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In the Healy and Ronchka cases, as in the instant appeal, the determination of the “employer’s place of business” must be made before any other elements of subparagraph 8(1)(h)(i) of the Act can be considered. ... Having concluded for purposes of this appeal that Aylmer and not Toronto is the “employer’s place of business” within the meaning of subparagraph 8(1)(h)(i) of the Act, the duites of the appellant’s employment must also be considered before determining whether the appellant was “ordinarily required to carry out the duties of his employment away from the ‘employer’s place of business’ or in different places”. ... Indeed, in Konvey’s confirmation letter in which the apapellant’s duties have been set out, travelling on company business away from the “employer’s place of business” is considered as exceptional and must be cleared with the project manager located in Aylmer. ...

The work sheet for the period of 1971, 1972 and 1973 and the appellant’s income for each of those years was considered under three aspects: the income from land sales reported in the appellant’s tax returns; income, (assessed as a result of the review of the appellant’s land transactions) from the sale of lots calculated on an accrual basis and the sale of lots computed on a cash basis. ... The appellant, in examination-in-chief and in cross-examination, confirmed that he considered that a sale was made only when cash was received. ... Although a taxpayer, who is considered to have wilfully or fraudulently made misrepresentation in his return, may find himself involved in the application of other sections of the Income Tax Act, such an eventuality has no bearing on the Minister’s right to reassess beyond the four-year limit if “any misrepresentation” has been established by the Minister. ...

At the hearing, both the appellant and the respondent adduced evidence in order to satisfy what was considered to be their respective burden of proof: the appellant, to establish the facts proving that the Minister’s assumptions on which he based his net worth assessment are wrong, subsection 152(8) of the Act, Johnston v MNR, [1948] CTC 195; [1948] S.C.R. 486; 3 DTC 1182; the respondent to establish those facts which would bring the appellant under subsection 163(2) of the Act and justify the imposition of penalties (subsection 163(3) of the Act). ... Since these additional amounts were not considered in the Minister’s original estimates, it is reasonable that they should be added to the appellant’s personal living expenses for 1972-1973. ... The respondent contends that for the appellant to succeed in deducting losses, he must prove that the negative discrepancies stemmed from either allowable business losses, allowable property income losses or allowable capital losses which had not been considered in the net worth. ...

Mr Holmes, the appellant, being a farmer to the core, could not tolerate the bureaucratic intransigency of the local Health Unit and gave up any attempts to satisfy what he considered unreasonable terms and conditions and, in particular, their suggestion in breaking up his registered subdivision into two-acre lots. Fortunately, the regulations to the Environmental Protection Act (Ontario) were revised in April 1974, whereby the conditions on the taxpayer’s building lots were considered acceptable for the installation of conventional private sewage systems. ... The appellant called as an expert witness, Dr D W Egerton, who gave what I considered a full and excellent appraisal report, and whose qualifications as an appraiser as well as his appraisal report were, in my opinion, considerably superior to that provided by Mr Grant, the appraiser for the Crown. ...

In his testimony Mr Hershoran, CA, accountant of the appellant, states: One clarification and this does not bear directly, probably the term, bad debt that was used on the statement was a misnomer and this may answer an earlier question that was asked by the lawyers, questioning why we wrote off the 14,000 one year and then advanced 11,000 the next year, as well and that is because really we considered it more as an expense outlay to finance perhaps operating Cannon Mines. ... According to the accountant, Mr Hershoran, CA, the shares were considered as part of the appellant’s inventory. ... It is possible that the same amount be considered, at the same time as an expense deductible in the year, and as an account receivable which can be received later with interest. ...

They break down for each year as follows: 1961: $ 3,540 1962: 3,540 1963: 3,540 1964: 3,540 1965: 3,920 1966: 4,305 1967: 4,855 1968: 4,855 1969: 4,855 1970: 4,855 1971: 6,015 $47,820 (Exhibit A-1) In establishing these figures the accountant, Mr Doré, relied on the mileage by the appellants’ automobiles in the years in question (Transcript, p 74): Mr Jean-Guy Papillon Mileage Mileage Hudson (1953) from 1961 to 1965 94,000 Chrysler (1965) from 1965 to 1971 127,000 Chrysler (1971) 1971 15,000 236,000 Paul Papillon Mileage Mileage Continental 1960 to 1964 57,000 Continental 1966 to 1970 45,000 Continental 1971 9,500 111,500 The average cost per mile was considered to be: $0.12 from 1961 to 1965; $0.15 from 1966 to 1970; $0.18 for 1971. 3.14 The appellants admitted that their automobiles had not been used exclusively for partnership purposes. ... On the other hand, a number of secondary factors tend to establish that most of the additional expenses claimed had already been considered by the accountant who prepared the financial statements of the partnership for each of the years in question. 4.3.2.1 The Capital Account Statement The “Capital Account Statement” for each of the years includes the following items: “Auto expenses—personal use” and “Auto depreciation-personal use” (paragraph 3.14). ... It was considered that about 90% of the total mileage was done for partnership purposes; this seems excessive. ...

It is alleged that personal advances were used in reference to financing such projected feature films because they are considered by lending institutions as being too unproductive. ... It seems clear from the evidence that in the business of producing feature films, that outlays for the purchase of novels, scripts, distribution rights, etc cannot be considered as capital assets, not only because their “enduring quality’’ is uncertain but more importantly and irrespective of the nature which might normally be attributed to these items, the use made of them by the producer is that of stock-in-trade and are commercial items, necessary in the exercise of the business of feature film production. ... Since the appellant was not in the business of loaning money even the interest received cannot be considered as income from the appellant’s business of producing films within the meaning of paragraph 12(1)(a) of the Income Tax Act, SC 1970-71-72, c 63, as amended. ...

Consequently, the price paid for the franchise, being part of the lease of the premises, must be considered as income. ... (C) Sale of franchise: income of property As subsidiary proposition, the respondent suggested that the payment received for the franchise be considered income from property. ... It is only under exceptional circumstances that it must be considered income, especially after the above considerations. ...

This direction is dated March 18, 1975 and reads as follows: Having regard to the facts and recommendations set forth in the attached memorandum dated March 5, 1975 and having considered the representation contained in a letter dated January 18, 1974 from W H J Tretiak, CA and the letters of Covertite Ltd dated October 16, 1974, October 31, 1974 and December 2, 1974, I hereby direct under the provisions of subsection 247(2) of the Income Tax Act that the following companies be deemed to be associated with each other in the 1972 taxation year. ... Mrs Warner or her counsellor could not ignore the fiscal consequences of the creation of the new corporation; 6) The fact the new corporation used the same name. 6.3.4 Principle to be considered First Test Is the separate existence of the two corporations solely for the purpose of carrying on the business of those corporations in the most effective manner? ... From another point of view, the fact that Mrs Warner is the wife of the main shareholder of the appellant company and the manner in which she borrowed money are considered as secondary facts by the Board when compared with the others above. ...

(Page 8): The usual basis of valuation where revenues are being considered is either to consider normalized maintainable revenue as being an average or weighted average based on past experience or, in the case of a significantly rising trend, to consider only the latest figures available prior to the valuation date. ... In our calculations, we have considered only the performance of the year ended May 31, 1973 for our assessment in view of the trend over the past years; we consider any more historical performance to be inappropriate in these circumstances for the assessment of maintainable revenues. ... To enable a realistic comparison to be made with risk-free or minor risk investments, we considered risks applicable to the income under review. ...