Date: 19971028
Docket: 96-3830-GST-I
BETWEEN:
HARRY R. BURKMAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Beaubier, J.T.C.C.
[1] This appeal pursuant to the Informal Procedure was heard at Toronto, Ontario on October 23, 1997. The Appellant testified. The Respondent called Astrid (Smith) Breedy, C.A., who was the appeals officer in the case and Elaine Ing, C.M.A., auditor.
[2] The Appellant, a lawyer, has appealed a Notice of Decision dated July 11, 1996, which is not exhibited. The Reply states that it concerns a Notice of Assessment for the periods:
(a) October 1, 1991 to December 31, 1991 and
(b) April 1, 1992 to December 31, 1994.
These particulars were not disputed in the evidence presented.
[3] The Appellant has disputed three matters:
1. His claim for a $1,000 transitional tax credit.
[4] The Appellant's first 1991 fiscal year end occurred before October, 1991. It was not in the assessment periods. Because it was not part of the periods of assessment appealed, the Court has no jurisdiction over this claim. It is dismissed.
2. His claim for a credit of $3,578.77 in respect of bad debts written off.
[5] This was respecting a 1991 account billed by the Appellant and claimed as a bad debt for the period ending December 31, 1991.
[6] The claim was denied because:
1. The appellant did not have a ledger recording his billings. Instead he had put his invoices together in a bound form.
2. The Appellant's method of writing this very large account (Mr. R.) off was to simply record the write-off on a sheet of paper.
[7] On the evidence, there is no doubt that this was a bad debt as of December 31, 1991, since the possibility of payment depended on the Appellant's success and it was clear by December 31, 1991 that there would not be any success.
[8] The Appellant's notes of write-off and his record respecting Mr. R.'s account are sufficient to constitute the write-off of Mr. R.'s account as a bad debt. The amount of Mr. R.'s account justifies the Appellant's claim under this heading.
[9] This item is allowed.
3. Penalty and Interest Credits disputed.
[10] The Respondent's system of penalty and interest credits was explained in detail by Mrs. (Smith) Breedy with the aid of Exhibit A-8. In the Court's view, that explanation is satisfactory and her description is correct in law.
[11] This item is dismissed.
[12] This matter is referred to the Minister of National Revenue for reconsideration and reassessment in accordance with these reasons.
[13] The Appellant was successful in more than one-half of the actual amount in dispute. He is awarded the sum of $100 costs on account of out of pocket disbursements in carrying out his appeal.
Signed at Ottawa, Canada, this 28th day of October, 1997.
"D.W. Beaubier"
J.T.C.C.