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The justification for such treatment was that in 1942 when the old Treaty was entered into, resource properties were considered to be capital assets. ... At the time the new Treaty was entered into, resource properties were clearly not considered to be capital assets for Canadian tax purposes and therefore the claim for treating them as capital assets can no longer be justified as was formerly the case under the old Treaty. ...

As the cost of the equipment is recovered in the billings, a requirement to capitalize job costs would result in a mis-matching of costs and revenues. b) The equipment required to complete a project is a critical element in determining construction costs and the nature of the business should be considered in determining whether equipment purchase costs are income or capital expenditures. c) The cost of the equipment should be inventoried as a contract cost together with all other job costs. d) Office equipment has a small dollar value (often less than $250 per item) and is not controlled through equipment numbers. ... In the above situation, it is our opinion that the Act requires a departure from GAAP in that it specifically restricts the deduction of capital expenditures, defines what is considered to be capital property and provides specific rules for calculating capital cost allowance deductions related to capital property. 3) The taxpayer's statement that the equipment is a critical element in determining construction costs does not justify special treatment as the costs of equipment are of critical importance in determining the cost of products produced in many businesses and those businesses receive no special treatment. 4) In our opinion, the cost of the equipment should not be inventoried and charged as a contract cost. ...

To be considered as being in respect of SR & ED (carried on in Canada) for purposes of subsection 37(1), an expenditure must be one which is described in either clause 37(7)(c)(ii)(A) or (B) of the Act. ... Where SR & ED results in a saleable product, the costs of producing that product may be considered to be other than SR & ED expenditures. ...

Foreign branches of Canadian companies are considered non-resident; while Canadian branches of foreign companies are considered resident for this purpose. ...

You have asked us to base our reply on the assumption that (a) the conditions set out in Interpretation Bulletin IT-221R2 will be satisfied such that, as of the date of departure, the employee will be considered a non-resident of Canada for the typically two to four year period they are assigned elsewhere, and (b) throughout the period of time in-the year of departure that he is considered a non-resident of Canada, the employee carries on business in Canada. ...

.- Comments in paragraph 5 of IT 145A state that the dyeing of cloth can be considered the processing of goods. As acid and stone washing would be in the same category as dyeing cloth it is unlikely that the activities could be considered a service rather than processing.- Paragraph 9 of IT l47A2 states that the manufacturer or processor of the goods need not necessarily be the vendor of the goods.- The facts in the Dixie X-Ray Associates Limited case can be distinguished from that of the taxpayer in that the case involved taxpayers who were providing a service and no physical goods were sold or leased. ln 24(1) case, clearly necessarily is the major activity and the finished products are sold by 24(1)- A legal opinion received by Specialty Rulings Directorate June 21, 1984 supports the above opinions in that it states that 23 We trust that our comments will be of assistance. ...

Where the dependent coverage is optional and the premiums in respect of the employee and dependent coverage are accounted for separately (as though under separate policies), we are prepared to view the coverage in respect of dependents as not being coverage under a policy which would otherwise be considered a "group term life insurance policy". That is, a policy which provides for insurance in respect of employees would not be disqualified from being considered a "group term life insurance policy" only because there is a provision in the policy for optional dependent coverage. ...

In the Court of Appeal's view, the contract of employment was considered terminated. ... In our view, this award of interest is not to be considered as taxable due to the policy set forth in the enclosed press release relating to pre-judgment interest awarded in 1984. ...

Our understanding of situation 2 is as follows: XXXX In respect of this situation you pose the following questions: (i) Is the amount paid to the employee considered to be income from employment and paid to the employee, and taxable in the hands of the employee, in 1988? ... In answer to (i) above, an amount received by the employees in respect of retroactive wages would be considered to be income from employment of the employees for the year in which it was received pursuant to subsection 5(1) of the Act. ...

For the purposes of this letter it will be assumed that the manufacturing and selling of each product are so interconnected and interdependent that they cannot be considered to be separate businesses. ... The foregoing comments should not be interpreted as implying that it would necessarily be our view in any actual situation similar to the above hypothetical situation that the manufacturing and selling of any products would, for the purposes of subparagraph 111(5)(a)(ii) of the Act, be considered to be one business. ...