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If this last argument is considered as a whole, it can be stated that the preponderance of evidence at first glance indicates that this was a normal periodic allowance paid by the appellant to his wife. ...

As a result of an audit of the books of the Star of India Restaurant Inc, it was found that the deposits exceeded gross sales by $37,233.44 in 1976 and $22,000 in 1977 for a total amount of $59,233.44, considered by the Minister as unreported income. ...

In so reassessing the Appellant’s income tax liability, the Respondent made, inter alia, the following assumptions of fact: (a) The Appellant employed three eligible workers pursuant to an Employment Tax Credit Program Agreement entered into with the Minister of Employment and Immigration on June 29, 1978; (b) The Appellant incorrectly certified in the agreement referred to in paragraph 3(a) that a calculation of the normal work force for the purposes of determining eligibility for an employment tax credit was made in accordance with subsection (b) of the definition of “normal work force” as found in the Employment Tax Credit Program Regulations (for employment in an industry not having seasonal employment patterns); (c) The Appellant certified in the agreement referred to in paragraph 3(a) that all the terms of eligibility for the Employment Tax Credit Program had been read and understood and that it was an eligible employer entitled to receive employment tax credits in that the eligible employment being filled by the eligible worker was in addition to the Appellant’s normal work force and would not have been created without the tax credit offered by the Minister of Employment and Immigration under the agreement; (d) The number of employees that the Appellant had on its payroll, who were each paid more than 15 hours in the week by the Appellant in 1977 and 1978 was as follows: No. of Employees on Payroll Week Ending 1977 1977 1978 June 17, 24 17 16 July 1, 8, 15, 29 17 16 August 5, 12, 19, 26 17 16 September 6, 9 17 16 September 16, 23, 30 17 15 October 7 15 15 October 14, 21, 28 15 14 November 4, 11 15 14 November 18 14 14 November 25 12 13 December 2, 9 12 13 December 16 12 12 (e) The highest and lowest number of employees who were each paid 15 or more hours of work in any week by the Appellant during the 52 week period immediately preceding the first date on which the Appellant entered into the agreement with the Minister of Employment and Immigration was as follows: No. of Employees Highest 17 Lowest 17 (f) The Appellant’s normal work force during its 1979 taxation year was the number of employees at its place of employment who were on the Appellant’s pay-roll and were each paid wages for 15 or more hours of work during the corresponding week in the preceding year of 1977, as referred to in paragraph 3(d); (g) The Appellant provided additional employment to its normal work force in the following weeks: Additional Payroll Normal Employment Week Ending 1978 1978 Work Force (Workers) November 25 13 12 1 December 2 13 12 1 December 9 13 12 1 (h) The Appellant provided three weeks of eligible employment pursuant to the agreement referred to in paragraph 3(a); (i) The Appellant’s employment tax credit for its 1979 taxation year was calculated as follows: 3 weeks of eligible employment 40 hours/week $2/hour $240 (j) The Terms and Conditions of the Agreement referred to in paragraph 3(a) included the following: TERMS AND CONDITIONS The Minister and Employer agree that the following terms and conditions shall apply to the parties identified on the reverse side of this document for the purposes of an employment tax credit. (1) the WORKER must be an eligible worker as defined under the Employment Tax Credit Program Regulations; (2) the period of employment for which entitlement to a tax credit may be available to the employer is the proposed period of employment being not less than 3 months nor more than 9 months; OR from the proposed commencement date until the day the WORKER ceases to be employed by the EMPLOYER, whichever is earlier; (3) the employment tax credit available to the EMPLOYER by reason of the Employment Tax Credit Act shall be claimed by means of a deduction from federal income tax otherwise payable in accordance with the provisions of the Income Tax Act; (4) any amendment to this agreement requires the mutual consent, in writing, of the parties hereto; (5) the employment tax credit to which the employer will be entitled for employing the worker in eligible employment shall be at the applicable tax rate identified on the reverse side of this document for each hour for which wages were paid up to a maximum of 40 hours per week (for each worker identified in the Agreement) for the proposed period of employment; (6) any information required by the MINISTER relating to the employment tax credit shall be provided by the EMPLOYER to the Canada Employment and Immigration Commission; (7) the agreement and any matters pertaining to it are subject to audit by the Minister of National Revenue when required to determine whether a tax credit is available to the EMPLOYER; (8) any information obtained or determined through audit by the Minister of National Revenue shall be available for transfer to the MINISTER for any purposes required with respect to the Employment Tax Credit Act and Regulations; (9) the MINISTER has the right to terminate this agreement at any time if, in the opinion of the MINISTER, the EMPLOYER has failed to comply with the requirements respecting employment set out in the Employment Tax Credit Program Regulations or this agreement, or the employment for which an employment tax credit is sought is no longer considered acceptable for the tax credit, and where this agreement is terminated, eligibility to a tax credit is available only for those hours approved by the MINISTER; (10) for the purposes of paragraphs 2(a) and (b) on the reverse side of this document affecting the employer’s certification the terms “eligible employer”, “eligible employment”, “eligible worker”, and “Normal Work Force” shall be understood and applied as those terms are defined in the Employment Tax Credit Program Regulations. ...

