Blogue

Turner v. R. - TCC: Tax Court rejects evidence of non-capital losses available for carry forward

25 avril 2016 By Bill Innes

Précis: Mr. Turner was a retired electrical engineer. In each of 2012 and 2013 he claimed roughly $45,000 of non-capital losses carried forward from preceding taxation years. His evidence was that the losses arose from a series of bad investment decisions made over a period stretching back as far as 1991 and going up to 2004. He had essentially no documentation to support his claim and the court did not accept his evidence that he was in the business of dealing in securities prior to 2005. Accordingly the appeal was dismissed. As this was an informal procedure appeal there was no order as to costs.
Turner v. R. - TCC: Tax Court rejects evidence of non-capital losses available for carry forwardPlus >

Kandasamy v. R. - TCC: Taxpayer allowed part of expenses claimed - Crown’s pleading deficient

22 avril 2016 By Bill Innes

Précis: The taxpayer operated a cleaning business as a sole practitioner from 2009 to 2011. CRA denied most of the expenses claimed from the business in 2010 and 2011 and Mr. Kandasamy appealed to the Tax Court. The Court found that Mr. Kandasamy had failed to meet the onus on him to rebut the assumptions pleaded by the Crown. However in the case of expenses which CRA had treated as capital items and allowed capital cost allowance the Court found that the issue was not clearly pleaded by the Crown. As a result Mr. Kandasamy was entitled to deductions of $5,000 in 2010 and $2,400 in 2011 which CRA had treated as capital items. There was no order as to costs.
Kandasamy v. R. - TCC: Taxpayer allowed part of expenses claimed - Crown’s pleading deficientPlus >

David v. R. - TCC: Business carried on by corporation, not taxpayer - gross negligence penalties vacated

22 avril 2016 By Bill Innes

Précis: Mr. David was one of thousands of Canadians involved in a pyramid scheme known as Treasure Traders International (“TTI”). CRA reassessed him for 2004 for $21,000 of unreported commission income from TTI and imposed gross negligence penalties. His position was that the business was carried on by his company, M.S.J Services Ltd. (“MSJ”), and that the expenses of the business exceeded any commission income earned. The Tax Court accepted his evidence that the business was carried on by MSJ, vacated the penalties and allowed the appeal.
David v. R. - TCC: Business carried on by corporation, not taxpayer - gross negligence penalties vacatedPlus >

Mazraani v. R. - TCC: Insurance agent was an employee engaged in insurable employment

21 avril 2016 By Bill Innes

Précis: This case dealt with whether an insurance agent selling life, disability and health insurance on behalf of Industrial Alliance Insurance and Financial Services Inc. (“Industrial”) in the province of Québec was engaged in insurable employment for the purposes of the Employment Insurance Act (the “EIA”). CRA ruled that Mr. Mazraani was an independent contractor and he appealed to the Tax Court. The Tax Court in what is likely that longest Tax Court decision this year (and one of the longest Tax Court decisions in many years) - 304 paragraphs, 2 appendices and 292 footnotes - reversed the finding of CRA and ruled that Mr. Mazraani was engaged in insurable employment with Industrial. The Court also ordered Industrial to pay Mr. Mazraani $2,000 in costs.
Mazraani v. R. - TCC: Insurance agent was an employee engaged in insurable employmentPlus >

Ranjbar v. R. - FCA: Tax Court reversed, taxpayer entitled to New Housing Rebate

21 avril 2016 By Bill Innes

Précis: The taxpayer claimed a New Housing Rebate in respect of a home (the “Richmond Hill property”) which she had contracted to purchase but which she never occupied. The Tax Court found that she had intended to occupy the Richmond Hill property as her primary residence but that her failure to in fact occupy the residence was fatal to her claim pursuant to clause 254(2)(g)(i)(A) of the Excise Tax Act (the “ETA”). She appealed to the Federal Court of Appeal which held that the taxpayer was entitled to the Rebate under the provisions of subparagraph 254(2)(g)(ii) of the ETA:
Ranjbar v. R. - FCA: Tax Court reversed, taxpayer entitled to New Housing RebatePlus >

CBS Canada Holdings v. R. - TCC: Court strikes affidavit filed by counsel for taxpayer

20 avril 2016 By Bill Innes

Précis: CBS Canada Holdings Co. (“CBS”) and the Crown reached a settlement on a tax appeal. Subsequently there was a dispute about the terms of the settlement and CBS moved in the Tax Court to enforce it. The Crown moved to strike an affidavit filed by CBS in support of the motion. The affidavit was filed by a lawyer at Blake, Cassels & Graydon LLP which was the firm representing CBS on the motion. The Court found that the affidavit failed to meet the twin criterion of reliability and necessity found in the case law. The affidavit should have been submitted from an employee of CBS and not counsel. CBS was granted leave to file a new affidavit. Costs were awarded to the Crown in any event of the cause.
CBS Canada Holdings v. R. - TCC: Court strikes affidavit filed by counsel for taxpayerPlus >

Zhu v. R. - FCA: Losses did not arise from a business carried on in Canada - appeal dismissed

20 avril 2016 By Bill Innes

Précis: This is an appeal of a Tax Court decision blogged earlier on this site. Mr. Zhu argued unsuccessfully before the Tax Court that he should be entitled to deduct losses incurred by him on the disposition of shares at a time he was a non-resident of Canada. The Tax Court held that the losses were not incurred in the course of a business carried on in Canada under the common law test. The Federal Court of Appeal permitted him to raise a new argument on appeal, i.e., whether the losses were incurred in the course of a business carried on in Canada under the expanded test found in paragraph 253(b) of the Income Tax Act (the “ITA”). After consideration of the new argument the Court concluded that the losses were not incurred in Canada under the expanded test and dismissed the appeal with costs.
Zhu v. R. - FCA: Losses did not arise from a business carried on in Canada - appeal dismissedPlus >

Salloum v. R. - FCA: Taxpayer not engaged in business - appeal dismissed

18 avril 2016 By Bill Innes

Précis: This was a decision on combined income tax and GST appeals. In the Tax Court Justice Owen found that Mr. Salloum was not engaged in business during the period under appeal and dismissed his appeals. He appealed to the Federal Court of Appeal where his appeals were dismissed from the bench on the basis that the Court could not interfere with Justice Owen’s finding that Mr. Salloum was engaged in “the ‘inherently personal activity’ of getting an education so that, at some future time, he could use that education to pursue a profit.” [Para. 6].
Salloum v. R. - FCA: Taxpayer not engaged in business - appeal dismissedPlus >

Cridge v. R. - FCA: The Income Tax Act is not unconstitutional

15 avril 2016 By Bill Innes

Précis: Ms. Cridge was denied the deduction of certain expenses and a bad debt. Before the Tax Court she argued unsuccessfully that the Income Tax Act (the “Act”) was unconstitutional. Her appeal to the Federal Court of Appeal was dismissed from the bench with costs of $500 to the Crown.
Cridge v. R. - FCA: The Income Tax Act is not unconstitutionalPlus >

Cuddy v. R - TCC: Discovery timetable to include follow-up questions

15 avril 2016 By Bill Innes

Précis: This is a decision on a scheduling motion for an examination for discovery. The Crown wanted the schedule to provide for follow-up questions arising out of answers to undertakings. The taxpayer objected on the basis that such questions would amount to a second examination for discovery which cannot be conducted without an order of the Court. The Tax Court found that follow-up questions are inherent in the discovery process and accepted the Crown’s position.
Cuddy v. R - TCC: Discovery timetable to include follow-up questionsPlus >

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