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Source: 2008fca370
[2009] 2 F.C.R. D-8

Income Tax

Income Calculation

Appeal from Tax Court of Canada decision (2008 TCC 243) dismissing appeal of income tax assessment—Whether Tax Court Judge erred in concluding Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 8(1)(b) not permitting deduction for legal expenses incurred by appellant to defend derivative action for alleged breaches of statutory, fiduciary obligations in which central issue reasonableness of remuneration caused to be paid to himself—Tax Court Judge correctly rejecting broad interpretation of s. 8(1)(b) proposed on behalf of appellant—S. 8(1)(b) having relatively narrow scope, not intended to permit legal expenses to be deducted when incurred in litigation involving claim for damages concerning disputes other than those arising from terms of employment, merely because defendant’s entitlement to particular remuneration element of claim—Appeal dismissed.

Fenwick v. Canada (A-235-08, 2008 FCA 370, Sharlow J.A., judgment dated November 26, 2008, 7 pp.)