International Nickel Co. of Canada Ltd. v. Minister of National Revenue, (1975) 7 N.R. 351 (SCC)

• Judge: Laskin, C.J.C., Judson, Ritchie, Beetz and de Grandpré, JJ.
• Court: Supreme Court (Canada)
• Case Date: November 13, 1975
• Jurisdiction: Canada (Federal)
• Citations: (1975), 7 N.R. 351 (SCC)

Intl. Nickel Co. v. MNR (1975), 7 N.R. 351 (SCC)

MLB headnote and full text

International Nickel Company of Canada Ltd. v. Minister of National Revenue

Indexed As: International Nickel Co. of Canada Ltd. v. Minister of National Revenue

Supreme Court of Canada

Laskin, C.J.C., Judson, Ritchie, Beetz and de Grandpré, JJ.

November 13, 1975.

Summary:

This case arose out of an assessment of income tax against a mining company and the method of calculation of the depletion allowance deducted by the mining company in computing its income. During the taxation year in question the taxpayer spent $4,363,280.00 on basic scientific research. The Minister in calculating the base figure for depletion allowance deducted the $4,363,280.00. Section 1201(2) of the Income Tax Regulations stated that the base figure for depletion allowance includes "profits for the taxation year reasonably attributable to the production of . . . prime metal". The company appealed the assessment to the Trial Division of the Federal Court of Canada. The company's appeal was allowed. The Trial Division held that the company did not have to deduct the $4,363,280.00 from the base figure on which the depletion allowance was calculated.

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 Appeal held that the scientific research expenses were not related to "profits for the taxation year reasonably attributable to the production of . . . prime metal".

On appeal to the Supreme Court of Canada the appeal was dismissed and the judgment of the Federal Court of Appeal was affirmed.

Income Tax - Topic 2782

Deductions in computing income - Depletion allowance - Computation of base figure on which depletion allowance was calculated - Whether scientific research expenses incurred by the taxpayer were related to "profits for the taxation year reasonably attributable to the production of . . . prime metal" - The Supreme Court of Canada held that the taxpayer did not have to deduct $4,363,280.00 from the base figure on which the depletion allowance was calculated - The Supreme Court of Canada held that the scientific research expenses were not related to profits "reasonably attributable to the production of . . . prime metal".

Words and Phrases

Reasonably attributable to the production of . . . Prime metal - The Supreme Court of Canada discussed the meaning of the phrase "reasonably attributable to the production of . . . prime metal" as found in section 1201(2) of the Income Tax Regulations.

Cases Noticed:

International Nickel Company of Canada Limited v. Minister of National Revenue, [1971] F.C. 213, refd to. [para. 4].

Statutes Noticed:

Income Tax Regulations, sect. 1201(2) [para. 1].

Counsel:

G.W. Ainslie, Q.C. and B.J. Wallace, for the appellant;

Stuart Thom, Q.C. and T.E. McDonnell, for the respondent.

This appeal was heard by the Supreme Court of Canada on March 24 and 25, 1975. Judgment was delivered by the Supreme Court of Canada on November 13, 1975.

The judgment of the Supreme Court of Canada was delivered by JUDSON, J.