Guy Tremblay:—This case was heard at Belleville, Ontario, on April 18, 1978.
1. Point at Issue
The point at issue is whether the respondent is correct in disallowing the sum of $306 claimed by the appellant for meals for the 1975 taxation year. The appellant is a truck driver working for a transport company.
2. Burden of Proof
The appellant has the burden of showing that the respondent’s assessment was not justified. This burden of proof is based not on a particular section of the Income Tax Act but on several judicial decisions, among them a decision of the Supreme Court of Canada rendered in R W S Johnston v MNR, [1948] CTC 195; 3 DTC 1182.
3. Facts
3.1 At all material times, the appellant during his 1975 taxation year was employed as a transport driver by McCailum Transport Division of Dominion Consolidated Truck Lines Limited at Oshawa, Ontario.
3.2 The appellant, in his 1975 income tax return, claimed $1,938 for meals consumed in the course of his employment.
3.3 The appellant had no vouchers to file evidence because he had chosen the “Simplified Method’’ proposed by the respondent to the taxpayers in Information Circular 73-21R in lieu of the detailed recordkeeping method to which an expense, to be admitted, must be justified by a voucher. Here is the "Simplified Method’’ explained by the respondent in his bulletin:
When following this method the Department is prepared to allow a maximum of one meal after every four hours from the check-out time at $2.50 (1974 and prior years) or $3 (1975 and subsequent years) per meal, to a maximum of three meals per day.
3.4 The appellant filed as evidence a 21 page description of the trips made during the year in question. Here are a few examples:
Oshawa to Sarnia to Hamilton to Oshawa
24 hrs—4 meals—434 miles.
Markham to Oshawa
4 hrs—1 meal—54 miles
Sarnia to London to Ingersoll to Sarnia to Toronto SE, to Concord to Oshawa to Belleville to Kingston to Coteau to Oshawa
80 hrs—16 meals—1,162 miles—2 sleeps
3.5 On that document the number of meals totals 646; and the total expenses are $1,938 (646 x 3).
3.6 However, according to the respondent, because of the condition of 3 meals per day provided in the bulletin 73-21R, there are only 544 meals and consequently $1,632 (544 x 3) of deductible expenses.
3.7 Before the notice of objection dated February 21, 1977, to the assessment dated February 18, 1977, the respondent had accepted only 522 meals. However, by notice of reassessment dated June 8, 1977, he had accepted 22 other meals.
3.8 On August 23, 1977, an appeal was lodged before the Tax Review Board.
3.9 According to the appellant, he sleeps at home (Cobourg, Ontario) half of the time but leaves at 4:00 or 5:00 o’clock in the morning and returns home at 8:00 pm.
3.10 The other 50% of the time he has to sleep away from home, ordinarily in a motel or hotel chosen by the employer. If at those places the cost of the room was not expensive, the cost of the meal was expensive. Very often the meals were between six and seven dollars, and sometimes more.
3.11 It is quite difficult and and even impossible to gather all the bills for meals. The appellant quoted the case of one companion who had collected all the bills. When he presented all the vouchers to the representative of the respondent in application of the detailed recordkeeping method and he was told that the simplified method was applied and the vouchers were not necessary.
4. Law—Comments
4.1 The main section of the new Act concerned by this case at bar is paragraph 8(1 )(g), which reads as follows:
(g) Transport employee’s expenses.—where the taxpayer was an employee of a person whose principal business was passenger, goods, or passenger and goods transport and the duties of the employment required him, regularly,
(i) to travel, away from the municipality where the employer’s establishment to which he reported for work was located and away from the metropolitan area, if there is one, where it was located, on vehicles used by the employer to transport the goods or passengers, and
(ii) while so away from such municipality and metropolitan area, to make disbursements for meals and lodging,
amounts so disbursed by him in the year to the extent that he had not been reimbursed and is not entitled to be reimbursed in respect thereof:
4.2 The Information Circular 73-21R, like the Bulletin of Interpretation, is not the law but it is like a settlement giving a choice to the taxpayer. The appellant has made the choice. Since the choice is made, is the Circular and its simplified method strictly construed? It seems so at first glance.
The main problem is how to calculate the number of meals in a day. Must the meals be calculated according to the ordinary meaning of the word “day” from midnight to midnight or on a 24-hour basis, Starting at any time during a day as there is no definition in the law of the word “day”.
The ordinary meaning of that word must be applied. Consequently, if a truck driver leaves at midnight one day and returns at midnight the next day, he only has right to three meals, even if he has taken four; but if the truck driver leaves the terminal at noon one day and comes back at noon the next day, he would have the right to 6 meals for that 24 hours.
From that point of view, the Board is ready to accept that the number of meals were 646. So the amount of $1,938 claimed (646 x $3) must be accepted. Furthermore, when a case is before the Board, it must be judged according to the evidence given.
The evidence showed also that the average cost for each meal can certainly be $4 and even more. Consequently, even if the Board accepts the number of meals—544 (on which the reassessment was based), the amount of $1,938 claimed by the appellant is not exaggerated and must be accepted even if there are no supporting vouchers.
5. Conclusion
The appeal is allowed and the matter referred back to the respondent for reassessment in accordance with the above reasons for judgment.
Appeal allowed.