INCOME TAX |
Reassessment |
Canada v. Irving Oil Ltd.
A-513-00
2001 FCA 364, Sharlow J.A.
27/11/01
8 pp.
Appeal from T.C.C. decision (Irving Oil Ltd. v. Canada (2000), D.T.C. 2164) interest received by respondent on income tax refund income from active business, resulting in greater tax credit--T.C.J. did not accept Crown's argument refund interest cannot possibly be business income, reasoning that error by Minister in assessing should not prejudice taxpayer's normal and intended course of action with respect to monies used to pay assessments issued as result of error-- Appeal dismissed--Principle that expenditures made in contesting income tax assessment not expenditures made to earn income not applicable herein--If no such thing as refund interest, respondent might well have chosen to provide security for disputed assessments rather than paying them, with result probably would have made business profits from use of its money for many years it took to resolve dispute--Recent cases standing for proposition that, for income tax purposes, advantage flowing exclusively from provisions of Income Tax Act not income not applicable herein as taxpayer herein not attempting to derive profit from tax deductions or tax credits in Act--Simply paid outstanding tax liability--Ensite Limited v. R., [1986] 2 S.C.R. 509 not standing for proposition right to tax refund cannot represent property employed or risked in business because right to refund contingent on success of objection or appeal--Income Tax Act, S.C. 1970-71-72, c. 63.