Date: 20021209
Docket: 2001-4495-IT-I
BETWEEN:
DARRELL PETROWSKY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Little, J.
A. FACTS
[1] In 1996 the Appellant established a business of leasing snowmobiles in Yorkton, Saskatchewan. The Appellant purchased snowmobiles and leased the snowmobiles to various customers on a daily or weekly basis.
[2] From 1996 to 1999 the Appellant reported rental income, expenses and losses as follows:
Income Expenses Losses
1996 $ 2,739.00 $ 3,902.00 ($ 1,163.00)
1997 6,593.00 11,713.00 ( 5,120.00)
1998 5,675.00 11,507.52 ( 5,832.52)
1999 4,716.28 14,417.19 ( 9,700.91)
[3] Because of the continual losses suffered by the Appellant the snowmobile rental business was discontinued in 2002.
[4] The Minister of National Revenue (the "Minister") reassessed the Appellant's 1998 and 1999 taxation years.
[5] In reassessing the Appellant's 1998 taxation year the Minister disallowed the business loss of $5,832.52.
[6] In reassessing the Appellant's 1999 taxation year the Minister reduced the business loss claimed by the Appellant from $9,700.91 to a business loss of $744.54.
B. ISSUE
[7] Is the Appellant entitled to deduct business losses of $5,832.52 and $9,700.91 in determining his income for the 1998 and 1999 taxation years respectively?
C. ANALYSIS
[8] The Appellant testified that in the 1998 and 1999 taxation years he incurred various expenses in an attempt to establish a profitable snowmobile rental business.
[9] I have carefully considered the Appellant's testimony and I have concluded that the following additional expenses should be allowed:
AMOUNTS TO BE ALLOWED
Expenses: 1998 1999
Advertising $ 42.80
Meals and Entertainment - $ 149.45
Office Expenses 1,214.95
Supplies 1,238.72
Travel 75.82 503.05
[10] With respect to capital cost allowance the following items should be added to the C.C.A. Schedule with no personal element recognized:
Computer $ 1,135.50
Garage Heater 1,916.13
Cellular Telephone 399.00
[11] I believe that the Minister is correct in moving the garage heater from Class 8 to Class 1.
[12] The Minister of National Revenue is instructed to reassess the Appellant's 1998 and 1999 taxation years to allow the amountS as noted above.
Signed at Vancouver, British Columbia, this 9th day of December 2002.
|
"L.M. Little" |
J.T.C.C.
COURT FILE NO.: 2001-4495(IT)I
STYLE OF CAUSE: Darrell Petrowsky and
Her Majesty the Queen
PLACE OF HEARING: Regina, Saskatchewan
DATE OF HEARING: November 22, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge L.M. Little
DATE OF JUDGMENT: December 9, 2002
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Anne Jinnouchi
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-4495(IT)I
BETWEEN:
DARRELL PETROWSKY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on November 22, 2002, at Regina, Saskatchewan, by
the Honourable Judge L.M. Little
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Anne Jinnouchi
JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1998 and 1999 taxation years are allowed, without costs, and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 9th day of December 2002.
|
"L.M. Little" |
J.T.C.C.