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According to an affidavit sworn by an officer of the CRA, the amended returns were considered to be an application under subsection 152(4.2) of the ITA because the normal reassessment period for those returns had expired. ...

., contends the respondent, unless the Minister had not had regard to all the circumstances of the employment (as required by subparagraph 3(2)(c)(ii) of the Act), has considered irrelevant factors, or has acted in contravention of some principle of law, the court may not interfere. ...

This subsection provides that:   (4) For the purposes of this section, (a) no amount paid or payable for travel on an airplane, train or bus shall be considered to be in respect of food, beverages or entertainment consumed or enjoyed while travelling thereon; and   (b) “entertainment” includes amusement and recreation ...

As this Court has repeatedly held, to be considered grossly disproportionate, the   sentence must be more than merely excessive. ...

The federal tax at issue in each year is as follows:   2001: $4,028.56 2002: $5,956.83 2003: NIL   [2]               In determining the Appellant’s tax liability for the 2001, 2002 and 2003 taxation years, the Minister of National Revenue (the “Minister”) assumed the following facts set out in paragraph 9 of the Amended Reply to the Notice of Appeal:   a)   in the 2001 and 2002 years, the appellant operated an auto repair business (the “auto repair business”) as a sole proprietorship; (admitted)   b)  in the 2003 year, the Appellant did not operate the auto repair business; (admitted)   c)   in the 2003 year, the Appellant’s son began to operate an auto repair business as a sole proprietorship at the same location where the Appellant had operated his auto repair business; (admitted)   d)   in the 2001, 2002 and 2003 years, the Appellant operated a business providing professional paralegal services (the “paralegal services business”); (admitted)   e)   the Appellant’s books and records were incomplete and inadequate to support the amount of reported revenues and all of the claimed and disallowed expenses of the auto repair business and the paralegal services business; (denied)   BUSINESS INCOME   Auto repair business – Unreported revenue   h)  the Appellant reported business income in the amounts of $108,000 and $48,191 for the 2001 and 2002 taxation years, respectively; (admitted)   i)  the Appellant’s total receipts from the auto repair business totaled (sic) $113,954.73 ($106,850 from safety testing and $7,104.73 from other repair work) and $84,252.49 ($76,000 from safety testing and $8,252.49 from other repair work) in the 2001 and 2002 years, respectively; (denied)   j)   the    total    receipts    from    the    auto    repair    business    included    GST Collected/Collectible; (admitted)   k)  the Appellant’s gross revenue was determined as follows:                                                                             2001                 2002 Receipts                                                       $113,955         $84,252 Less: GST Collected/Collectible (7%)              7,455              5,512    Gross revenue                                              $106,500         $78,741                                                                           (admitted)         (denied)                          l) the Appellant incorrectly reported his gross revenue from the auto repair business as follows: (denied)                                                                           2001                2002 Gross revenue                                              $106,500         $78,741 Less: Reported revenue                                  108,000           48,191 Unreported revenue (over-reported)                 (1,500)         $30,549   Auto Repairs Business – Disallowed Expenses   m) any legitimate business expenses incurred in the 2003 year were not expenses of any auto repair business operated by the Appellant but could be considered in determining the Appellant’s income from the paralegal business; (denied as all receipts for both businesses were provided)   Advertising   n) the Appellant claimed advertising expenses in the amount of $1,000 for the 2001 taxation year; (admitted)   o) the Appellant did not pay or incur advertising expenses in the 2001 taxation year; (denied)   Subcontracts   p) the Appellant claimed subcontract expenses in the amounts of $68,512 and $32,280 for the 2001 and 2002 years, respectively; (admitted)   q) the Appellant prepared and submitted to Canada Revenue Agency that T4A slips showing he had a total amount of $21,795 for the 2001 taxation year as employment income to others; (admitted)   r) the Appellant did not submit any T4A slips to Canada Revenue Agency indicating any amounts paid for the 2002 taxation year; (admitted)   s) the