec judges were not entitled to a salary increase ... R., 2005 FCA 104, [2005] 2 C.T.C. 183, 2005 DTC 5201, Sharlow J.A. of the Federal Court of Appeal stated as follows: For the purposes of Part I of the Income Tax Act, the answer to that question requires the application of a judge-made rule, sometimes called the “ surrogatum principle”, by which the tax treatment of a payment of damages or a settlement payment is considered to be the same as the tax treatment of whatever the payment is intended to replace. 7.         ...

That lump-sum annual expense was calculated after the fact; (u)       The appellant uses the management fees as a method of sharing and distributing its profits to the two related companies, which have different fiscal year‑end dates from the appellant (income tax carry-over); (v)       The management fee payment is so high that the appellant reported business losses (for tax purposes); (w)     All of the corporation’s profits were converted into management fees at the very end of the fiscal year, which is unreasonable in the circumstances; (x)       No reasonable businessman with only his company’s commercial interests in mind would conclude a management agreement, as in this file, with an arm’s length person with whom no service delivery was clearly pre-established, setting out the payment of the company’s entire profits as management fees; (y)       For the 2010 fiscal year, $950,000 in management fees was accepted because services were provided by the related companies; (z)       For the 2009 fiscal year, the Minister accepted $950,000 as management fee expenses, but considered that the remaining $820,000 was unreasonable (in comparison with 2010) considering the services provided, the time needed to provide the services and the fees that could have been paid to receive similar services (the fair market value of the services provided); (aa)    The $950,000 allowed by the Minister for the 2009 fiscal year is more than reasonable compared to the salaries and bonuses paid for the 2007 fiscal year, namely, $430,000 (despite $3 million less in sales); (bb)   Accordingly, the Minister was correct in fact and in law to disallow the amount of $41,000 in ITCs claimed on the unreasonable expenses of $820,000; (cc)    Consequently, the appellant owes the Minister the amount of adjustments to its net reported tax for the period at issue plus interest; [5]              For the purposes of the Income Tax Act, the management fees paid by 6051944 Canada Inc. in respect of the 2009 taxation year were accepted by the Canada Revenue Agency as deductible expenses in computing its income, and thus, as reasonable expenses in the circumstances. [6]              Germain Pigeon testified at the hearing. ... Analysis [19]         The issue is to determine whether the appellant claimed and obtained, in calculating its reported net tax for the period at issue, ITCs in the amount of $41,000, in excess, in error or without entitlement, following the Minister’s disallowing of $820,000 in management fees considered unreasonable. [20]         Subsection 170(2) of the ETA provides that the consumption or use of services of such quality, nature or cost must be reasonable in the circumstances, having regard to the nature of the commercial activities of the appellant, and the amount must be calculated on consideration for the service that is reasonable in the circumstances. ...

. •         Lack of vigilance in making the assessments. [4]              First, the legal basis of the assessments is not in dispute except that the appellants argued that they provided services with a value far in excess of the amounts transferred (dividends) that gave rise to the assessments. [5]              The relevance of the argument in relation to the consideration is unfounded; indeed, the case law has established that a dividend cannot be considered a consideration equivalent to salary. In other words, a dividend cannot be considered a valid consideration to challenge an assessment made under section 160 of the ITA. [6]              On the advice of their accountant, they chose the dividend formula instead of the salary formula for the consideration of the work performed on behalf and for the benefit of the Company that made the transfer. [7]              The issue of how dividends must be addressed in a transfer of property subject to section 160 of the ITA is unequivocal and unambiguous. ...

Canada, 2004 FCA 127, the Federal Court of Appeal considered whether the defence of error of law could be relied upon to avoid the imposition of a penalty under the Excise Tax Act. ... Summary and Costs [42]         As stated, for these reasons the Minister has met her onus, has established misrepresentation attributable to neglect, and has not otherwise acknowledged that an uninformed mistake of law related to section 7 stock option benefits warrants cancellation or remission of the reassessments in this appeal. [43]         Since misrepresentation on account of neglect has been determined to have occurred in respect of both the 2006 and 2007 tax returns, the Timely Assessment Issue is moot and shall not be considered. [44]         The Respondent is awarded costs on a party-and-party basis in accordance with the Tariff, subject to the right of either party to make written submissions before this Court on that matter within 30 days of the date of this Judgment. ...

QCH made computers available to all of its workers (both those it considered employees and those it considered independent contractors) in its main office but Ms. ...

The appellant’s claim is neither plausible nor reasonable. [6]              The auditor therefore considered that the cash deposits were unreported income including taxes. ... Conclusion [25]         Having considered all the evidence, I am not persuaded that the appellant has met its burden of showing that the Minister’s assumptions, on which the Minister proceeded in making the assessment, are without merit in fact or in law. [26]         For these reasons, the appeal is dismissed. ...

GAAR [16]         The Respondent asserts that the Appellant entered into a series of transactions that could “ reasonably be considered to have resulted directly or indirectly in an [sic] misuse of subsections 37(6.1), 111(5), 111(5.1), 127(9) and 127(9.1), and paragraphs 37(1)(h) and 111(1)(a) or an abuse having regard to the provisions of the Act read as a whole relating to the transfer of losses and control ” and thus that GAAR should apply to deny the tax benefits claimed by the Appellant [14]. At paragraph 18 of the Reply, the Respondent highlights the existence of certain policies and provisions of the Act which she says have been misused or abused: (a)                 the general policy of the Act is to prohibit the transfer of losses between arm’s length parties, subject to certain express and permissive exceptions; (b)                subsection 111(5) (and also the related provisions in respect of the Tax Attributes under subsections 111(4), 111(5.1), 37(6.1) and 127(9.1) of the Act) is an anti-avoidance provision designed to prevent arm’s length loss trading from an unrelated business and represents an exception to the general policy of the Act; (c)                subsection 256(8) is an anti-avoidance provision designed to ensure the acquisition of control rules apply where effective control of a corporation was been acquired; and (d)               subsection 251(5)(b) is one of a number of sections of the Act which attempts to ensure that a person with effective control of a corporation will be considered to control the corporation. [17]         The Appellant asserts that none of the policies highlighted by the Respondent is applicable to its situation. ...

That conclusion provides a very strong indication that only one writer is involved and the possibility that another writer may be considered is negligible. ... Binette concluded that there is a high likelihood of a match, that is, there is a good indication that only one writer is involved, and the possibility that another writer may be considered is negligible. ...

., who perform the same type of work as that performed by the workers and the majority of whom are also part‑time employees, are considered by their employer as employees. [35]         According to counsel for the appellants, Mr. ... However, control over the results of the work to be performed under a contract was exercised by the retailer’s representative onsite. [40]         The workers’ intention to be considered self‑employed is not a relevant factor in this case because the relationships with Mr.  ...

Rabinovitch’s desire to minimize his client’s taxes and the uncertainty in tax law during 1982, I am of the view that the retroactive adjustments to accounts is not a valid tax planning scheme, and I must therefore dismiss this appeal. [25]         It is possible to lose a tax benefit if an operation is considered incomplete or ineffective because a person neglected to comply with indispensible legal formalities. ... Zaddoug should have considered the historic data in this case. The rent billed and reported by the appellants was never $117,600 in all the previous years. ...