Blogue

Chiang v. R – TCC: Taxpayer not liable for penalties on over-contribution to RRSP

18 septembre 2017 By Bill Innes

Précis: This is an unusual case where the taxpayer innocently, but mistakenly, over-contributed to his RRSP for three years in the 90’s. CRA assessed him under Part X.1 of the Income Tax Act (the “Act”) with tax and penalties in respect of that over-contribution. Mr. Chiang appealed both the tax and the penalties. The Court dismissed the appeal as to the tax payable but allowed the appeal on penalties. The Court found that on the evidence Mr. Chiang had established a due diligence defence that precluded the application of penalties.
Chiang v. R – TCC: Taxpayer not liable for penalties on over-contribution to RRSPPlus >

Aon Inc. v. R. - TCC: Replacing 50% of the roof of a parking garage ($4 million) a deductible expense.

7 septembre 2017 By Bill Innes

Précis: The taxpayer expended roughly $4 million over a period of two years replacing a large portion of the roof of an underground parking garage that had been damaged by salt. The taxpayer sought to deduct the expense as a current operating cost. The area involved was roughly 47,000 square feet which was about 50% of the size of the parking area; a sizeable portion of the remaining area was covered by three buildings and not exposed to the same damage. CRA denied the deduction as being a capital expenditure. The Tax Court accepted the position of the taxpayer and allowed the appeal with costs.
Aon Inc. v. R. - TCC: Replacing 50% of the roof of a parking garage ($4 million) a deductible expense.Plus >

572256 Ontario v. R. - TCC: Taxpayer entitled to ITCs on expenses incurred by its agent

11 août 2017 By Bill Innes

Précis: The appellant claimed investment tax credits (ITCs) in respect of HST paid by SVO-Phase Two Management Inc. (SVO) during the Appellant’s reporting period from April 1, 2013 to June 30, 2013 on the basis that SVO acted as its agent in paying the HST in question. CRA denied the ITC claim and the appellant appealed to the Tax Court. The Tax Court accepted the appellant’s evidence the SVO acted as its agent during the period in question and allowed the appeal. There was no order as to costs since this was an informal procedure appeal.
572256 Ontario v. R. - TCC: Taxpayer entitled to ITCs on expenses incurred by its agentPlus >

McCullock-Finney v. R. - TCC: Appellant’s intention to claim a Capital Gain Deduction in 1994 not effective

10 août 2017 By Bill Innes

Précis: The taxpayer (since deceased) claimed a capital gains deduction in respect of two rental properties she disposed of in 2010 (which she had owned since 1979). CRA denied the deduction on the basis that she had not filed the requisite election with her 1994 income tax return. Her estate appealed to the Tax Court. The Tax Court dismissed the appeal. While the taxpayer might have intended to file the election in question there was no evidence that she had in fact filed it with her 1994 tax return. There was no order as to costs since this was an informal procedure appeal.
McCullock-Finney v. R. - TCC: Appellant’s intention to claim a Capital Gain Deduction in 1994 not effectivePlus >

Kamwar Inc. v. R. - TCC: 2016 application to extend time to object to 2012 reassessment struck

8 août 2017 By Bill Innes

Précis: In 2012 the applicant was assessed GST/HST for the reporting period October 23, 2009 to September 30, 2010. It took no steps until 2016 when it attempted to file a Notice of Objection with CRA. CRA rejected the Notice of Objection as being out of time and the applicant applied to the Tax Court for an extension. The Tax Court dismissed the application on the basis that it was well outside the statutory limitation period for filing an extension application. There was no order as to costs.
Kamwar Inc. v. R. - TCC: 2016 application to extend time to object to 2012 reassessment struckPlus >

Sharp v. R. - FC: “Fabricated” evidence allowed to remain on record with appropriate notation

4 août 2017 By Bill Innes

Précis: The applicants moved to set aside a ministerial requirement for information under subsection 231.1(2) of the Income Tax Act on the basis that it was being used to further a criminal investigation of their affairs. In support of the application the applicants tendered an affidavit of a Ms. Kaiser which purported to attach correspondence involving an employee of CRA. That correspondence was found to have been fabricated. The sole question before the Court not already agreed upon by the parties was whether the fabricated correspondence should continue to form part of the record with an appropriate notation that it was fabricated (the position of the Crown) or whether it should be removed and replaced by a fresh affidavit provided by the applicants (the position of the applicants).
Sharp v. R. - FC: “Fabricated” evidence allowed to remain on record with appropriate notationPlus >

Zheng v. R. - TCC: Appellant entitled to New Housing Rebate as agent of the true purchaser

4 août 2017 By Bill Innes

Précis: This is one of the few cases where the Tax Court has accepted that a named purchaser was a true “accommodation party” for the real purchaser and, as a result, allowed the New Housing Rebate where the real purchaser (in this case her former brother-in-law), or a member of his or her family, took possession of the property on closing. As a result the appeal was allowed, without costs (this was an informal procedure appeal).
Zheng v. R. - TCC: Appellant entitled to New Housing Rebate as agent of the true purchaserPlus >

Hurd Dentistry v. R. - TCC: Orthodontic services one supply, not separate supplies

3 août 2017 By Bill Innes

Précis: The taxpayer carried on a practice of orthodontic dentistry through a professional corporation. He claimed input tax credits (ITCs) for GST/HST purposes which CRA denied. At issue was whether his services involved a single supply of health care services or a supply of health care services and a supply of dental articles (e.g., braces, retainers, etc.). If the former, he was entitled to no ITCs; if the latter, he was entitled to the ITCs claimed. The Tax Court concluded that there was a single supply of medical services and dismissed his appeal. There was no order as to costs since this was an informal procedure appeal.
Hurd Dentistry v. R. - TCC: Orthodontic services one supply, not separate suppliesPlus >

Dewan Enterprises v. R. - TCC: GST/HST payable on sale of used vehicles - Ontario Motor Vehicle Tax irrelevant

3 août 2017 By Bill Innes

Précis: This is another decision virtually on all fours with the Aswal decision of the same Judge rendered a few days earlier on July 19, 2017. Put simply, it was no answer to the taxpayer’s failure to collect GST/HST on the sale of vehicles that had been used in its business that the purchaser had paid Ontario Motor Vehicle Tax. Appeal dismissed.
Dewan Enterprises v. R. - TCC: GST/HST payable on sale of used vehicles - Ontario Motor Vehicle Tax irrelevantPlus >

Aswal v. R. - TCC: GST/HST payable on sale of used truck - Ontario Motor Vehicle Tax irrelevant

2 août 2017 By Bill Innes

Précis: The taxpayers, operating as “Annie’s Gas Bar and Variety”, sold a truck that had been used in their business but did not collect or remit GST/HST ($1,755). The invoice issued by the taxpayers did not indicate that it was a GST/HST registrant. That meant that the purchaser had to pay 13% Ontario retail sales tax (“Motor Vehicle Tax”) directly to the Province of Ontario (which assumed that this was a sale between non-registrants). The appeal was dismissed since the payment of Ontario tax by the purchaser did not relieve the appellants of their obligation to charge and remit GST/HST.
Aswal v. R. - TCC: GST/HST payable on sale of used truck - Ontario Motor Vehicle Tax irrelevantPlus >

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