Appellant incurred subcontracting expenses in amounts no more than $21,795 and $NIL for the 2001 and 2002 taxation years, respectively; (denied because they were incurred and paid)   Business taxes, fees etc   t)  the Appellant claimed business taxes and other fees as expenses in the amounts of $19,061 and $150 for the 2001 and 2002 years, respectively; (admitted)   u) the Appellant incurred business taxes and other fees as expenses in amounts no more than $13,184 and $3,550 for the 2001 and 2002 taxation years, respectively; (denied)   v) the expenses incurred as business taxes and other fees were amounts paid to, or in respect of, the Ministry of Transportation Ontario; (admitted)   Insurance   w) the Appellant claimed insurance expenses in the amounts of $4,172 and $2,520 for the 2001 and 2002 years, respectively; (admitted)   x) the Appellant paid and incurred insurance expenses in amounts no more than $3,742 and $2,169 for the 2001 and 2002 taxation years, respectively; (denied)   Interest and bank charges   y) the Appellant claimed interest and bank charges as expenses in the amounts of $17,031 and $24,841 for the 2001 and 2002 years, respectively; (admitted)   z) the Appellant incurred bank charges as expenses in amounts no more than $423 and $298 for the 2001 and 2002 taxation years respectively; (admitted as interest expenses only)   aa) the Appellant did not incur any interest expenses in the 2001 and 2002 years for the purpose of gaining or producing business income; (denied)   Maintenance & Repairs   bb) the Appellant claimed and incurred maintenance and repairs expenses in the amounts of $4,638 in the 2001 taxation year; (admitted)   cc) the maintenance and repairs expenses incurred in the 2001 year were with respect of monthly amounts paid to Newcourt Financial Limited ($386.47*12); (admitted)   dd) the Appellant claimed maintenance and repairs expenses in the amounts of $1,989 in the 2002 taxation year; (admitted)   ee) the Appellant did not incur maintenance and repairs expenses in the 2002 taxation year; (denied)   ff) in addition to any amounts claimed as maintenance and repair expenses for the years under appeal, the Appellant also claimed and/or incurred various expenses under the categories of office expenses, supplies and parts for auto repairs in those years; (admitted)   Rent   gg) the Appellant claimed rent expenses in the amounts of $22,623 and $9,426 for the 2001 and 2002 taxation years, respectively; (denied with respect to the amount for 2002)   hh) the Appellant incurred rent expenses in the amounts of $21,144 and $23,343 for the 2001 and 2002 taxation years, respectively; (admitted)   ii) in addition to the rent expenses specified in paragraph 9hh) above, the Appellant also paid GST on the rent; (admitted)     Fuel Costs and Motor Vehicle Expenses   jj) the Appellant claimed fuel costs, and motor vehicle expenses as follows: (admitted)                                                               2001                 2002 Fuel costs                                        $1,655             $2,000 Motor vehicle expenses                           -                  2,938                                                             $1,655             $4,938   kk) for the 2001 and 2002 taxation years, the appellant did not use his vehicle 50% of the time for business purposes; (denied)   ll) the Appellant incurred motor vehicle expenses, including fuel costs, for the purposes of gaining or producing business income as follows: (denied)                                                               2001                 2002 Fuel costs                                        $1,000             $1,000 Other motor vehicle expenses           6,134                5,159 Total motor vehicle expenses            7,134               6,159 Personal usage (50%)                         50%                   50% Business usage (50%)                      $3,567             $3,080   Other Expenses   mm) in addition to the expense categories detailed above, the Appellant claimed and incurred the following expenses for the 2001 and 2002 taxation years: (admitted)     2001   2002     claimed incurred claimed incurred Meals and entertainment (50%) $ 250- $    500- Management and administration-- 175- Office expenses 5,270 1,121 1,000 4,370 Supplies 4,194 1,261 4,809- Telephone and utilities 2,929 4,121 2,300 5,427 Other expenses-- 640- Parts for auto repairs_____- 2,865____- 3,328   $12,643 $9,368 $9,424 $13,125   nn) the claimed auto repair business expenses which were disallowed: (denied)             i) were not paid or incurred, or if paid or incurred, were not paid or incurred for the purpose of gaining or producing income from employment or income from a business or property;   ii) were personal or living expenses of the Appellant; and/or   iii) were not reasonable under the circumstances.   ...

