A W Prociuk:—This is an appeal from an assessment for the taxation year 1968 wherein the Minister ruled that the net proceeds of sale of land by the appellant was taxable income.
The case was heard on March 22, 1971 at a hearing held at the City of Kitchener, in the Province of Ontario, at which the presiding member was J O Weldon, Esq, QC, then a member of the Tax Appeal Board which, on December 15, 1971, became the Tax Review Board. However, judgment was reserved and no decision rendered by him prior to his retirement from the Board in March of 1972. Accordingly, by consent of both parties, this Board has now been given jurisdiction to issue its decision and judgment on the basis of the transcript of the evidence and the argument before Mr Weldon, without further representation by counsel.
The appellant, age 59, is in food retail business in the Village of Markdale, Ontario. The evidence discloses that for years prior, his side interest was in developing sporting facilities, in particular skiing, with some considerable success. In 1963, he purchased 8 acres of land in the County of Grey for $1,750 for the purpose of building for himself and his wife a cottage and a ski chalet. A ski resort which he had helped promote and establish was already in existence not too far from this acreage.
Some three years later, after several conferences with his wife, who was also his business partner, he concluded that a ski chalet was not feasible. The evidence also shows that in the interval he made some improvements on this property for the eventual construction of his cottage. He then decided to build his cottage on another location. In 1968 he sold the 8 acres and used the proceeds thereof for the construction of his cottage.
Nowhere in the transcript is there any tangible evidence that his Original intention in acquiring this acreage was for trading purposes. On the contrary, the appellant repeated time and again his intention to develop this property for himself. Equally, there is no evidence of any secondary intent.
He states in his evidence: “At no time had ! ever intended to buy this on a speculative basis. I was too proud of it not to build a home on it and to ever think of selling it.. ..”
When he and his wife some years later decided not to go on with this original plan this change of mind does not in my humble opinion make the sale of this acreage a trading profit.
The appeal, accordingly, is allowed.
Appeal allowed.