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The amount of $37,277 is considered by the Minister as being income from a business or from a venture in the nature of trade. 3 The issue to be determined by the Board, of course, is whether the $37,277 is taxable income or non-taxable damages for loss of potential income. 4 The appellant company was represented at the hearing by Mr Ernest W Kitzul, its president and principal shareholder. ...

Contentions It was the position of the appellant that the receipts should be considered as capital grants because: —they were given in the public interest, to ensure veterinary services were available to certain livestock owners; —they were not computed by reference to specific expenses or specific income deficiency of the recipient. ...

Argument Since the point at issue is fundamental and the argument from each side relatively brief, the essence of it is quoted here to portray as accurately as possible the positions of the parties: For the appellant: I want to bring to the Board’s attention the fact that the pre-1972 Tax Act, that is the old Act, where the beneficiary or the remaining spouse by way of an estate becomes deceased, the remainder would obtain the assets of the estate at fair market value and the estate itself would be considered not to have disposed of any of the assets at any gain to the trust. ...

Although this letter can in no way be considered as conclusive evidence that a partnership agreement existed in the 1973 taxation year when the subject lands were sold, it does, however, add to what might be described as a series of more than circumstantial evidence which indicate to'me that a partnership agreement did exist and that the appellant was a member of the partnership which disposed of the subject lands in 1973 through St Lucie Groves Investments Limited, incorporated for that, purpose. ...

The Board also considered the other paragraphs of section 8, but none of them can permit the appellant to. deduct any expenses in addition to those he has already deducted under paragraph 8(1)(a): (a) Employment expense deduction. — a single amount in respect of all offices and employments of the taxpayer, equal to the lesser of $150 and 3% of the aggregate of (i) his incomes for the year from all offices and employments (other than the office of a corporation director) before making any deduction under this section, and (ii) all amounts included in computing his income for the year by virtue of paragraphs 56(1)(m) and (o); Thus in applying the Income Tax Act for the years in question, the Board has no choice but to uphold the assessments issued by the respondent. 5. ...

The Board thinks it is equitable to value the personal goodwill of the appellant at least at 40%. 4.2.3 Another element must also be considered: the minority of the common shares owned by the appellant. ...

Argument The following comments by the agent for the appellant would indicate that farming had always been considered on a joint basis, but the sale of the portion of farm “B” in 1975 had made the problem relevant and immediate:... maybe a year or two years actually generated a taxable profit of a few thousand dollars, but most years it’s very close to border-line. ...

Because of the above mentioned reasons I believe that this agreement should be set aside and considered null and void. ...

Numerous cases were cited by counsel before the Federal Court— Trial Division, and considered by Dubinsky, DJ. ...

Some of the factors that will be considered when determining whether the substance of a transaction is a lease or sale are listed below. ... (4) Does the term of the lease correspond substantially to the estimated useful life of the property with the lessee obligated to pay costs such as taxes, insurance, and maintenance which are usually considered incidental to ownership? ...