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FEDERAL INCOME TAX - Computation of tax - Charitable donation

Wednesday, June 12, 2019 @ 8:14 AM  

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Appeal by the taxpayer from the dismissal of his appeal from reassessment disallowing deductions claimed as charitable donations made to an organization co-founded by the appellant’s brother. The Tax Court judge was not satisfied that when making the payments, the appellant had the requisite donative intent for the payments to qualify as a gift. The judge found the appellant’s evidence as to whether he had the requisite intent to make a gift not to be credible. The judge also found a deposit for US$30,000, the amount of the donations, into the same bank account from which the payments were made as a basis for dismissing the appeal. Although the Minister had no knowledge of this particular deposit until the fact arose during examinations for discovery, the judge ruled that reliance on this fact by the Minister did not depart from the underlying basis of the reassessments that the appellant lacked donative intent.

HELD: Appeal dismissed. The question of how and why the deposit came into the account was highly relevant to whether the deduction was properly claimed. The appellant had notice that the deposit would form part of the Minister’s case at trial. The deposit was not a new theory or basis of reassessment but was additional, particularized evidence, in support of the Minister’s theory and did not require the Minister to amend her pleadings. The onus did not shift to the Minister based on the appellant’s simple assertion that he had the requisite intent.

Goheen v. Canada, [2019] F.C.J. No. 542, Federal Court of Appeal, D.W. Stratas, D.J. Rennie and J.B. Laskin JJ.A., May 1, 2019. Digest No. TLD-June102019006