Date: 19991019
Docket: A-604-96
CORAM: DESJARDINS, J.A.
MCDONALD, J.A.
| SEXTON, J.A. |
BETWEEN:
JOHN SMITH
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Heard at Toronto, Ontario, on Tuesday, October 19, 1999
Judgment Delivered Orally from the Bench at Toronto, Ontario on Tuesday, October 19, 1999
REASONS FOR JUDGMENT BY: McDONALD J.A.
Date: 19991019
Docket: A-604-96
CORAM: DESJARDINS, J.A.
MCDONALD, J.A.
SEXTON, J.A.
BETWEEN:
JOHN SMITH
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
(Delivered Orally from the Bench at
Toronto, Ontario on Tuesday, October 19, 1999)
McDONALD J.A.
[1] This is an appeal from the Tax Court of Canada which disallowed the appeal of the appellant from a reassessment issued by the Minister of National Revenue in respect of the 1990 and 1991 taxation years.
[2] The issue before the Trial Judge was whether the sums of $32,100.00 in 1990 and $60,000.00 in 1991 were properly included in the Appellant"s income as being taxable income or appropriations pursuant to subsection 15(1) of the Income Tax Act .
[3] The facts are not disputed. In May 1989 Mr. Smith entered into an agreement with St. Joseph"s General Hospital to provide contract services. In December 1989 Mr. Smith assigned the contract to 442849 Ontario Limited. During the relevant tax years Mr. Smith was the directing mind of the company and owned all the shares. The hospital paid the company $32,100.00 in 1990 and $60,00.00 in 1991. These amounts were not reflected in either the appellant"s nor the company"s tax returns. The amount was credited to Mr. Smith"s shareholders loan account rather than being added to the company"s income for the appropriate years. Upon reassessment the Minister of National Revenue added these amounts to the income of the appellant and the company for the 1990 and 1991 taxation years. The company withdrew its appeal of the Minister"s reassessment at the commencement of the trial.
[4] The appellant argued that no benefit was conferred on him by the company. He maintained that the credit to his shareholder loan account was merely a bookkeeping error. Such an error cannot, he argued, serve as a basis for taxation.
[5] The issue of whether or not a benefit was conferred, and whether there was a genuine bookkeeping error are questions of fact. The Tax Court Judge made findings based on the evidence before him that the appellant did receive a benefit.
[6] The Trial Judge having the opportunity to see and hear the witnesses also found that no genuine bookkeeping error had occurred. We can not interfere with this finding of fact. This Court can only interfere with a Trial Judges" findings of facts where there is palpable overriding error. We can find no such error in this case.
[7] The appeal will be dismissed with costs.
"F.J. McDonald"
J.A.
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKETS: A-604-96
| STYLE OF CAUSE: JOHN SMITH |
Appellant
| - and - |
| HER MAJESTY THE QUEEN |
Respondent
DATE OF HEARING: TUESDAY, OCTOBER 19, 1999
PLACE OF HEARING: TORONTO, ONTARIO
| REASONS FOR JUDGMENT BY: McDONALD J. |
Delivered at Toronto, Ontario
on Tuesday, October 19, 1999
APPEARANCES: Mr. Robert R. Jason
| For the Appellant |
Mr. David W. Chodikoff
| For the Respondent |
| SOLICITORS OF RECORD: Fogler, Rubinoff |
| Barristers & Solicitors |
| Suite 4400, P.O. Box 95 |
| Royal Trust Tower, Toronto-Dominion Centre |
| Toronto, Ontario |
| M5K 1G8 |
| For the Appellant |
Morris Rosenberg
| Deputy Attorney General of Canada |
| For the Respondent |
FEDERAL COURT OF APPEAL
Date: 19991019
Docket: A-604-96
BETWEEN:
| JOHN SMITH |
Appellant
| - and - |
| HER MAJESTY THE QUEEN |
Respondent
| REASONS FOR JUDGMENT |