http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/107893/index.do 
Palmer v. The Queen (February 5, 2015 – 2015 TCC 28, Campbell J.).
Précis: Mrs. Palmer’s husband transferred a half interest in two pieces of property to her in 1999. During the same year they then transferred the property to their son, Randy. In 2004 Randy transferred the property to Mrs. Palmer. In 2011 Mrs. Palmer was assessed pursuant to subsection 160(1) of the
Income Tax Act (“ITA”) on the basis that the value of the property in 1999 was $90,000. The Crown conceded at trial that the value in 1999 was $47,500 resulting in a reduction of the assessment. In brief reasons issued from the bench the Tax Court rejected Mrs. Palmer’s arguments about the value of the property. She elected not to testify.
Decision: This decision deals with a subsection 160(1) assessment of Mrs. Palmer in relation to properties transferred to her by her husband through her son:
[2] The Minister of National Revenue (the “Minister”) assessed the Appellant by Notices dated December 8, 2011, pursuant to Section 160 of the Income Tax Act (the “Act”). The Appellant was assessed as a result of a transfer of property from Randy Palmer through to their son, Christopher Palmer, and eventually to the Appellant.
[3] The issue before me is whether the Minister properly assessed the Appellant pursuant to subsection 160(2). The liability initially assessed against the Appellant was $82,964.55.
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[5] At the outset of the recommencement of the hearing on December 17, 2014, Respondent counsel advised this Court that a concession in respect to the property value was being made. Assumption (g), set out in the Reply to the Notice of Appeal, placed a fair market value on the property as at March 26, 1999 of $90,000. The Respondent now concedes that the property value is $47,500, leaving the Appellant’s half interest at $23,750. This results in a liability reduction from $82,964 to $61,714 in respect to the Appellant’s assessment.
Mrs. Palmer elected not to testify. The court rejected her attempt to argue for a lower value of the properties and dismissed the appeal with costs:
[18] In his oral submissions, Respondent counsel referenced the particulars of the assessment contained in Tab 2 of Exhibit R-1. In that document, the CRA calculated the equity in the property at $124,869. That is the property value referred to on August 3, 2004, of $140,000, less encumbrances totalling $15,130. With an assessed benefit amount of $37,964, the Appellant would have to produce reliable evidence of encumbrances against the subject property in the vicinity of $102,000 in order to affect the outcome of the assessment. Unfortunately, the Appellant failed to connect the amount of any of the encumbrances to the specific properties. Two of the collateral mortgages are against an additional property in Ellerslie as well as the subject property in Bideford, but I have no evidence of which part of the specific total mortgage amount might relate to the value of the subject property. In addition, I have no evidence before me that indicates whether the first collateral mortgage in the amount of $47,000 and registered in April 2000 may have been satisfied prior to registering the next collateral mortgage of $80,000 in September 2001 against the same properties. That factor would also affect the amount of the potential encumbrances as the principal outstanding on the prior mortgage may have been combined with additional funds borrowed on the subsequent mortgage. I simply have no way of ascertaining this. The third encumbrance, in the amount of $25,000 and registered April 2002, does not appear to be in respect to the same parcels that are contained in the first two registered mortgages and, without accompanying survey plans, I have no means of determining this.
[19] The Appellant did not produce evidence that would answer the questions outlined in my aforereferenced comments. In addition, without expert evidence, the Appellant failed to demolish the Minister’s assumptions respecting the fair market value of the property. With the onus on the Appellant, she has failed to demolish the Minister’s assumptions contained in the Reply to the Notice of Appeal. With an absence of evidence, those assumptions stand. Consequently, I am allowing the appeal, but only to permit the Respondent’s concession respecting the reduction in the fair market value of the property as of March 26, 1999 from $90,000 to $47,500, which results in an overall tax liability reduction from $82,964 to $61,714. Costs are awarded to the Respondent.