Dresden Farm Equipment Ltd. v. Minister of National Revenue, (1986) 2 F.T.R. 92 (TD)

• Court: Federal Court (Canada)
• Case Date: April 10, 1985
• Jurisdiction: Canada (Federal)
• Citations: (1986), 2 F.T.R. 92 (TD)

Dresden Farm Equipment Ltd. v. MNR (1986), 2 F.T.R. 92 (TD)

MLB headnote and full text

Dresden Farm Equipment Ltd. v. Minister of National Revenue

(No. T-7017-82)

Indexed As: Dresden Farm Equipment Ltd. v. Minister of National Revenue

Federal Court of Canada

Trial Division

Jerome, A.C.J.

February 26, 1986.

Summary:

The Minister of National Revenue ruled that a farm equipment dealer was not eligible for an inventory allowance under s. 20(1)(gg) of the Income Tax Act. The Tax Review Board allowed the dealer's appeal. The Minister appealed.

The Federal Court of Canada, Trial Division, dismissed the appeal and affirmed that the dealer was eligible for the inventory allowance.

Income Tax - Topic 1145

Income from business or property - Deductions - Inventory allowance - Income Tax Act, S.C. 1970-71-72, c. 63, s. 20(1)(gg) - A farm equipment dealer claimed an inventory allowance on farm machinery kept as its stock in trade - Under its agreement with the manufacturer the equipment was on consignment, but the dealer had to make payments on it, had all the risk for it and could not return it - The Federal Court, Trial Division, held that the dealer was entitled to an inventory allowance calculated on the value of the machinery, because it acquired many of the attributes of ownership and in any event the machinery was part of the dealer's stock in trade, which was all that was required.

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 20(1)(gg) [para. 1]; sect. 248(1) [para. 10].

Counsel:

I. MacGregor and P. Lee, for the plaintiff Minister;

J.A. Giffen, Q.C., for the defendant.

Solicitors of Record:

Frank Iacobucci, Q.C., Deputy Attorney General of Canada, for the plaintiff;

Giffen, Pensa, London, Ontario, for the defendant.

This case was heard on April 10, 1985, at London, Ontario, before Jerome, A.C.J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on February 26, 1986: