Universal Timber Products v. Minister of National Revenue, (1974) 5 N.R. 69 (FCA)

• Judge: Thurlow and Ryan, JJ. and Sheppard, D.J.
• Court: Federal Court of Appeal (Canada)
• Case Date: June 28, 1974
• Jurisdiction: Canada (Federal)
• Citations: (1974), 5 N.R. 69 (FCA)

Universal Timber Products v. MNR (1974), 5 N.R. 69 (FCA)

MLB headnote and full text

Universal Timber Products v. Minister of National Revenue

Indexed As: Universal Timber Products v. Minister of National Revenue

Federal Court of Appeal

Thurlow and Ryan, JJ. and Sheppard, D.J.

June 28, 1974.

Summary:

This case arose out of the assessment of a taxpayer for $100,000. The taxpayer in 1966 discontinued its logging business and received $100,000 when it sold its right to renew a timber harvesting licence issued by the Province of British Columbia. The taxpayer was a "recognized applicant" with respect to timber harvesting licences and applied for and received an additional timber harvesting licence in 1966. The taxpayer sold the new licence and its rights as a "recognized applicant" for $100,000.

The Federal Court of Appeal held that the receipt of the $100,000 by the taxpayer related not only to the newly acquired licence, but also related to the taxpayer's preferred position as an applicant for timber harvesting licences from the Province of British Columbia. The Federal Court of Appeal held that the receipt of the $100,000 was not a taxable business profit.

Income Tax - Topic 1055

Income from a business - What constitutes an "adventure or concern in the nature of trade" - Income Tax Act, s. 248(1) - The taxpayer discontinued its logging business and sold for $100,000 its right to renew a timber harvesting licence and a newly acquired timber licence - The Federal Court of Appeal held that the receipt of the $100,000 was not a taxable business profit.

Cases Noticed:

Tabor Creek Sawmills Ltd. v. Minister of Finance, [1972] 3 W.W.R. 622, refd to. [para. 3].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 9(1), sect. 248(1).

Counsel:

C.C. Sturrock, for the appellant;

L.P. Chambers and J.A. Weinstein, for the respondent.

This appeal was heard by the Federal Court of Appeal at Vancouver, British Columbia on June 27 and 28, 1974. Judgment was delivered by the Federal Court of Appeal on June 28, 1974.

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