http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/71278/index.do 
Joseph v. The Queen (April 23, 2014 – 2014 TCC 120) was an appeal by the taxpayer of net worth assessments for 2008 and 2009:
[3] The Canada Revenue Agency (“CRA”) reassessed to include additional net business income of $31,942 and $36,222 in 2008 and 2009, respectively. CRA used a net worth method to estimate his unreported income. CRA also assessed penalties of over $4,000 in each year.
The taxpayer argued that part of the increase in his apparent net worth was due to loans advanced to him. The court rejected this evidence either because the loans (based of the alleged dates of advance and repayment) would not have operated to increase his apparent net worth or, in the case of alleged loans from two of his sisters-in-law, because the circumstances surrounding such loans were highly suspect:
[7] The second and third sources of available cash put forward by Mr. Joseph at the hearing were a series of loans from two of his sisters-in-law. He gave evidence that Jasmine Watson, one of his wife’s sisters, made several advances totalling U.S. $3,500 in 2008 and 2009. He also gave evidence that another of his wife’s sisters, Laurie-Anne Tonge loaned him another U.S. $1,300 in 2008 and 2009. In addition to his testimony to this effect, he entered a number of brief letters from his sisters-in-law evidencing these loans. The Court has too many concerns with these letters and the evidence relating to these loans to conclude that these amounts were in fact advanced as described. Firstly, it should be noted that while the two sisters-in-law live on different islands some distance apart in the British Virgin Islands, all of the originals of these letters appear to be printed on identical paper stock, using the same template, the same font, and the same margins. Further, they are all on crisp, clean, unfolded paper. More significantly, Mr. Joseph claims they were prepared only recently to evidence the earlier loans, but it is clear from their wording and dating that the writer or writers had intended at the time of writing them that they would appear to have been written in 2008 and 2009. There are references to past personal events such as birthdays, holidays, schools and trips. Further, Mr. Joseph’s testimony was clear that the funds were advanced by each of the sisters-in-law on their various visits to the Toronto region to stay with them, yet one of the letters clearly says that the sister-in-law is sending the money with her mother who will be visiting shortly. …
In general the court found the tenor of the taxpayer’s evidence unreliable:
[10] I should add that the Court does have some concerns with respect to the credibility of some of the evidence and Mr. Joseph’s testimony. Firstly, I have already set out my concerns with respect to the letters from the sisters-in-law. Secondly, Mr. Joseph’s wife did not testify though she might have had something relevant to say about the money received from her sisters-in-law and perhaps and mother-in-law, as well as on the family’s spending reported in the net worth questionnaire on Personal Expenditures Worksheet. Further, Mr. Joseph’s testimony about his phone expenses turned out to only be an estimate of his cell phone expenses and not his house phone or the other Bell services bundled with it which went otherwise undescribed until further questioning. The Personal Expenditures Worksheet numbers estimated by Mr. Joseph are clearly very questionable. In addition to the phone issue, he estimated that he, his wife and young daughter spent $1,100 annually on food and none of that, or anything else, on cleaning supplies, health care or personal care, notwithstanding that his infant daughter was drinking formula and wore disposable diapers. Upon further questioning he acknowledged that a revised estimate would be more like twice that amount. Most tellingly, the taxpayer’s reported estimates of payments on his home in respect of mortgage, principal, interest and taxes, insurance, heat, water, hydro and payments on the President’s Choice loan used to make the down payment, would have used up virtually all of his pre-tax reported income.
The taxpayer’s appeal was dismissed, without costs.