I have considered the following cases in particular, as well as others in this appeal: Michael Starko v MNR, [1965] CTC 246; 65 DTC 5151; Regal Heights Limited v MNR, [1960] CTC 384; 60 DTC 1270; Robert D Tate and John Retzlaff v Her Majesty The Queen, [1974] CTC 731; 74 DTC 6559; Demeter Equity Limited v Her Majesty The Queen, [1979] CTC 311; 79 DTC 5230; Raymond Schumph v MNR, [1979] CTC 2850; 79 DTC 723. ...

In this way, nobody would know the amount of income received; (4) The appellant testified that there were many periodic discrepancies between the cash and the cash register tapes which resulted in cash losses, but this argument is not valid since the appellant did not allow his employees to prove that all the money was remitted to the principals; (5) As to the room revenue reported, the Minister was able to file as evidence some cash register tapes for the month of June 1972 which were seized by the respondent’s investigator at the office of the appellant’s accountant and which indicate that every two days, some $50 was taken out in cash when the appellant’s wife was making her report for income tax purposes; (6) There were many other documentary evidences to corroborate what might have been the suppressed income of the company for the years under appeal, such as cash register tapes found in the appellant’s office waste-basket, documents remitted by Mr Smith, a 20-year company employee, to Mr Carson who investigated the affairs of the appellant company; (7) When the method of percentage was utilized to determine the percentage of suppressed sales, Mr Carson testified that there was direct evidence to prove suppression of sales; (8) The Board was greatly impressed by the testimony given on cross- examination by Mr Carson who was able to explain how he proceeded in trying to find out the suppressed income of the appellant company; (9) The explanations given by Mr Murphy, such as theft by employees and sale of employee-owned products in the hotel cannot be seriously considered by the Board; (10) The net worth statement of the shareholders was just an attempt to corroborate the appropriation of funds by them (the shareholders) and is not essential to the respondent’s case. ...

(k) The appellant maintained that during the years in question he had reinvested the interest that he had earned on his investments. 2.13 Mr Tousignant was once again called to testify and he produced as exhibit 1-7 a memorandum concerning the source and application of funds as well as the cost of living: 1968 1969 1970 1970 Sources of available funds $5,158 $3,321 $13,905 Application of funds $8,112 $7,123 $12,456 Expenses related to the following items had not been considered in arriving at these figures for application of funds: (1) automobile expenses; (2) food; (3) clothing; (4) gifts; (5) pocket money; (6) home maintenance and furnishings; (7) magazines, newspapers, books; (8) entertainment; (9) cleaners, barbers, hairdressers; (10) charities, associations; and so on; (11) medical and dental expenses. 2.14 After receiving the second notice of reassessment, issued on June 22, 1978, the appellant filed an appeal to the Board on September 18, 1978. 3. ...

In order to repay their creditors in an orderly manner and avoid bankruptcy, these companies considered it advisable to carry on with the profitable aspect of their business, namely thre training of personnel, under the name of J M Chaput et Associés. ...

The following cases were cited and considered: Her Majesty the Queen v Douglas Lloyd Anderson and Jean Emily Beck- ingham, and, Joyce E McDonald and David C McDonald v Her Majesty the Queen, [1973] CTC 606; 73 DTC 5444; Edward A Shaffer v MNR, [1971] CTC 577; 71 DTC 5306; Irwin A Blackstone v Her Majesty The Queen, [1973] CTC 842; 73 DTC 6020; John Muzyka v MNR, 34 Tax ABC 409; 64 DTC 168. ...

It can be considered as obiter dictum or as a suggestion for a settlement, or as a basis for a settlement, without contending that it is the best computation. 4.02.9 It is clear that the appellant’s contention to the effect that the fair market value of the documents on December 31, 1971 was the same as the sale price in 1977, that is $25,000, cannot be accepted. ...

The appellant considered that the loss sustained was a business loss in the sense that it was an adventure in the nature of trade. ...