SIDNEY SMITH, D.J.:—This is an appeal from the decision of the Minister of National Revenue, dated 12th June, 1950, affirm- ing the assessments for excess profits tax in respect of the taxation years ended 3lst March, 1946, 1947 and 1948, upon the ground that they were made in accordance with Section 15A of the Excess Profits Tax Act in that the sum of the capital employed by the appellant company and by Allison Logging Company Limited (the parent company) at the time of incorporation of the appellant company was not substantially greater than the eapital employed by Allison Logging Company Limited prior to the incorporation of appellant.
The date of incorporation of appellant was 14th March, 1942, and on 24th February, 1943, the Allison Company obtained control of appellant. Appellant contends that the time of its incorporation within Section 15A is the latter date, while respondent says it is the former. It is not necessary in the present case, as I see, to reach a conclusion on this point.
But assuming that it was 24th February, 1943, then at that date the capital employed by appellant company was $49,604.00, of which $49,600.00 came from the working capital of the Allison Company, and $4.00 from outside sources. Therefore it seems to me that however one looks at this matter the combined capital of the two was not substantially greater than that of the Allison Company prior to incorporation of appellant.
Appellant, however, points to Section 1 of the First Schedule in the Act and says that the Allison capital must be considered as of 1st December, 1941, if computed in accordance with that section. But with respect, I do not see that the section has any relevance here. It defines " " capital employed in any year or fiscal period, ‘ ‘ while Section 15A is concerned with capital employed ‘ ‘ at the time of incorporation’’ and "‘prior to incorporation’’. This seems to me to be quite a different thing.
I would dismiss the appeal with costs.
Appeal dismissed.