A-79-73
J & J Hotels Ltd. (Appellant)
v.
Minister of National Revenue (Respondent)
Court of Appeal, Jackett C.J., Pratte and Urie
JJ.—Vancouver, September 5 and 6, 1974.
Income tax—Expenses of company—Agreement by hotel
to pay employee of associated garage for washing cars—
Profits used to write off losses of prior years—Not bona fide
business expenses—Not deductible—Income Tax Act, ss.
12(1)(g), 12(2), 137(1).
An appeal by the taxpayer from the judgment of the Trial
Division ([1973] F.C. 369) was dismissed by the Court on
the single ground that the agreement in issue fell within the
scope of section 137(1) of the Income Tax Act.
APPEAL.
COUNSEL:
W. A. Esson for appellant.
T. E. Jackson, Q.C., for respondent.
SOLICITORS:
Bull, Housser & Company, Vancouver, for
appellant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment of
the Court delivered in English.
This is an appeal from a judgment of the Trial
Division [[1973] F.C. 369] dismissing an appeal
from an assessment under Part I of the Income
Tax Act for the taxation year 1967 subject to a
reference back for a modification in favour of
the appellant.
Without expressing any opinion concerning
any of the other grounds upon which the
learned Trial Judge based his judgment, we
agree with his holding, in effect, that the agree
ment of July 15, 1964 between J & J Hotels
Ltd. and Vernon Motors Limited (pursuant to
which the disbursements in issue were made)
falls within the scope of subsection (1) of sec
tion 137 of the Income Tax Act; and we are,
therefore, of opinion that the appeal should be
dismissed with costs.
There is no cross-appeal and we, therefore,
express no opinion concerning the correctness
of that part of the judgment appealed from that
directs a modification in the assessment.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.