27 January 2005 Internal T.I. 2004-0103531I7 F - Dommages Intérêts art.1618- 1619 CCQ -- summary under Compensation Payments

The taxpayer received damages plus interest after suing a supplier for the additional demolition and repair work it had to perform under a services contract due to an error of the supplier. In finding that the damages were business income from the taxpayer’s construction business, the Directorate noted that although the taxpayer had experienced some difficulties in being able to post security on further jobs, its business had not been crippled. The interest income also was business income given that it arose on amounts that otherwise would have been used in the taxpayer’s business but for the untoward incurring of the demolition and repair costs. Irving Oil was analogous.