http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/67015/index.do 
Kukreja v. The Queen[1] (February 24, 2014) was an appeal dealing with the taxpayer’s claim for a GST/HST new housing rebate. The appellant and her husband were living in a house owned by her brother-in-law from 2003 until September of 2009. When the brother-in-law decided to sell that house the appellant entered into an agreement of purchase and sale for a new house:
[10] Some time prior to September 2009, the appellant and her family became aware that the brother-in-law intended to sell the house on Reindeer Crescent.
[11] As a result, the appellant’s husband agreed to purchase a house to be constructed on Thorndale Road. Subsequently, her husband decided that the appellant should be the purchaser of the house and she signed an agreement of purchase and sale with respect to the Thorndale house on August 20, 2009, the purchase price being $525,000. The purchase was to close over a year later. Subsequently, in May 2010, the price was increased to $540,000 because the appellant had opted for certain upgrades to the home.
The house closed on November 25, 2010 while the appellant was living in India. She borrowed funds from her brother-in-law to close the transaction. In order to repay her brother-in-law she put the house up for sale and the property sold shortly thereafter at a substantial profit:
[18] On January 19, 2011, an offer to purchase the Thorndale property was received and the sale by the appellant of the Thorndale property closed in February 2011.
[19] The appellant sold the property for a price slightly more than $100,000 more than her purchase price. According to the appellant, the gain was actually less than that because of various expenses, but even allowing for expenses, the appellant made a significant gain.
[Footnote omitted]
The court did not accept the appellant’s evidence or that of her husband that the house was to be their primary place of residence largely on the basis that they did not have the income to afford to maintain such an expensive house:
[46] I do not accept the appellant’s evidence of her intention for two reasons.
[47] The first and primary reason is the following. In 2008, the year before the purchase, the appellant and her husband had a combined income of under $23,000. In 2009, the year the appellant signed the purchase agreement, they had a combined income of under $26,000. It is also clear that the financial difficulties of the business started some time during that year.
[48] I do not think that the appellant or her husband, who also had two children at the time, could reasonably have expected that they would have been able to pay all their other living expenses and also finance the purchase of a $500,000 house, even with very low interest rates and with the modest assistance the mother-in-law could provide.
[49] Although the appellant and her husband testified that the business had been going well, the evidence does not show that it had been generating the kind of income that could support such a purchase.
[50] The husband suggested that they were perhaps dreamers and that this explained their unrealistic expectations as well as the business difficulties he had had. I do not accept that they would have been unrealistic to that degree.
[51] Although, in itself, it would not be persuasive, my second reason is that it is unlikely that the appellant would not remember the number of bedrooms and bathrooms in the house. The prospect of acquiring a large house of their own would have been an exciting one for the family, and I would expect the appellant to remember significant features such as the fact that they would have six bedrooms, more than enough bedrooms for everyone.
Accordingly the appeal was dismissed.
[1] 2014 TCC 56.