Date: 19971206
Docket: 97-558-IT-I
BETWEEN:
GEORGE S. MONTEITH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
(Delivered from the Bench in Toronto, Ontario, on November 3, 1997)
Hamlyn, J.T.C.C.
[1] These are appeals for the 1993 and 1995 taxation years.
[2] I am reading directly from the Reply to the Notice of Appeal as the preliminary steps leading up to these appeals:
4. In computing income for the 1993 and 1995 taxation years, the Appellant failed to include benefits in the amounts of $1,350.00 and $960.00, respectively, received from The Municipality of Metropolitan Toronto (the "Employer").
5. The Minister assessed the Appellant, for the 1993 and 1995 taxation years, as filed, by Notices of Assessment dated March 21, 1994 and May 6, 1996 respectively.
6. The Minister reassessed the Appellant for the 1993 and 1995 taxation years by Notices of Reassessment dated September 3, 1996 and May 16, 1996 respectively.
7. In reassessing the Appellant for the 1993 and 1995 taxation years, the Minister added the amounts of $1,350 and $960, respectively to the Appellant's income as benefits conferred by the Employer.
[3] The Appellant was employed at Metro Hall in the City of Toronto at all times relevant to these appeals.
[4] The Appellant was provided a reserved parking space by his employer for which he was not charged.
[5] The Minister of National Revenue (the "Minister") assessed the Appellant as having received a taxable benefit, by reason of his employment, of $1,350 for 1993 and of $960 for 1995.
[6] The Appellant also alleges the 1994 T-4 taxable benefits, by reason of his employment, in the amount of $960 was rolled into his 1995 reassessment.
[7] The question before the Court is: did the Minister err in including a taxable benefit in the Appellant's income for the taxation years 1993 and 1995.
[8] The legislation is found in the Income Tax Act (the "Act"), paragraphs 6(1)(a) and (b).
[9] In terms of analysis, the Appellant has received a taxable benefit, by reason of his employment. His employer provided him with not only a parking space at his place of employment, but with a reserved space which is only available to him. According to a letter that was submitted by the Appellant, written by Tony Veneziano, Acting Director at that time of Accounting Services, who was also a witness in this case today, if the Appellant was required to park in one of the other comparable parking structures around Metro Hall, then he would be required to pay $80 to $100 a month in parking fees. Therefore, if he did not receive a parking space supplied by his employer, then he would either have to pay to park in one of the other lots around Metro Hall and pay the monthly parking fee personally, or arrange some other mode of transportation in order to commute to work.
[10] The Minister's evidence on this point was that the value of the parking in 1994 was a range of $160 to $170 a month. I conclude that the survey by the Minister was preliminary only, and not definitive, and I also conclude the approach by the Metro authority was also not definitive. But I do accept, as a conclusion of what the valuation should be in this matter is as placed by Metro. The value of the reserved parking location for 1993 and 1995. It is my opinion, that the $960 taxable benefit, that the Appellant included in the Appellant's income for the taxation year 1995 — and I stress that — that he included it in his income and that was the evidence that I heard today, was reasonable under the circumstances. This benefit works out to a monthly parking fee of $80 a month which is on the low end of the range of fees charged by comparable structures surrounding the place of employment.
[11] The trouble is, however, I conclude that the $1,350 benefit, included in the Appellant's income for the 1993 taxation year seems, on the face of it, unreasonable. Since the Appellant was only supplied with a parking space for nine months in that taxation year, the benefit, included in the taxpayer's income, works out to about $150 a month, which is much higher than the Metro estimate placed upon it between $80 to $100 a month.
[12] Therefore, I conclude, as a matter of finding in this matter, that the taxable benefit included in the Appellant's income for the 1993 taxation year should be $720 and not $1,350.
[13] The Appellant has also raised the issue that Revenue Canada has acted in an unfair, unreasonable and discriminatory manner by singling him out and other employees who received a reserved parking space for reassessment based on the benefit received by reason of employment. It is my opinion that however unfair the assessment may seem to the Appellant, there is no basis for an appeal on these grounds. And as I advised him, there was clear case law against his proposition. And the case that I am relying on is The Queen v. McKinlay Transport Ltd. [1990] 1 S.C.R. 627. That case made it very clear the Minister has an absolute power to re-examine, at random, the returns of any taxpayer at any time.
[14] The principle taken from this case can also be applied to dispose of the Appellant's argument that if he did receive a benefit, it was only for the amount of the difference attributable to a reserved space as compared to an unreserved space. And it is my conclusion that the fact that the Minister did not assess employees who were in receipt of unreserved parking spaces is irrelevant to the current appeals. The Minister properly chose the Appellant's tax returns to re-examine and reassess. Therefore, any appeal that the Appellant makes must be decided only on the factors relevant to his specific situation, without making mention to how someone else was or was not assessed.
[15] Now, as for the T-4 for 1994, which caused a lot of confusion, and which appears in Exhibit A-5 — the A-5 was made an exhibit, but they are the documents filed by the Minister in relation to the reassessments for 1993 and 1995 under the Act. The Appellant has shown, from that documentation, that it would appear the Minister included the additional T-4 of 1994 in the assessment of 1995. The evidence on behalf of the Appellant was clearly from the Metro Accounting official that Metro, in box 14 on the Appellant's original T-4 for 1995, included a $960 benefit for parking in 1995. Therefore, the additional assessment of $960 included in the T-4 for 1994 in 1995 appears unjustified.
[16] The decision in this matter is the appeals are allowed and referred back to the Minister for reconsideration and reassessment on the basis that for 1993 the value of the taxable parking benefit was $720.
[17] For 1995, the Appellant included a $960 taxable parking benefit in his tax return for the year, and the Minister added an additional $960 taxable benefit that the Appellant did not receive. Therefore, the $960 taxable parking benefit was included in his income tax return for 1995 and was properly so included. The extra $960 parking benefit was for another taxation year and, therefore, the assessment for the 1995 taxation year is to be reduced by $960.
[18] So, in essence, we have the value of the taxable benefit for 1993 being fixed at $720 and the assessment for 1995 being reduced by $960.
Signed at Ottawa, Canada, this 6th day of December 1997.
"D. Hamlyn"
J.T.C.C.