INCOME TAX |
Income Calculation |
Beauport (Ville) v. M.N.R.
A-756-99
2001 FCA 198, Noël J.A.
11/6/01
12 pp.
Application for judicial review of TCC decision upholding MNR's decision to deduct employers' premiums with respect to travel allowances applicant had paid employees--Applicant argued that travel allowances calculated were reasonable and merely compensated employees for expenses incurred for use of motor vehicles in course of their duties--T.C.J. disposed of case by relying on Income Tax Act, s. 6(1)(b)(x)--Required to take into account presumption created by provision to determine whether allowances reasonable pursuant to Act, s. 6(1)(b)(vii.1)--Applicant disregarded fact what differentiates allowance from reimbursement for expenses: nature of amounts paid and not period during which amounts calculated--Allowance determined regardless of actual costs seeks to compensate and if recipients must establish that entitled to that amount, not required to account for expenditure--Reimbursement for expenses however determined on basis of actual costs incurred and requires proof of expenditures--Judge below justified in finding presumption under s. 6(1)(b)(x) applicable, consequently allowances paid by applicant deemed not reasonable--Applicant's scheme meeting requirement of neither s. 6(1)(b)(x) of Act nor of s. 6(1)(b)(vii.1) in which only "reasonable" allowances can be excluded when calculating income--Application dismissed--Income Tax Act, R.S.C., 1985, (5th Supp.) c. 1, s. 6 (as am. by S.C. 1994, c. 7, Sch. II, s. 3; idem, Sch. VIII, s. 1; 1994, c. 21, s. 2; 1995, c. 3, s. 1; c. 21, s. 1; 1997, c. 10, s. 267; 1998, c. 19, s. 68; 1999, c. 22, s. 2).