Date: 20020204
Docket: 2001-2555-IT-I
BETWEEN:
SYED HASSAN JAFFAR,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Beaubier, J.T.C.C.
[1] This appeal pursuant to the Informal Procedure was heard at Toronto, Ontario on January 25, 2002. The Appellant testified. He was born in 1938 and has a B. Admin. He is a systems analyst.
[2] Paragraphs 3 to 10 inclusive of the Reply to the Notice of Appeal describe the issue in dispute. They read:
3. In filing his income tax return for the 1999 taxation year, the Appellant reported income from employment in the amount of $92,642.16 [$62,731.69US*1.476800174] and claimed expenses from employment in the amount of $37,166.63 [$25,167.00 US*1.476800174].
4. By Notice of Assessment dated September 5, 2000, the Minister of National Revenue (the "Minister") assessed the appellant for the 1999 taxation year and disallowed the expenses from employment claimed in the amount of $37,166.63.
5. By Notice of Reassessment dated December 18, 2000, the Minister reassessed the Appellant's income tax return for the 1999 taxation year and allowed expenses from employment in the amount of $37,394.14 [$25,167.00US*1.48584024].
6. By Notice of Reassessment dated April 6, 2001, the Minister further reassessed the Appellant's income tax return for the 1999 taxation year and disallowed the said expenses from employment in the amount of $37,394.14.
7. The Appellant served on the Minister a Notice of Objection dated April 24, 2001 with respect to the 1999 taxation year on the basis that the amount of $37,166.63 received should not be included in computing his income from employment.
8. By Notice of Confirmation dated June 12, 2001, the Minister confirmed that the amount of $37,166.63 received is income from employment and is therefore included in computing his income from employment.
9. In so confirming the reassessment of the Appellant, the Minister made the following assumptions of fact:
(a) during the 1999 taxation year, the Appellant was an employee of Computec International (the "Employer") from January 1, 1999 to October 31, 1999;
(b) during the 1999 taxation year, the Appellant worked for the Employer in the United States of America;
(c) during the 1999 taxation year, the Appellant received income from employment in the amount of $92,642.16 from the Employer;
(d) during the 1999 taxation year, the Appellant reported income from employment in the amount of $92,642.16;
(e) during the period of his employment for the Employer for the 1999 taxation year, the Appellant did maintain a self-contained domestic establishment with the meaning assigned by subsection 248(1) of the Income Tax Act ("the "Act") located at 6096 Farmstead Lane, Mississauga, Ontario, as his principal place of residence;
(f) during the period of his employment for the Employer for the 1999 taxation year, the Appellant did maintain at another location (Rochester, New York) a self-contained domestic establishment within the meaning assigned by subsection 248(1) of the Act;
(g) the said income from employment in the amount of $92,642.16 did include an allowance for expenses in the amount of $37,166.63;
(h) the said expenses were identified as apartment and furniture rental, meals and gas/electricity for the maintenance of a second residence in the city of employment and car mileage to and from Canada;
(i) the said allowance was an allowance for personal or living expenses of the Appellant;
(j) during the 1999 taxation year, the Appellant was hired by the Employer to work originally in Philadelphia, Pennsylvania;
(k) during the 1999 taxation year, the Appellant worked for the Employer out of the Rochester, New York office; and
(j) the work location where the Appellant was employed during the period of his employment for the Employer for the 1999 taxation year was not a special work site or remote location within the meaning of subsection 6(6) of the Act.
B. ISSUES TO BE DECIDED
10. The issue to be decided is whether the amount received by the Appellant as an allowance for personal or living expenses for the 1999 taxation year of $37,166.63 is to be included in computing his income from employment.
[3] Assumptions 9(a) to (i) inclusive were confirmed by the evidence.
