Pan Ocean Oil Ltd. v. Canada
T-239-80
Jerome A.C.J.
30/7/93
14 pp.
Appeal from two reassessments in respect of plaintiff's 1974 and 1975 taxation years -- Plaintiff company created by way of amalgamation pursuant to corporate laws of Alberta -- BATA and PAN OCEAN engaged in acquisition, exploration and development of interests in oil, gas and other minerals -- Merger realized in four steps -- Pan Ocean Oil Ltd. (POOL), together with others, purchasing shares of group of companies known as Dynamic Companies -- Plaintiff company formed by statutory amalgamation of POOL and Pan Ocean (Alberta) Ltd. "ALBERTA" pursuant to provisions of Alberta Companies Act -- Whether, in computing income for 1974 and 1975 taxation years, plaintiff entitled to deduct Canadian exploration and development expenses incurred by Dynamic Companies before 1972 taxation and deductible by POOL as second successor corporation, and whether amalgamation of POOL and ALBERTA resulted in plaintiff being third successor corporation and therefore disentitled to deductions -- Income Tax Act, s. 87 applying to amalgamation of POOL and ALBERTA -- Under Act, ss. 66(6) to 66(9), known as "successor rules", successor corporation and second successor corporation entitled to deduct, within limits prescribed, unused deductions of predecessor corporation -- At corporate law, amalgamation transaction not constituting acquisition -- Plaintiff's right to make deductions maintained unless specifically prohibited by Act, ss. 66(6),(7) and 87(1),(2),(6) -- S. 66(6), (7) having no application here as successor rules apply only to acquisition of property and transactions herein not acquisition of property -- Plaintiff entitled to same resource expense deductions as was POOL-Appeal allowed -- Income Tax Act, S.C. 1970-71-72, c. 63, ss. 66(6),(7), 87(1),(2),(6) -- Alberta Companies Act, R.S.A. 1970, c. 60.