RITCHIE, D.J.:—This appeal is from a re-assessment of income tax made on August 26, 1958 in respect of the taxation years 1954, 1955 and 1956.
The appellant has carried on business as a furrier in Toronto in partnership with another for more than twenty years. He also has made a practice of dealing in real estate. The re-assessment is in respect of two real estate transactions which the appellant contends are of a class other than his usual dealings in real estate.
From 1951 to 1956 inclusive the appellant bought and resold at a profit a number of old houses. A quick turnover was the method of operation he endeavoured to follow. In some cases the re-sales were negotiated even before title had vested in him. The profits from these re-sale transactions were shown as income on the appellant’s returns and tax paid thereon.
On July 27, 1953, Doctorow entered into an agreement to purchase from Winston Park Development Limited for the price of $42,500 eight lots numbered 147 to 154 inclusive and having a total frontage of 500 feet on the north side of Lawrence Avenue West in North York Township. About 18 months later, lot #154 was conveyed, for a consideration of $7,500, to Pimlico Invest- ments Limited, a company in the capital stock of which the appellant owned shares. Pimlico Investments erected an eleven suite apartment building on this lot.
Title to the remaining seven lots was taken in the name of the appellant’s wife, as his nominee. It was the appellant’s intention to erect seven apartment buildings thereon at a cost of approximately $75,000 each. He hoped to obtain mortgage loans of $65,000 on each building. Because of an incinerator located on the south side of Lawrence Avenue, opposite the seven lots, all efforts of the appellant to obtain mortgage loans proved unsuccessful. Applications to the Council of the Corporation of the Township of North York for removal of the incinerator were rejected. When final payment of the purchase price of the seven lots fell due the appellant was compelled to negotiate a mortgage loan for one year at an interest rate of 6 per cent and pay 5 per cent bonus. In October 1955, just prior to the maturity of the mortgage loan, he sold the seven lots at a profit of $13,911.53. The Minister included that amount in the appellant’s 1955 income and assessed tax thereon. The appellant maintains this profit is a capital gain.
In November 1952 the appellant purchased a new six room bungalow on Wickford Avenue for the price of $11,450. At the time of the purchase the property was subject to a mortgage of approximately $9,000 payable in monthly instalments of $75, including interest and taxes. It was leased at a rental of $125 per month. After one year the rental was reduced to $110 per month. In 1956 the tenant was demanding construction of a garage. The appellant was unwilling to accede to that demand and decided to sell. In April 1956 the bungalow property was sold for $14,500. The actual profit realized on the sale was $3,025.10. The appellant contends the Wickford Avenue property was purchased as an investment and that the profit on re-sale is a capital gain.
The appellant undoubtedly was engaged in the business of buying and selling lands in order to gain profits. I am unable to separate his dealings in respect of the two transactions in question from his buying and selling the old houses. He merely entered new fields of the real estate business. While the primary intention may have been to obtain an income return on the capital invested, that intention was abandoned and a profit realized on re-sale. Such profit falls within Section 3 of the Income Tax Act as income from a business.
The appeal will be dismissed, with costs.
Judgment accordingly.