Words and Phrases - "anything"

The taxpayer, which carried on the business of manufacturing, marketing and distributing ready-to-eat cereal products under the brand name “Post,” sold that business to an affiliated Canadian company. Although it conceded that the FMV of the Class 29 property (being machinery and equipment) which it sold was $56.5 million, it took the position that the reference in s. 69(1)(b) to the disposition of “anything” referred to the sale of its business as a going concern. Since that going concern value was depressed by the amount of the pension obligations which were assumed by the purchaser, its deemed proceeds under s. 69(1)(b) were $48.3 million, and allocating all of this amount to the Class 29 property produced proceeds of disposition thereof of $48.3 million.

In confirming the Minister’s reassessment to increase the recapture of depreciation realized by the taxpayer based on proceeds of disposition of the Class 29 property of $56.5 million, Spiro J stated (at paras. 17, 20 and 26):

No text in the Act reflects an intention by Parliament to require taxpayers to use different methods for computing proceeds of disposition of depreciable property depending on whether the depreciable property was sold on its own to a non-arm’s length purchaser or as part of the sale of a business as a going concern. …

[T]he fair market value of a business as a going concern plays no role in determining the proceeds of disposition, or consequential recapture, of depreciable property under the Act.

None of the decisions cited to me by the Appellant suggest that Parliament intended one amount of recapture to apply when depreciable property is sold on its own and another amount when the same property is sold as part of the sale of a business as a going concern.