Geophysical Engineering Ltd. v. Minister of National Revenue, (1974) 6 N.R. 563 (FCA)

JudgeThurlow and Urie, JJ. and MacKay, D.J.
CourtFederal Court of Appeal (Canada)
Case DateNovember 29, 1974
JurisdictionCanada (Federal)
Citations(1974), 6 N.R. 563 (FCA)

Geophysical Eng. Ltd. v. MNR (1974), 6 N.R. 563 (FCA)

MLB headnote and full text

Geophysical Engineering Ltd. v. Minister of National Revenue

Indexed As: Geophysical Engineering Ltd. v. Minister of National Revenue

Federal Court of Appeal

Thurlow and Urie, JJ. and MacKay, D.J.

November 29, 1974.

Summary:

This case arose out of a claim by a taxpayer for an exemption pursuant to s. 83 of the Income Tax Act. The taxpayer claimed exemption with respect to a profit realized on the sale of shares in a company. The taxpayer alleged that the shares were acquired from a prospector pursuant to an arrangement to pay for prospecting expenses and accordingly was exempt under s. 83 of the Income Tax Act. The alleged prospector was a full time employee of the taxpayer. The Tax Appeal Board dismissed an appeal by the taxpayer and held that the taxpayer was not entitled to the exemption claimed.

On appeal to the Trial Division of the Federal Court of Canada the appeal was dismissed and the judgment of the Tax Appeal Board was affirmed.

On appeal to the Federal Court of Appeal the appeal was dismissed and the judgment of the Trial Division was affirmed. The Federal Court of Canada stated that the alleged prospector did not prospect on his own behalf or on his own behalf and for others as required by s. 83 of the Income Tax Act. The Federal Court of Appeal stated that the prospector was a full time employee of the taxpayer and, accordingly, the taxpayer did not have a contract with a prospector as defined in s. 83 of the Income Tax Act.

Income Tax - Topic 7531

Exemptions - Income from contracts with prospectors - What constitutes a prospector - Income Tax Act, s, 83 - The taxpayer claimed an exemption with respect to a profit on the sale of shares - The taxpayer alleged that the shares were acquired from a prospector pursuant to an arrangement to provide prospecting expenses - The Federal Court of Appeal held that the alleged prospector did not prospect on his own behalf or on his own behalf and for others as required by s. 83 of the Income Tax Act - The Federal Court of Appeal stated that the prospector was a full time employee of the taxpayer - The Federal Court of Appeal dismissed the taxpayer's claim for an exemption.

Words and Phrases

Prospector - The Federal Court of Appeal discussed the meaning of the word "prospector" as found in s. 83 of the Income Tax Act.

Cases Noticed:

Foster v. M.N.R., [1971] C.T.C. 335, folld. [paras. 4, 11].

David T. Winchell v. Minister of National Revenue, [1974] C.T.C. 177, dist. [para. 11].

Marketing Investigations Limited v. Minister of Social Security, [1969] 2 Q.B. 173, folld. [para. 15].

Statutes Noticed:

Income Tax Act, R.S.C. 1952, c. 148, sect. 83.

Counsel:

D.J. Wright, Q.C. and N. Waterman, for the appellant;

N.A. Chalmers, Q.C. and J.R. Power, for the respondent.

This appeal was heard by the Federal Court of Appeal at Toronto, Ontario on November 26, 27, 28 and 29, 1974. Judgment was delivered by the Federal Court of Appeal on November 29, 1974 and the following opinions were filed:

THURLOW, J. - see paragraphs 1 to 8.

URIE, J. - see paragraphs 9 to 16.

MacKAY, D.J. concurred with both THURLOW, J. and URIE, J.

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