Rudnikoff v. Minister of National Revenue, (1974) 7 N.R. 138 (FCA)

• Judge: Jackett, C.J., Hyde, D.J. and Choquette, D.J.
• Court: Federal Court of Appeal (Canada)
• Case Date: December 04, 1974
• Jurisdiction: Canada (Federal)
• Citations: (1974), 7 N.R. 138 (FCA)

Rudnikoff v. MNR (1974), 7 N.R. 138 (FCA)

MLB headnote and full text

Rudnikoff v. Minister of National Revenue

Indexed As: Rudnikoff v. Minister of National Revenue

Federal Court of Appeal

Jackett, C.J., Hyde, D.J. and Choquette, D.J.

December 4, 1974.

Summary:

This case arose out of a taxpayer's claim for a deduction from the income from an office building. The office building was built on land owned by the Canadian National Railway. The Canadian National Railway granted an emphyteutic lease to a company which in turn sold its interest under the lease to the taxpayer. The taxpayer claimed a deduction for capital cost allowance as if the taxpayer owned the office building. The Minister of National Revenue assessed the taxpayer on the basis that the taxpayer's rights under the emphyteutic lease constituted a leasehold interest for purposes of capital cost allowance under the income tax regulations. On appeal by the taxpayer to the Tax Appeal Board the Minister's assessment was affirmed.

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.

Income Tax - Topic 1184

Income from property - Deductions from income for capital cost allowance - Whether the taxpayer was the absolute owner of an office building or the owner of a leasehold interest in the office building - The office building was built on land owned by the Canadian National Railway - The Canadian National Railway granted an emphyteutic lease to the taxpayer - The taxpayer claimed a deduction for capital cost allowance as if the taxpayer owned the office building - The Federal Court of Appeal held that the taxpayer's rights under the emphyteutic lease constituted a "leasehold interest" for the purpose of the Income Tax Act Regulations.

Words and Phrases

Leasehold interest - The Federal Court of Appeal discussed the meaning of the words "leasehold interest" as found in the Income Tax Act Regulations respecting capital cost allowance.

Statutes Noticed:

Income Tax Act Regulations, sect. 1100, sect. 1102 [fn. 1].

Counsel:

P. Vineberg, Q.C. and A. Ross, for the appellant;

A. Garon, Q.C. and W. Lefebvre, for the respondent.

This appeal was heard by the Federal Court of Appeal at Montreal, Quebec on December 4, 1974. Judgment was delivered by the Federal Court of Appeal on December 4, 1974 and the following judgments were filed:

JACKETT, C.J. - see paragraphs 1 to 4.

CHOQUETTE, D.J. - see paragraphs 5 and 6.

HYDE, D.J. - see paragraphs 7 to 16.