GIBSON, J.:—As at December 31, 1961, Consumers Distributing Company Limited had loaned the appellant $18,477.17. The appellant at that time owned beneficially all the issued shares of Consumers Distributing Company Limited. On April 15, 1962, the appellant caused to have issued to him as fully paid and non-assessable 3,600 preference shares of a par value of $10 of Consumers Distributing (Adelaide) Limited and purported to give, according to the evidence, as consideration therefor, a $36,000 promissory note without interest. At that time all the shares of Consumers Distributing (Adelaide) Limited were beneficially owned by the appellant. On that same day the appellant caused to be transferred all the shares of Consumers Distributing (Adelaide) Limited to Consumers Distributing Company Limited so that the former became a wholly-owned subsidiary of the latter. On that day also, the appellant caused Consumers Distributing Company Limited to buy the said 3,600 preference shares of Consumers Distributing (Adelaide) Limited from him purportedly for the sum of $36,000. On that day also, and until August 31, 1963, Consumers Distributing (Adelaide) Limited was an inoperative company having no assets except this promissory note owed to it by the appellant and a further account receivable for $30 also owed by the appellant to it for the only issued shares of the company.
The issue on this appeal is whether the appellant "‘repaid’’ within the meaning of Section 8(2) of the Income Tax Act his said loan of $18,477.17 to Consumers Distributing Company Limited by the purported sale to it on April 15, 1962 of the said preference shares purported to have a value of $36,000.
Without detailing the evidence, but as is readily apparent from it, on a determination of this issue I find as a fact: (1) that no promissory note was ever issued by the appellant and delivered to Consumers Distributing (Adelaide) Limited; and
(2) that the 3,600 preference shares of that company were never transferred by the appellant to Consumers Distributing Company Limited.
In any event, I also find that insufficient evidence was put forward by the appellant to convince me of what the true facts are in this particular case to rebut the assumptions contained in Section 7(c), (e) and (g) of the Reply.
I therefore conclude that the said loan of $18,477.17 as a matter of fact was not repaid to Consumers Distributing Company Limited within the meaning of Section 8(2) of the I ncome Tax Act.
The appeal is dismissed with costs.