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Citation: 2003TCC108 |
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Date: 20030318 |
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Docket: 2002-2985(IT)I |
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BETWEEN: |
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DAVID DAHL, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
REASONS FOR JUDGMENT
(delivered orally from the Bench at
Vancouver, British Columbia on January 9, 2003)
Beaubier, J.T.C.C.
[1] This appeal pursuant to the Informal Procedure was heard at Vancouver, British Columbia on January 7, 2003. The Appellant testified. The Respondent called the auditor on the file, Bhupendra Gill, and the Appeals Officer, Ravinder Sandhu.
[2] On the Appellant's application, it is ordered that the address of the Appellant be changed to read 4948-196B Street, Langley, British Columbia, V3A 7N7.
[3] Paragraphs 5, 6 and 7 of the Reply to the Notice of Appeal read:
5. By Notice of Reassessment dated July 11, 2002, the Minister reassessed the Appellant's 2000 taxation year to decrease his net business income by $960.00 to $33,182.00 (the "Revised Net Business Income") as detailed on the attached Schedule "A".
6. In so assessing the Appellant, the Minister relied on the following assumptions of fact:
a) the Appellant in calculating his net business income claimed expenses for the activities of:
(i) selling of supplements for E.D. Internal Health (the "Supplements Activity"); and
(ii) for selling ice-cream in Cuba (the "Ice-cream Activity");
b) the Appellant's business operation was called Off Balance Marketing;
c) the Appellant did not commence the Ice-cream Activity;
d) the Appellant did not have any potential of earning income in the 2000 taxation year from the Ice-cream Activity;
e) the invoices provided by the Appellant for the purchase of an ice-cream machine were not issued in the Appellant's name;
f) the Appellant has not signed any binding contracts or obtained purchase commitments that would allow the Ice-cream Activity to commence in Cuba;
g) travel expenses claimed of $12,900 were claimed in respect of the Ice-Cream Activity;
h) charges for the basic telephone line for the Appellant's personal residence were not incurred to earn income from business or property;
i) charges in excess of 10% for long distance calls were personal;
j) the Appellant used a 1994 Dodge Caravan for both personal and business use;
k) the Appellant did not maintain a mileage log;
l) insurance expenses claimed were in respect to the Appellant's personal residence; and
m) expenses in excess of the amounts allowed by the Minister were not incurred or alternatively, if incurred were not incurred for the purpose of gaining or producing income from a business or property but were personal or living expenses of the Appellant.
B. ISSUE TO BE DECIDED
7. The issue is whether the Minister properly determined the Revised Net Business Income.
[4] Assumptions 6(a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l) and (m) were not refuted.
[5] In particular, respecting the Ice-cream Activity:
1. The Appellant claimed expenses personally which the Respondent denied because of a finding that as yet there was no business. On balance, the Court finds this to be correct.
2. However, the Court also finds that the evidence is that the Ice-cream Activity was not established to be the Appellant's. Based on the documents, it might have been owned by a corporation called Yoggi Inc. The Appellant claimed that he had unnamed joint venturers and refused to submit cheques or bank records because he did not want their identities known. He is an experienced businessman. He testified that Yoggi Inc. was not incorporated, it was just his trade name. The Court does not accept this testimony. An experienced businessman would not use a "corporate" name unless it was registered. On the basis of the vagueness of the Appellant's testimony and the variety of documents on the specific party attempting the "Ice-cream Activity", the Court finds that it may have been Yoggi Inc.'s or it may have been a partnership's or joint venture with others, but it was not the Appellant's personal activity.
[6] The Court also finds that the proposed expenses of the alleged activity in Cuba had a personal element of a vacation or similar personal activity in Cuba. In particular, the Appellant claimed expenses for his two children's trip to Cuba in 2000. That was not in any sense a business expense. It is fatal to any suggestion that there was no personal element. As a result, objectively the Court finds that no business was in place because:
1. There was no product as yet.
2. There was no contract or operation for the production of yoghurt cones.
3. There were no contracts after alleged promotions commencing in 1998.
4. There is still nothing and one proposed agency, Rumballs, was admittedly "on hold" for two years after 2000.
[7] With respect to the other expenses, the Appellant failed to prove any additional amounts that the Appeals Officer did not allow. In particular, he is an experienced commission salesman, yet he did not keep a vehicle log, he did not itemize and organize his alleged expenses by "vehicle", "entertainment", "gifts and promotion", et cetera. Rather, they were mixed up and filed in a manner that lacked credibility. He also failed to particularize his vehicle usage clearly between personal and business use.
[8] In total, his evidence was not credible. It was not sufficient to upset the clear and detailed findings of the Respondent in this case.
[9] The appeal is dismissed.
Signed at Ottawa, Canada this 18th day of March, 2003.
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"D. W. Beaubier" |
J.T.C.C.
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CITATION: |
2003TCC108 |
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COURT FILE NO.: |
2000-2985(IT)I |
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STYLE OF CAUSE: |
David Dahl v. The Queen |
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PLACE OF HEARING: |
Vancouver, British Columbia |
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DATE OF HEARING: |
January 7, 2003 |
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REASONS FOR JUDGMENT BY: |
The Honourable D.W. Beaubier |
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DATE OF REASONS FOR JUDGMENT: |
March 18, 2003 |
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APPEARANCES: |
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Counsel for the Appellant: |
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Counsel for the Respondent: |
Jasmine Sidhu |
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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: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |