The original Crown Reply had stated that the Minister had assessed the 2015 return of the taxpayer (TPine) to disallow a deduction for capital cost allowance (CCA) on the basis that the Class 10 and 16 assets for which CCA had been claimed were included in the same equipment that TPine had sold and for which it had claimed a deduction for the cost of goods sold (CGS). TPine appealed the Tax Court’s allowance of an amendment to the Reply (requested after the expiry of the normal reassessment period, and which the Crown sought to justify under s. 152(9)) to include the alternative basis for the assessment that, if TPine was successful in challenging the CCA denial, the TPine CGS deduction should be reduced by an equivalent amount.
Before addressing s. 152(9), Webb JA noted (at para. 28) that “[s]ince the Minister allowed the deduction for the full amount claimed as cost of goods sold, it may be difficult for the Minister to establish that TPine made the requisite misrepresentation in relation to the claim for the cost of goods sold” to justify on the basis of s. 152(4)(a)(i) a reassessment beyond the normal reassessment period.