Date: 20010327
Docket: 2000-219-IT-I,
2000-220-IT-I
BETWEEN:
JEAN-CLAUDE DUMAIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
(Delivered orally from the bench on
October 30, 2000, at Montreal, Quebec,
and edited for greater clarity.)
Archambault, J.T.C.C.
[1] Jean-Claude Dumais is challenging assessments made by the Minister of National Revenue (the Minister) for the 1997 and 1998 taxation years. With respect to the 1997 taxation year, the Minister included in Mr. Dumais's income an amount of $39,924.68 as pension income and an amount of $340 as interest income for a total of $40,264.68. At the outset of the hearing, counsel for the respondent informed the Court that the $39,924.68 amount should be excluded from the taxpayer's income since it was a mistake on the part of the Manufacturers Life Insurance Company, which had prepared the T5 form. Accordingly, the matter in dispute would appear to be restricted to the $340 in interest that Mr. Dumais acknowledged receiving in 1997.
[2] For the 1998 taxation year, the Minister essentially accepted Mr. Dumais's income and taxable income as calculated by him in his tax return. However, according to Mr. Dumais's calculations, no tax was payable, whereas, according to the Minister's, the tax payable amounted to $564.61. If I understand correctly, Mr. Dumais claims, in the first place, that the inclusion in his income of the Old Age Security supplement, which amounted to $1,400.25, violated the [TRANSLATION] "rules of God" and in particular a rule that he described as the [TRANSLATION] "lever rule" ("règle du levier").[1] Second, according to him, the supplement should be added to the basic personal amount for the purposes of calculating the non-refundable tax credits.
[3] The evidence revealed that Mr. Dumais had included in his income supplements of $1,359 for 1997 and $1,400.25 for 1998 and had deducted them in computing his taxable income[2] for those years. Accordingly, the supplements paid under the Old Age Security Act were not in fact subject to income tax. The evidence further revealed that the Minister took into account not only the basic personal amount but also the age amount in calculating the non-refundable tax credits. In my opinion, for the purposes of computing tax, there is no provision in the Income Tax Act (the Act) that permits a second deduction-that is, a deduction in addition to that already allowed in the computation of taxable income-of the supplements of $1,359 for 1997 and $1,400.25 for 1998. To determine the accuracy of the Minister's computation of income tax, this Court must apply the Act and may not consider rules such as the "lever rule". Moreover, Mr. Dumais did not suggest any reason for excluding the $340 interest amount from his 1997 income. Consequently, the Minister correctly assessed the tax owing by Mr. Dumais in respect of the 1997 and 1998 taxation years.
[4] For all these reasons, Mr. Dumais's appeal in respect of the 1997 taxation year is allowed and the assessment is referred back to the Minister for reconsideration and reassessment on the basis that the amount of $39,924.68 should be excluded from Mr. Dumais's income, the whole without costs. The appeal in respect of the 1998 taxation year is dismissed.
Signed at Ottawa, Canada, this 27th day of March 2001.
|
"Pierre Archambault" |
J.T.C.C.
Translation certified true on this 19th day of September 2002.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
2000-220(IT)I
2000-219(IT)I
BETWEEN:
JEAN-CLAUDE DUMAIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on October 30, 2000, at Montreal, Quebec, by
the Honourable Judge Pierre Archambault
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Simon Petit
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1997 taxation year is allowed and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the amount of $39,924.68 must be excluded from the appellant's income for that year, the whole without costs.
The appeal from the assessment made under the Income Tax Act for the 1998 taxation year is dismissed, without costs.
Signed at Ottawa, Canada, this 9th day of November 2000.
|
"Pierre Archambault" |
J.T.C.C.
Translation certified true on this 19th day of September 2002.
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
[1] It should be noted that the position taken by Mr. Dumais both in his pleadings and in his oral argument was not very consistent. In 1997, he received a supplement of $1,359, but there was nothing in his Notice of Appeal with respect to that taxation year that might suggest that he was challenging the tax treatment of the supplement. However, as Mr. Dumais received the supplement during the two years at issue, I assumed that the argument raised in respect of the 1998 taxation year was being put forward for the 1997 taxation year as well.
[2] Line 250 of the 1997 and 1998 returns.