Edmonton Plaza Hotel Ltd. v. MNR, (1987) 13 F.T.R. 101 (TD)

CourtFederal Court (Canada)
Case DateFebruary 19, 1987
JurisdictionCanada (Federal)
Citations(1987), 13 F.T.R. 101 (TD)

Edmonton Plaza Hotel Ltd. v. MNR (1987), 13 F.T.R. 101 (TD)

MLB headnote and full text

Edmonton Plaza Hotel (1980) Limited v. Minister of National Revenue

(No. T-1607-84)

Indexed As: Edmonton Plaza Hotel (1980) Ltd. v. Minister of National Revenue

Federal Court of Canada

Trial Division

Jerome, A.C.J.

August 14, 1987.

Summary:

A hotel decided to construct an addition to add 72 rooms. In order to obtain a development permit, the hotel was required to pay the city $216,000.00 in lieu of increased parking requirements. The Minister of National Revenue assessed the $216,000.00 as an eligible capital expenditure. The hotel claimed it was either a current revenue expense or part of the capital cost of the building.

The Federal Court of Canada, Trial Division, held that the $216,000.00 was part of the capital cost of the building and remitted the matter to the Minister for assessment on that basis.

Income Tax - Topic 1004

Income from business or property - Application of generally accepted accounting principles - The Federal Court of Canada, Trial Division, stated that generally accepted accounting principles should normally be applied for taxation purposes, because they represent the true picture of a corporation's loss or profit for a given year - Generally accepted accounting principles should not be departed from unless the Income Tax Act requires it - See paragraph 14.

Income Tax - Topic 1127

Income from business or property - Deductions - Expenses - General - A hotel decided to expand its facilities - To obtain a development permit the hotel was required to pay the city $216,000.00 in lieu of its obligation to provide increased parking - The Minister assessed the $216,000.00 as an eligible capital expenditure under s. 14(5) of the Income Tax Act - The hotel claimed the $216,000.00 was either a current revenue expense (s. 18(1)) or part of the capital cost of the building (s. 20(1)(a)) - The Federal Court of Canada, Trial Division, held that the $216,000.00 was not a business expense under s. 18(1)(a), because it was of a purely capital nature - The court held that it was also not an eligible capital expenditure under s. 14(5), because it formed part of the cost of acquiring tangible property and was therefore excluded under s. 14(5) - The court held that the $216,000.00 was part of the capital cost of the building under s. 20(1)(a).

Income Tax - Topic 1178

Income from business or property - Deductions - Capital cost allowance - "Capital cost" - What constitutes - [See Income Tax - Topic 1127 above].

Income Tax - Topic 6765

Computation of tax - Rules for corporations - Definitions - Eligible capital expenditure - [See Income Tax - Topic 1127 above].

Cases Noticed:

Sun Newspapers Ltd. et al. v. Fed. Com. of Taxation (1938), 61 C.L.R. 337, refd to. [para. 12].

Canada Starch Co. Ltd. v. M.N.R., [1969] 1 Ex. C.R. 96; [1968] C.T.C. 466; 68 D.T.C. 5320, refd to. [para. 12].

B.P. Australia Ltd. v. Commissioner of Taxation of the Commonwealth of Australia, [1966] A.C. 224; [1965] 3 All E.R. 209, refd to. [para. 12].

Commissioner of Taxes v. Nchanger Consolidated Copper Mines, [1964] A.C. 948, refd to. [para. 12].

British Columbia Electric Railway Limited v. M.N.R., [1958] S.C.R. 133; [1958] C.T.C. 21; 58 D.T.C. 1022, refd to. [para. 12].

Hallstroms Pty Ltd. v. Federal Commissioner of Taxation (1946), 72 C.L.R. 634, refd to. [para. 12].

Oxford Shopping Centre Ltd. v. The Queen, [1980] C.T.C. 7 (F.C.T.D.), affd. [1981] C.T.C. 128 (F.C.A.), refd to. [para. 12].

Minister of National Revenue v. Metropolitan Properties Co. Ltd., [1985] 1 C.T.C. 169; 85 D.T.C. 5128, refd to. [para. 14].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 14(5)(b), sect. 18(1), sect. 20(1)(a) [para. 10].

Counsel:

L.A. Green, for the plaintiff;

D.D.G. Reynolds, for the defendant.

Solicitors of Record:

Thorsteinsson, Mitchell, Little, O'Keefe and Davidson, Vancouver, British Columbia, for the plaintiff;

F. Iacobucci, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the defendant.

This action was heard on February 19, 1987, at Edmonton, Alberta, before Jerome, A.C.J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on August 14, 1987.

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1 practice notes
  • MHL Holdings Ltd. v. Minister of National Revenue, (1988) 21 F.T.R. 65 (TD)
    • Canada
    • Canada (Federal) Federal Court (Canada)
    • 20 mai 1988
    ...Co. Limited (1985), 85 D.T.C. 5128, refd to. [para. 40]. Edmonton Plaza Hotel (1980) Limited v. Minister of National Revenue (1987), 13 F.T.R. 101; 87 D.T.C. 5371, refd to. [para. Statutes Noticed: Income Tax Act, S.C. 1970-71-72, c. 63, sect. 18(1)(b), sect. 20(1)(a) [para. 14]. Authors an......
1 cases
  • MHL Holdings Ltd. v. Minister of National Revenue, (1988) 21 F.T.R. 65 (TD)
    • Canada
    • Canada (Federal) Federal Court (Canada)
    • 20 mai 1988
    ...Co. Limited (1985), 85 D.T.C. 5128, refd to. [para. 40]. Edmonton Plaza Hotel (1980) Limited v. Minister of National Revenue (1987), 13 F.T.R. 101; 87 D.T.C. 5371, refd to. [para. Statutes Noticed: Income Tax Act, S.C. 1970-71-72, c. 63, sect. 18(1)(b), sect. 20(1)(a) [para. 14]. Authors an......

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