INCOME TAX |
Corporations |
Boulanger v. Canada
A-539-02
2003 FCA 332, Létourneau J.A.
12/9/03
5 pp.
Two appeals involving same facts and issues (A-539-02 and A-540-02)--Both appellants attorneys and represented themselves--Single argument made for both cases-- Appellants challenging decision by Tax Court of Canada (T.C.C.) refusing deduction of their capital loss as allowable business investment loss within the meaning of Income Tax Act, s. 39(1)(c)--Act not defining concept of "active business"--Lack of organizational structure in appellants' business not sole evidence considered by T.C.C. to demonstrate absence of carrying on active business--Court examined certain key indicia of active business--Court concluded that during period in question, corporation was unable to conduct any major transaction with respect to type of business it was supposed to carry on--Corporation did not have any employees and had not done any market research or cost-benefit analysis--These findings supported by evidence --Furthermore, in 1994 and 1995 corporation derived no income from allegedly active business, while in 1993 it reported only modest income from property--Absence of business income not in itself determinative, but relevant--In context, T.C.C. justified in considering additional factor--Record disclosing that at time of disposition by appellants in 1996, corporation's only assets since 1992 had consisted of portion of vacant lot and residual balance from selling price of close to half property originally intended for operation of business--Difficult to understand how these two assets satisfy definition in Act, s. 248 as assets market value of which attributable to assets used in active business carried on in Canada--Appeals dismissed--Income Tax Act, R.S.C., 1985, 5th Supp., c. 1, ss. 39 (as am. by S.C. 1994, c. 7, Sch. II, s. 22), 248 (as am. idem, s. 192; idem, Sch. VIII, s. 139).