[OFFICIAL ENGLISH TRANSLATION]
Date: 20020610
Docket: 2001-1879(GST)I
BETWEEN:
JACQUES AUBÉ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
(Delivered orally from the bench on February 22, 2002, at Ottawa, Ontario, and revised in Ottawa, Ontario, on June 10, 2002.)
Lamarre, J.T.C.C.
[1] The appellant is appealing from an assessment made on March 19, 2001, by the Minister of National Revenue ("Minister") under Part IX of the Excise Tax Act ("Act") for the period from January 1, 1994, to December 31, 1996. It had been determined therein by means of the net worth method that the appellant had a tax liability of $1,260.36 under the Goods and Services Tax ("GST") system in connection with his business's unreported sales.
[2] On the day of the hearing, counsel for the respondent informed the Court that the amount was now reduced to $244.97. The appellant did not accept that amount. Rather, he argued that he was the one who was entitled to a refund. According to his calculations, the amount for personal expenses in the statement of net worth was too high. According to him, the amounts in question ($6,557 in 1994, $6,693 in 1995 and $6,693 in 1996) were included twice by the Department since they had also been recorded under the business's operating expenses.
[3] On cross-examination, the appellant nonetheless admitted that the entire personal portion of his expenses had not been recorded in the business's operating expenses in the statement of net worth. It was in fact shown that the Department had taken the amounts indicated in the appellant's tax returns, which did not include the personal portion. This was admitted at pages 41, 42, 48, 49, 51, 55, 56 and 57 of the transcript, in the following passages:
[TRANSLATION]
Pages 41 and 42
21 BY Me BOUCHER:
...
24 Q. I have your tax return here.
25 First, 1994. I do not have any other copies. These are
1 the Revenue Canada documents. Is this your tax
2 return?
3 A. Yes, I think I have one here.
4 Q. I have some questions.
5 A. All right.
Page 48
6 Q. So your personal expenses are
7 not included in the garage's activities?
8 A. I must admit you're right.
9 In looking at the page here, you're right, I apologize.
10 I don't . . .
11 Q. Are we looking at 1995 also?
12 A. 1995, yes.
Page 49
13 Q. For the garage, in 1995, there are no
14 personal expenses included, is that correct? We will
15 get to the rent later.
16 A. I would need to talk to the person
17 who prepared my tax returns. That is a fact. But
18 I don't . . .
Page 51
8 THE COURT: And that is what appears in
9 the net worth also.
10 So the personal portion does not appear under
11 the operating expenses for 1995.
...
17 THE COURT: But you admit, sir,
18 that this was not included in the operating expenses?
19 THE WITNESS: I admit it.
Page 55
10 BY Me BOUCHER:
11 Q. Same thing for 1996?
...
18 Q. There were no personal
19 expenses?
20 A. I have not seen them yet. "Total
21 tax deducted". . . I'm looking at 1994!
22 --- (brief pause)
23 I don't see any here.
Pages 56 and 57
22 THE COURT: Well then, sir, we see that the
23 operating expenses in Schedule A of the Statement of
24 Personal Net Worth do not include the personal
25 expenses since those amounts were taken
1 from your tax returns.
2 THE WITNESS: I agree.
[4] I therefore conclude that the operating expenses that appear in Schedule A of the statement of net worth (Exhibit A-1) do not include the personal expenses and reflect the amounts reported in the appellant's tax returns. Therefore, the personal expenses were not recorded twice.
[5] Although the appellant stated that there were a number of errors in the statement of net worth, it seems that those errors had been corrected by the respondent in arriving at a final figure of $244.97 as the tax payable in connection with the business's unreported sales. At least, the appellant was unable to convince me otherwise.
[6] For these reasons, it is my view that the appeal should be allowed to take into account the last change made by the respondent's counsel at the hearing. The amount of the tax liability under the GST system for the period from January 1, 1994, to December 31, 1996, in connection with the understated sales of the appellant's business is therefore $244.97.
Signed at Ottawa, Canada, this 10th day of June 2002.
|
"Lucie Lamarre" |
J.T.C.C.
Translation certified true
on this 28th day of August 2003.
Sophie Debbané, Revisor