[2011] 4 F.C.R. D-3
Income Tax
Reassessment
Appeals from two Tax Court of Canada (T.C.C.) decisions dated June 19, 2009, determining that Minister of Revenue correctly including sum of $305 000 in reassessment of appellant’s income, dismissing motion to vary—Appellant operating camp, air charter company—Income tax return indicating that company cashing in $305 000 investment—Canada Customs and Revenue Agency (CCRA) requesting certain books, records from company for proper review—Company accountant providing only schedule, term deposit certificates, shareholders’ loan account, balance sheets—CCRA increasing appellant’s income by $305 000—Appellant’s review of tax return revealing accounting error, $305 000 investment not existing—T.C.C. concluding that appellant not “destroying” Minister’s assumptions—Stating that quality of evidence insufficient to support granting of appellant’s appeal—Whether T.C.C. making reviewable error in concluding that appellant receiving $305 000 from company as shareholder’s benefit—T.C.C. erring in dismissing appellant’s appeal, in finding that appellant failing to meet burden of “demolishing” Minister’s assumptions—Hickman Motors Ltd. v. Canada, [1997] 2 S.C.R. 336 establishing that initial burden only to “demolish” exact assumptions made by Minister, no more—Appellant meeting burden when making prima facie case—T.C.C. confusing appellant’s onus to “demolish” Minister’s assumptions by adducing evidence supporting position on prima facie basis with overall burden resting on parties to prove that investment paid or not paid to appellant—Minister adducing no evidence demonstrating that appellant receiving $305 000—T.C.C. looking for positive evidence that appellant not receiving $305 000—T.C.C. also erring in not considering accountant’s evidence—Such error caused by mistaken view that, without support of source documents, accountant’s testimony not helping appellant in making out case—Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1 not requiring appellant to produce source documents—Whether documents required or not depending on particular circumstances of case—Nothing in case law supporting T.C.C.’s view that oral evidence not sufficient to establish what it is intended to establish—Accountant’s evidence sufficient to demonstrate on prima facie basis that company holding no investment, not transferring sum to appellant—No need herein to decide issues raised by second appeal—Appeal allowed.
House v. Canada (A-261-09, A-262-09, 2011 FCA 234, Nadon J.A., judgment dated August 11, 2011, 31 pp.)