Rapistan Canada Ltd. v. Minister of National Revenue, (1974) 4 N.R. 409 (FCA)

• Judge: Jackett, C.J., MacKay, D.J.
• Court: Federal Court of Appeal (Canada)
• Case Date: June 24, 1974
• Jurisdiction: Canada (Federal)
• Citations: (1974), 4 N.R. 409 (FCA)

Rapistan Can. Ltd. v. MNR (1974), 4 N.R. 409 (FCA)

MLB headnote and full text

Rapistan Canada Ltd. v. Minister of National Revenue

Indexed As: Rapistan Canada Ltd. v. Minister of National Revenue

Federal Court of Appeal

Jackett, C.J., MacKay, D.J.

and Sweet, D.J.

June 24, 1974.

Summary:

This case arose out of an assessment of a corporate taxpayer and a disallowance of a claim for a deduction for capital cost allowance. The taxpayer claimed a capital cost allowance on "manufacturing, engineering, production, management and sales know-how, techniques, skills and experience" all of which was assigned to the taxpayer. The taxpayer's appeal to the Trial Division of the Federal Court of Canada was dismissed.

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 knowledge, skill and experience do not constitute "property" within the meaning of s. 11(1)(a) of the Income Tax Act and accordingly, such things did not constitute depreciable property.

Income Tax - Topic 1180

Income from a business - Deductions - Capital cost - What constitutes "property" which may be depreciated - Income Tax Act, s. 11(1)(a) - Whether "know-how, techniques, skills and experience", which were assigned by one company to another, constitute "property" - The Federal Court of Appeal held that knowledge, skill and experience did not constitute depreciable property.

Words and Phrases

Property - The Federal Court of Appeal discussed the meaning of the word "property" as found in s. 11(1)(a) of the Income Tax Act, R.S.C. 1952, c. 148.

Cases Noticed:

Moreau v. St. Vincent, [1950] Ex. C.R. 198, folld. [para. 8].

Statutes Noticed:

Income Tax Act Regulations, Schedule B, Class 14.

Income Tax Act, R.S.C. 1952, c. 148, sect. 11(1)(a), sect. 139(1)(ag) [para. 7].

Counsel:

W.D. Goodman, Q.C., for the appellant;

N.A. Chalmers, Q.C., and S. Pustogorod-Sky, for the respondent.

This appeal was heard by the Federal Court of Appeal at Toronto, Ontario on June 24, 1974. Judgment was delivered by the Federal Court of Appeal on June 24, 1974.

The judgment of the Federal Court of Appeal was delivered by JACKETT, C.J.