Toronto College Park Ltd. v. Minister of National Revenue, (1998) 222 N.R. 189 (SCC)

• Judge: Gonthier, Cory, Iacobucci, Major and Bastarache, JJ.
• Court: Supreme Court (Canada)
• Case Date: February 12, 1998
• Jurisdiction: Canada (Federal)
• Citations: (1998), 222 N.R. 189 (SCC);1998 CanLII 847 (SCC);146 FTR 159;[1998] 2 CTC 78;[1998] 1 SCR 183;222 NR 189;155 DLR (4th) 285;52 DTC 6088

Toronto College Park Ltd. v. MNR (1998), 222 N.R. 189 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [1998] N.R. TBEd. FE.016

Toronto College Park Limited (appellant) v. Her Majesty The Queen (respondent)

(25559)

Indexed As: Toronto College Park Ltd. v. Minister of National Revenue

Supreme Court of Canada

Gonthier, Cory, Iacobucci, Major

and Bastarache, JJ.

February 12, 1998.

Summary:

Toronto College Park Ltd. (TCPL) appealed reassessments by the Minister of National Revenue under ss. 169 and 172(2) of the Income Tax Act. The reassessments concerned, inter alia, the proper timing of the deductions of certain tenant inducement payments made by TCPL in 1983.

The Federal Court of Canada, Trial Di­vision, in a decision reported 71 F.T.R. 30, allowed deduction of the full amount of the tenant inducement payments in 1983. The Minister appealed.

The Federal Court of Appeal, in a judg­ment reported 199 N.R. 147, allowed the appeal, set aside the trial decision and remitted the matter to the Minister for recon­sideration and reassessment in a manner consistent with the Court of Appeal's rea­sons. TCPL appealed.

The Supreme Court of Canada allowed the appeal and restored the judgment of the Trial Division.

Income Tax - Topic 1127

Income from a business or property - Deductions - Expenses - General - [See Income Tax - Topic 1150.8 ].

Income Tax - Topic 1150.8

Income from a business or property - Deductions - Tenant inducement payments - To attract tenants, TCPL paid tenant inducement payments in 1983 and deducted the full amount in 1983 - The Minister determined that the payments should be amortized and matched against future rental revenues - The Federal Court of Canada, Trial Division, allowed full deduction of the payments in 1983, because they were running expenses and there was no obligation imposed by case law or the Income Tax Act to defer current running expenses - The Federal Court of Appeal overturned the Trial Division's judgment - The Supreme Court of Canada agreed with the Trial Division that the full amount of the inducements paid in 1983 could be deducted in 1983 - TCPL's method of income calculation was not inconsistent with the Act, accorded with the treatment of inducement payments in the case law, conformed with well-accepted business principles and repre­sented a more accurate picture of income for 1983 than the Minister's amortization method.

Cases Noticed:

Canderel Ltd. v. Minister of National Revenue (1998), 222 N.R. 81 (S.C.C.), appld. [para. 1].

Ikea Ltd. v. Minister of National Revenue (1998), 222 N.R. 161 (S.C.C.), refd to. [para. 1].

Cummings v. Revenue Canada (1981), 37 N.R. 574; 81 D.T.C. 5207 (F.C.A.), refd to. [para. 6].

Minister of National Revenue v. Tower Investment Inc., [1972] F.C. 454 (F.C.T.D.), refd to. [para. 21].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 9(1), sect. 18(1)(a), sect. 18(9) [para. 5].

Counsel:

Michael E. Barrack and Thomas B. Akin, for the appellant;

J.S. Gill and Elizabeth Chasson, for the respondent.

Solicitors of Record:

McCarthy Tétrault, Toronto, Ontario, for the appellant;

Attorney General of Canada, Ottawa, Ontario, for the respondent.

This appeal was heard on December 2, 1997, before Gonthier, Cory, Iacobucci, Major and Bastarache, JJ., of the Supreme Court of Canada.

On February 12, 1998, Iacobucci, J., delivered the following judgment in both official languages for the Supreme Court of Canada.