A J Frost:—This is an appeal from an income tax assessment dated February 4, 1969, with respect to the appellant’s 1967 taxation year wherein an amount of $487.93 was added to income as a benefit received, being the value of a trip to Greece. Upon notice of objection duly signed and filed, the Minister of National Revenue reconsidered the assessment and confirmed it on September 11, 1969. The appeal was heard at Hamilton, Ontario, on November 22, 1971, by the Tax Appeal Board as it was then constituted, and allowed in part from the Bench.
The appellant attended a convention trip to Greece under the auspices of Hupp (Canada) Limited (hereinafter referred to as “Hupp”). Hupp are manufacturers of refrigerators, stoves, washing machines and air conditioning units, and plan yearly conventions to introduce their new range of products for the following year and for the purpose of conducting sales meetings with their dealers.
The appellant is an officer and director of Frontier Commercial Refrigeration Limited (hereinafter referred to as “Frontier”) and is responsible for the general supervision of the company’s financial affairs but is not directly responsible for sales. Frontier is the only independent wholesale distributor of air conditioning products of Hupp in the Province of Ontario.
The appellant testified as follows:
Let me say this, that we maybe handle anywhere from ten to fifty times as much merchandise in the air conditioning field than the average dealer would handle in all of their products to earn, say, one trip. We were told at the beginning of each year that on the basis of what we propose would be the amount of our business for that year, that they would automatically make available to us — for our customers and for us to attend and look after those customers — so many trips. I believe I am correct in saying that on this trip the allocation to us was twenty. I know it was in that neighbourhood or a few more, but approximately twenty and this was set a year before. In other words, this was set before we had even sold any of their goods for the following year.
As the convention included many of Frontier’s regular customers and potential customers, it was important for the appellant and other chief executives of Frontier to attend. The appellant attended the convention at the request of Frontier and as one of its employees.
The appellant testified that, apart from business, he only had a slight interest in taking a trip to Greece but, when there, he did take in a number of the planned tours in Athens; that if he had considered the convention in the nature of a pleasure trip he would have asked his wife to accompany him; that he did extensive travelling for pleasure, had taken at least one trip to a foreign country during the past seven years and usually spent close to $5,000 a year on pleasure travel. He added that he enjoyed his wife’s company and invariably took her along.
Everything the appellant said was forthright and credible. He appealed his assessment, not because of the tax involved, but as a matter of principle and because other employees might be assessed on a somewhat similar basis. There is no question in this case of the appellant having earned an award. He was simply requested to attend the convention by the President and General Manager of the company for business reasons, which included goodwill and public relations.
Despite the circumstances surrounding this case, I find there was an element of value to the appellant in taking the trip to Athens with some free time on his hands and all expenses paid. The value received, however, was only nominal, say 10% of the amount added by the Minister to his reported income and, in my opinion, the appellant should not be obliged to pay tax on more than 10% of the cost of the trip to Greece as indicated at the hearing. I allow the appeal in part and refer the assessment back to the Minister for reconsideration and reassessment on the basis that the appellant did in fact receive something of value, but that the taxable benefit to him did not exceed 10% of $487.93.
Appeal allowed in part.