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Docket: 2004-2857(IT)I |
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BETWEEN: |
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MARIO TARDIF, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
[OFFICIAL ENGLISH TRANSLATION]
Appeal heard on November 3, 2004, at Sherbrooke, Quebec
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Before: The Honourable Justice Paul Bédard |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Benoît Mandeville |
____________________________________________________________________
JUDGMENT
The Appeal from the assessment made under the Income Tax Act for the 2000 taxation year is dismissed, in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 12th day of January 2005.
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"Paul Bédard" |
Bédard J.
Translation certified true
on this 13th day of April 2005
Aveta Graham, Translator
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Citation: 2005TCC10 |
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Date: 20050112 |
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Docket: 2004-2857(IT)I |
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BETWEEN: |
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MARIO TARDIF, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
BédardJ.
[1] In filing his income tax return for the 2000 taxation year, the Appellant deducted an allowable business investment loss (ABIL) of $36,624.59 ($48,832.79 x 75%) for the 2000 taxation year.
[2] Through the notice of reassessment dated October 2, 2003, for the 2000 taxation year, the Minister of National Revenue (the "Minister") made the following changes:
(i) He increased the business investment loss (BIL) by $4,000 in accordance with the Appellant's request, such that the BIL was established at $52,832.
(ii) He allowed the Appellant an ABIL deduction of $26,416, namely the ABIL of $52,832 times 50%. The Minister used the 50% rate to compute the ABIL since, under subsection 50(1) of the Income Tax Act (the "Act"), the Appellant is deemed to have disposed of his debt at the end of the 2000 taxation year and the rate in effect for computing the ABIL at the end of the year 2000 was 50%.
[3] On November, 26, 2003, the Appellant served on the Minister a notice of objection to the notice of reassessment dated October 2, 2003, for the 2000 taxation year.
[4] On March 31, 2004, the Minister affirmed the reassessment dated October 2, 2003, for the 2000 taxation year by relying on the reasons mentioned in paragraph 2 above.
Analysis
[5] The evidence has established that
(i) the Appellant was the sole shareholder of the company Distribution Mario Tardif Inc. (the "company");
(ii) the company operated a frozen products distribution business;
(iii) the company had been dissolved on May 2, 2000;
(iv) the Appellant had paid, during the period from May 1999 to December 31, 1999, the company's debts that totalled $19,639.18; that amount had been treated like a loan from the Appellant to the company;
(v) during the period from January 1, 2000, to April 30, 2000, the Appellant had paid the company's debts that totalled $16,664.07; that amount had been treated like a loan from the Appellant to the company;
(vi) In March 2002, the Appellant had paid $16,529 to a financial institution as guarantor of a loan contracted by the company with that institution.
Appellant's position
[6] The Appellant first submitted that part of the debts ($19,639.18) owed to him by the company on December 31, 1999, was unrecoverable on that date. In that regard, he argued that although the company was dissolved on May 2, 2000, it had been inoperative on December 31, 1999, and that he was therefore entitled to claim, for his 1999 taxation year, a BIL with regard to those debts.
[7] I must first point out that the Appellant has not established that the debt of $19,639.18 was unrecoverable on December 31, 1999. If he had persuaded me of that fact, I would have reduced the BIL accordingly for his 2000 taxation year, without being able to allow him the loss incurred during his 1999 taxation year because only the appeal concerning the 2000 taxation year is before me. I would add that the Appellant could no longer claim that loss in his 1999 taxation year because the time limits for doing so have probably run out.
[8] The Appellant submitted that the loss had been incurred during the dissolution of the company, on May 2, 2000, thus between February 27, 2000, and October 18, 2000. He then argued that section 38 of the Act states that the rate in effect at the time for computing the ABIL was 66.66% and not 50%.
[9] In my view, it is clear that under subsection 50(1) of the Act, the Appellant is deemed to have disposed of his debt on December 31, 2000, and that the rate in effect for computing the ABIL at the end of the year 2000 was 50% and not 66.66% as the Appellant claims is the case pursuant to paragraph 38(c) of the Act.
[10] For those reasons, the appeal is dismissed.
Signed at Ottawa, Canada, this 12th day of January 2005.
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"Paul Bédard" |
Bédard J.
Translation certified true
on this 13th day of April 2005
Aveta Graham, Translator
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CITATION: |
2005TCC10 |
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COURT FILE NO.: |
2004-2857(IT)I |
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STYLE OF CAUSE: |
Mario Tardif v. H.M.Q. |
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PLACE OF HEARING: |
Sherbrooke, Quebec |
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DATE OF HEARING: |
November 3, 2004 |
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REASONS FOR JUDGMENT BY: |
The Honourable Justice Paul Bédard |
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DATE OF JUDGMENT: |
January 12, 2005 |
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APPEARANCES: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Benoît Mandeville |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
John H. Sims Deputy Attorney General of Canada Ottawa, Canada |