http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/110341/index.do 
Gutbucket Inc. v. The Queen (June 22, 2015 – 2015 TCC 156, Hogan J.).
Précis: The taxpayer claimed ITCs for 2007, 2008 and 2009 totalling $2,555.87 on expenses associated with two residential properties it owned in Guelph and Waterloo, Ontario. The principal of the taxpayer, Mr. Sobara, testified that the condominium in Waterloo was used to store a rare book collection that he had been assembling. Mr. Sobara testified that he carried on a consulting business for the corporation but there was no clear evidence of what that entailed. There was some vague evidence of sales from Mr. Sobara’s book collection in the past. There was no evidence of the use made of the other residential property.
The Court dismissed the appeal because the taxpayer had failed to raise any evidence to rebut the Crown’s position.
Decision: The Court found that Mr. Sobara’s evidence was unconvincing:
14] The case law instructs us that, when evaluating an activity that may be conducted for personal reasons, the Court must apply objective factors to determine whether the activity is, for example, a hobby, or whether it constitutes a business. These factors include the taxpayer’s profit and loss experience in past years, the taxpayer’s training, the taxpayer’s intended course of action, and the capability of the venture to show a profit. This list is not exhaustive.
[15] The Appellant’s evidence fell well short of the mark with respect to those factors. Mr. Sorbara’s evidence was limited to a statement that the Appellant may one day sell the books, or donate them so as to obtain a large charitable donation credit. The witness did not establish that the Appellant had a business plan or strategy. He gave no indication as to who the Appellant’s prospective clients might be. He failed to provide the Court with an overview of the rare book market. He stated that he had sold books in the past; however, he did not provide the Court with any information with respect to the circumstances surrounding the alleged sales. It was unclear from his testimony who had sold books in the past. Was it the Appellant or Mr. Sorbara? Considering the evidence as a whole, I believe that the books were likely collected and kept by the Appellant for the benefit of its shareholder, Mr. Sorbara.
[Footnotes omitted]
As a result the appeal was dismissed since the taxpayer did not raise a
prima facie case to rebut the Crown’s assumptions:
[19] Mr. Sorbara and the Respondent’s representative agreed to meet to review the invoices and attempt to agree on an allocation of expenses. Unfortunately, they were unable to come to an understanding in this regard. When the hearing resumed, I advised Mr. Sorbara that he should enter the disputed invoices into evidence and explain how these expenses related to each of the properties. He declined to do so. I surmise that he believed that the Appellant had established that both properties were fully used in the pursuit of a commercial activity. Because the Appellant failed to establish that this was indeed the case, the Court was unable to determine whether any of the expenses related to the Appellant’s consulting business. In the end, the Appellant’s appeal must be dismissed because the Appellant failed to rebut, on a prima facie basis, the Minister’s assumption that it did not have proper documentation to substantiate its ITC claim and that it did not use its real estate holdings in the pursuit of a commercial activity.
[20] For all of these reasons, the appeal is dismissed.