John B Goetz:—This is an appeal by the appellant with respect to his 1977 taxation year. The appellant in his 1977 tax return claimed a restricted farm loss of $4,612.72, which he carried forward from 1974 and 1975. The Minister, by reassessment, restricted the farm loss carried forward to the sum of $760.89, and in so doing relied upon subsection 9(1) and paragraph 111(1)(c) of the Income Tax Act, SC 1970-71-72, c 63, as amended.
Facts
The appellant’s occupation was that of mine foreman at a mine near Saskatoon. Farming, as he testified, was a “sideline”. The appellant stated that he had been “harassed” by the Department of National Revenue with respect to deductions of previous farm losses, and when he filed his 1977 return, he stated: “I deliberately showed a small profit for 1977”, and did so by not taking the full capital cost allowance. Consequently, he only showed a net farm profit of $760.89. His total net income for the 1977 taxation year was $19,407.
The appellant, in attempting to carry forward previous farm losses, relied on the Farmers and Fishermen’s Guide, chapter 6. Unfortunately, he did not fully read or alternatively comprehend the import of the information disclosed therein. Under cross-examination he admitted that he was not in the business of farming.
In support of his assessment, the respondent relied upon paragraph 111(1)(c) of the Income Tax Act which reads as follows:
111.(1) For the purpose of computing the taxable income of a taxpayer for a taxation year, there may be deducted from the income for the year such of the following amounts as are applicable:
(c) restricted farm losses of the taxpayer for the 5 taxation years immediately preceding and the taxation year immediately following the taxation year, but no amount is deductible in respect of a restricted farm loss from the income for any year except to the extent of the lesser of
(i) the taxpayer’s income for the year minus all deductions permitted by the
provisions of this Division other than this subsection or section 109, and
(ii) his incomes for the year from all farming businesses carried on by him.
Clearly, from the above facts, the appellant is precluded from claiming the restricted farm losses in the amount of $4,612.72 in that his net farm income for the taxation year 1977 amounted to only $760.89 and consequently, the assessment is correct. (See Fred S Goring and F Dennis Goring v MNR, [1976] CTC 2255; 76 DTC 1202.)
For the above reasons, I dismiss the appeal.
Appeal dismissed.