He did not conduct an audit, nor did he look at the deductibility of the expenses claimed; he considered only the business's bank account and did not take into account the cash transactions. ...

  [27]     I t is consonant with this scheme that any event that removes value from the fund should be considered and treated as a taxable event, as there has been no prior taxation of those sheltered funds. ...

If these arguments had been raised when commencement day cases were first being considered, they might have been persuasive if the scheme of the subject provisions had been interpreted to give consideration to cash flow variations in child support payments. ...

Himour, the payee, as the “Worker”):   (a)        the Appellant was in the business of blowing insulation into the attics of residential and commercial buildings; (b)        the Appellant obtained the contracts and the work; (c)        the Worker was hired as an insulation applicator and his duties included operating the blower hose in the attic of buildings; (d)        the Appellant also employed a hopper operator who emptied bags of insulation into the blower hopper; (e)        the Worker and the hopper operator worked as a crew; (f)         the Worker and the Appellant did not enter into a written agreement; (g)        the Worker performed his services in the field; (h)        the Worker was paid by piece work as follows:            - $.05 per square foot for new buildings,            - $.06 per square foot for existing buildings; (i)         the Worker also received a set wage of $16.00 per hour for travel time, for out-of-town jobs; (j)         the Appellant guaranteed the Worker a minimum monthly wage of $2,300.00; (k)        the Appellant determined the Worker’s pay rate; (l)         the Appellant determined the amount of work to be performed; (m)       the Worker did not bid for jobs; (n)        the Worker did not invoice the Appellant; (o)        the Appellant calculated the Worker’s earnings based on the work completed; (p)        the Appellant paid the Worker on a monthly basis with a mid-month advance; (q)        the Appellant also paid the Worker a year-end bonus; (r)        the Worker worked whatever hours were required to complete the assigned work; (s)        the Worker normally worked from 7:00AM to 6:00PM during the busiest period of fall and winter; (t)         the Worker worked shorter hours in summer; (u)        the Worker was under the direction and control of the Appellant; (v)        the Appellant scheduled the work; (w)       the Appellant assigned work to the Worker; (x)        the Worker did not have the power to accept or reject work; (y)        the Appellant instructed the Worker regarding the amount of insulation to install; (z)        the Worker informed the Appellant of any leave required; (aa)      the Worker could not hire his own helper or replace himself; (bb)      the Appellant supplied and paid all helpers and replacements; (cc)      the Appellant provided all of the tools and equipment required including a 5 ton truck with a blower system, 200 feet of hose, knives, coveralls, masks, safety glass and boots; (dd)      the coveralls provided by the Appellant had the Appellant’s business name on the back; (ee)      the Worker did not provide any tools or equipment; (ff)        the Appellant provided all of the supplies and materials required including the insulation; (gg)      the Worker did not incur any expenses in the performance of his duties; (hh)      the Worker was not liable for any damages; (ii)        the Worker did not have a chance of profit or risk of loss; (jj)        the intent of the Worker was employment; (kk)      the Appellant considered the hopper operator an employee; (ll)        the Worker did not carry his own liability insurance; (mm)    the Worker did not charge the Appellant GST, and (nn)      the Worker was not in business for himself while performing services for the Appellant ...

Justice Woods allowed the appeal on the basis that the Minster had not considered the discretionary provisions in subsections 122.62(2) and 220(2.1) of the Act. ...