[4] Assumptions 9(j) and (k) are wrong: Exhibit R-2, the Appellant's employment agreement with the Employer specifies that the Employee is to work "at the Company's designated offices at the location specified in paragraph 3 of the Schedule or, if directed to do so, at the office of clients". He was originally hired to work at the Employer's premises in Malvern, Pennsylvania, U.S.A. After he had been in Malvern a few days, his Employer directed him to go to Rochester, New York to carry out his profession at the offices of one of the Employer's clients. He did so for approximately one year and three months.
[5] In Rochester the Appellant rented furniture and an apartment and on week-ends he drove back and forth from Rochester to his family in Mississauga, Ontario. His Employer reimbursed him for all of this and for his vehicle mileage to and from Mississauga. In 1999 this amounted to the $37,166.63 Canadian at issue.
[6] The contract specified that the Appellant's salary was to be "$274.46 per day (260 days for $71,437.88 per annum)" - U.S. (R-2, Schedule, p. 6). However, the Employer would not execute a form "W-2" for Revenue Canada's purposes.
[7] Despite the lack of the appropriate form, the sum of $37,166.63 in dispute appears to fall within the provision of paragraph 6(6)(a) of the Income Tax Act ("Act"), which reads:
Employment at special work site or remote location
(6) Notwithstanding subsection (1), in computing the income of a taxpayer for a taxation year from an office or employment, there shall not be included any amount received or enjoyed by the taxpayer in respect of, in the course or by virtue of the office or employment that is the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses the taxpayer has incurred for,
(a) the taxpayer's board and lodging for a period at
(i) a special work site, being a location at which the duties performed by the taxpayer were of a temporary nature, if the taxpayer maintained at another location a self-contained domestic establishment as the taxpayer's principal place of residence,
(A) that was, throughout the period, available for the taxpayer's occupancy and not rented by the taxpayer to any other person, and
(B) to which, by reason of distance, the taxpayer could not reasonably be expected to have returned daily from the special work site, or ...
In French, the same paragraph reads:
Emploi sur un chantier particulier ou en un endroit éloigné
(6) Malgré le paragraphe (1), un contribuable n'inclut, dans le calcul de son revenu tiré, pour une année d'imposition, d'une charge ou d'un emploi, aucun montant qu'il a reçu, ou dont il a joui, au titre, dans l'occupation ou en vertu de sa charge ou de son emploi et qui représente la valeur des frais -- ou une allocation (n'excédant pas un montant raisonnable) se rapportant aux frais -- qu'il a supportés pour:
a) sa pension et son logement, pendant une période donnée:
(i) soit sur un chantier particulier qui est un endroit où le travail accompli par lui était un travail de nature temporaire, alors qu'il tenait ailleurs et comme lieu principal de résidence, un établissement domestique autonome:
(A) d'une part, qui est resté à sa disposition pendant toute la période et qu'il n'a pas loué à une autre personne,
(B) d'autre part, où on ne pouvait raisonnablement s'attendre à ce qu'il retourne quotidiennement étant donné la distance entre l'établissement et le chantier,
[8] The Appellant was hired to work at the Employer's place of business in Malvern, Pa. The Employer's business was to place experts, such as the Appellant, temporarily with other firms at their premises where the Employees would apply their expertise to the problems at hand for a temporary period. The Employer would reimburse the Appellant for his board and lodging. That is what happened when the Appellant was assigned and transferred to Rochester, New York.
[9] Subparagraph 6(6)(a)(i) allows the expenses for "the taxpayer's board and lodging for a period at ... a special work site". Using The Oxford English Dictionary, 2nd Ed. definitions of the words "special work site": A "special" place is an unusual or exceptional place. To work is to perform or execute one's task. A site is a place. Thus the English version of the paragraph refers to an unusual place where an employee does his or her task. In this case the work site was established in evidence to be another firm's plant or factory in Rochester, New York, at which the Appellant performed temporary duties for a limited period of time. For that purpose his Employer paid for his board and lodging. The Appellant was initially hired to work at the Employer's place of business at Malvern, Pa. He went there to work and was assigned to another firm's premises in Rochester, New York. That in itself would be an unusual work place for an employee of a business. The fact that the Employer agreed to pay for his food, lodging and mileage in respect to this work establishes that the Employer considered it to be so.
