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However, at the beginning of the hearing the counsel for both parties informed the Court that they had reached a partial admission and settlement on the following points: 3.01 The appeal is allowed in part for each of the following years, referring to the T7W-C form attached to the reassessments: 1975 The penalty must be levied only on $1,217.65, and not on $1,649.41. 1976 (a) the penalty must be levied only on $1,410.26, and not on $3,022.55; (b) the granting of option of $10,000 must be considered as down payment; and (c) the standby charges of $1,612.29 which were omitted were reduced to $850.89. 1977 The penalty must be levied only on $1,136.90, and not on $2,282.90. From 1975 to 1977 the reassessments are maintained except on the points above. 1978 (a) the penalty must be levied only on $901.90, and not on $7,518.64; (b) the following point is in dispute: should the profits made from the sale of the Harrison farm be considered as a capital gain or not? ...

Counsel for the respondent argued that: (1) It was not clear whether any other methods of providing financial security for Mr Jabs’ family were considered. (2) Mr Jabs testified that tax consequences were not considered by him although Mr Milan, his accountant, made it clear that the tax implications of whatever steps Mr Jabs took would naturally have been discussed. (3) While Mr Jabs is not a director or officer of Development or Roblyn there is still a marked involvement of him and his staff of Construction in the management and affairs of these two companies. (4) Development was a joint venture development company with which all three companies were connected. (5) Mr Milan had admitted that Eric Jabs had a big part in the decisionmaking process of Development and Roblyn although he was not always consulted. (6) Although Mr Jabs had stated that the intention was to keep Development debt-free this was not what actually happened. (7) Mr Jabs was the directing mind between the three companies. (8) A lease agreement was signed by Mr Pratt on behalf of Construction while the registered owner of the property was Development. (9) From the documents evidence showed that Mr Pratt approached Mr Jabs for his decision on each of the companies which was to be involved in each project. (10) Eric Jabs signed for Development when it applied for a loan to the Royal Bank of Canada. ...

Nevertheless, I am prepared to accept that the prospect of using the property as the home of the appellant’s family was seriously considered at the date of acquisition. ... The purchase and sale of the one parcel of property — the corner parcel disposed of in the second sale and assessed to tax in the year 1980 in the amount of $7,635 — will be considered as resulting from the acquisition of land for the purpose of constructing a principal residence, and will be on capital account. ...

The Court thinks that 60 per cent of the amount can reasonably be considered for this. The other 40 per cent must be considered as a payment for use or as an advantage to the appellant, and therefore taxable in his income. 5. ...

At first, Ontario Hydro considered undertaking construction of the additional heavy water production in conjunction with its nuclear power plants but AECL decided to assume that responsibility. ... The facts peculiar to this case distinguish it from CIL and from the other authorities considered in C/L. ...

The respondent was of the view that that mortgage, in the circumstances to be recounted, was not a qualified investment for the trust as it was prohibited from being so considered by Regulation 4900(1)(g) of the Income Tax Regulations (as it was in 1975) in as much as the “mortgagor” was “a person with whom the annuitant does not deal at arm’s length”. ... He continued that, as between those two parties, Black Prince is considered the mortgagor “and it can renew or replace the existing first mortgage”. ...

In my view, the failure of the appellant and Reasoned to amend their agreement is not, when considered in relation to the other evidence, indicative of sham, that is to say, a document not intended by the appellant and Reasoned to govern their relationship. ... I can find in the present case no greater degree of artificiality than existed in the situation considered in Sazio. ...

Subsections 74(5) and 103(1) read as follows: 74. (5) Where a husband and wife were partners in a business, the income of one spouse from the business for a taxation year may, in the discretion of the Minister, be deemed to belong to the other spouse. 103. (1) Where the members of a partnership have agreed to share, in a specified proportiion, any income or loss of the partnership from any source or from sources in a particular place,as the case may be, or any other amount in respect of any activity of the partnership that is relevant to the computation of the income or taxable income of any of the members thereof, and the principal reason for the agreement may reasonably be considered to be the reduction or postponement of the tax that might otherwise have been or become payable under this Act, the share of each member of the partnership in the income or loss, as the case may be, or in that other amount, is the amount that is reasonable having regard to all the circumstances including the proportions in which the members have agreed to share profits and losses of the partnership from other sources or from sources in other places. 4.02 Case law Counsel for the parties referred to the following cases: 1. ... The Department of National Revenue contended that the contract itself is not valid because “the principal reason for the agreement may reasonably be considered to be the reduction... of the tax”, as stated in subsection 103(1) of the Income Tax Act. ...

Counsel for the respondent maintained that the place of employment could not qualify as a “special work site” because the duties performed by the appellant were not of a temporary nature, that the term “board” should apply to his food and to his accommodation, whereas the appellant paid only for his food, and that the sum in question could not be considered an “allowance”. ... Whether or not the appellant and the company had the same understanding of the agreement in question is not an issue to be considered by this Board. ...

Mrs Cornforth never filed an income tax return and was, for tax purposes, considered by the husband along with their children, as his dependants. ... I am not at all certain that there exist guidelines to help determine the degree of activity or expertise required before a taxpayer can be considered to be a bona fide partner. ...