Tag: Arm’s length transaction
A transaction among parties, each of whom acts in his or her own best interest.
/ Arm's length principle, Arm's Length Principle, Arm's length transaction , Burden of proof (Onus), Canada, Decision in favor of tax authority, Shareholder, Shares and Dividends, Supreme Court
Miron and Frères Ltd acquired a farm from one of its shareholders, Gérard Miron, at a price ($600.000) far exceeding the original cost ($90.000) one year prior to the transaction. Miron and Frères Ltd claimed a capital cost allowance based on the price paid. Considering that the purchase was not a transaction “at arm’s length” but was one between a corporation and a controlling shareholder, the tax authorities rejected the claim and based the allowance on the original cost to the shareholder. Judgement of the Supreme Court The appeal filed by Miron and Frères Ltd was dismissed with costs. “Notwithstanding that an assessment is, by virtue of s. 42(6) deemed to be valid and binding, subject to appeal, the appellant saw fit to adduce no evidence with respect to the shares or the subject matter of control apart from the share-holdings as above set out. It is now argued on behalf of the appellant that it was for the respondent ... Read more