[10] In comparison with the foregoing, the French version of subparagraph (6)(a)(i) describes:
a) sa pension et son logement, pendant une période donnée:
(i) soit sur un chantier particulier qui est un endroit où le travail accompli par lui était un travail de nature temporaire, alors qu'il tenait ailleurs et comme lieu principal de résidence, un établissement domestique autonome:
...
Le Grand Robert de la langue Française, 2nd Ed. describes "un chantier" as having the meaning described by Dussault, J. of this Court in Guilbert v. Canada, 91 DTC 737 and 740 being, for example, a remote construction site where employees' board and room are supplied on the premises.
[11] The English words "special work site" have a much broader meaning than the French version. Section 13 of The Official Languages Act, Chapter 0-3.01 S.C. reads:
|
Both versions simultaneous and equally authoritative 13. Any journal, record, Act of Parliament, instrument, document, rule, order, regulation, treaty, convention, agreement, notice, advertisement or other matter referred to in this Part that is made, enacted, printed, published or tabled in both official languages shall be made, enacted, printed, published or tabled simultaneously in both languages, and both language versions are equally authoritative. |
Valeur des deux versions 13. Tous les textes qui sont établis, imprimés, publiés ou déposés sous le régime de la présente partie dans les deux langues officielles le sont simultanément, les deux versions ayant également force de loi ou même valeur. |
Thus, each language version is to be read and interpreted for its own meaning. As a result "special work site" is to be interpreted based upon its English meaning.
[12] The words "board and lodging" do not restrict the breadth of the meaning ascribed to "special work site". In particular, they are not the vernacular or traditional English phrase: "board and room". "Lodging" broadens the meaning of "board and lodging" to a remarkable extent. Lodging is defined in The Oxford English Dictionary, 2nd Ed. as "dwelling, abode ... to take up one's (temporary) abode". In the third definition it is in "hired rooms or in a lodging-house".
[13] In this day, when carpenters, oilfield roughnecks, nurses, mechanics, engineers, computer technicians, civil servants, judges, lawyers and people in all sorts of callings do temporary work at sites remote from their homes or their places of business, a special work site is not the northern bush or a construction camp. A special work site may be any place in the world, including a large metropolitan city such as Toronto, New York or New Delhi; or it may be a place such as Afghanistan or Rochester, New York. Expertise in the modern world has become a contractual commodity for which the contract - like the Appellant's contract of employment - is not for a lifetime. Rather, it is often from job to job at work places other than the employer's place of business, that is, at "special work sites" such as where the Appellant worked in Rochester, New York.
[14] The appeal is allowed. The Appellant is awarded costs of $100 on account of his out of pocket disbursements for items such as postage and copying which were incurred to prosecute the appeal.
Signed at Ottawa, Canada this 4th day of February, 2002.
|
"D.W. Beaubier" |
J.T.C.C.
COURT FILE NO.: 2001-2555(IT)I
STYLE OF CAUSE: Syed Hassan Jaffar V. Her Majesty the Queen
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: January 25, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge D.W. Beaubier
DATE OF JUDGMENT: February 4, 2002
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Jocelyn Espejo Clarke
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-2555(IT)I
BETWEEN:
SYED HASSAN JAFFAR,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on January 25, 2002 at Toronto, Ontario by
the Honourable Judge D.W. Beaubier
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Jocelyn Espejo Clarke
JUDGMENT
The appeal from the reassessment made under the Income Tax Act for the 1999 taxation year is allowed, and the reassessment is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Costs are awarded to the Appellant in the sum of $100 on account of out of pocket disbursements incurred in prosecuting this appeal.
Signed at Ottawa, Canada this 4th day of February, 2002.
|
"D.W. Beaubier" |
J.T.C.C.