| August 9th, 1989 | |
| E. Noël de Tilly | Small Business and |
| Director | General Division |
| Appeals and Referrals Division | Bill Guglich |
| 957-2102 | |
| D.W. Baines | |
| File No. 8-0295 |
Subject: Paragraph 18(1)(e)
We are replying to your memorandum of February 17, 1989, which was forwarded to us by our Technical Interpretations Division, regarding the relationship between paragraph 18(1)(e) and 20(1)(m) of the Act.
You attached a copy of a Department of Justice opinion that 23
Paragraph 18(1)(e) of the Act contains the phrase "except as expressly permitted in this Part". This phrase and a similar phrase "except as permitted in this Part" appear in various provisions of the Act, the more common ones being paragraph 18(1)(b) and subsection 69(1). In both of these we have interpreted the phrase to mean that the provision does not apply in situations where other provisions expressly provide or permit otherwise.
The Department's position is that subsection 69(1) of the Act does not apply where section 85 applies to determine the cost of acquisition and proceeds of disposition. Similarly our position is that paragraph 18(1)(b) of the Act does not apply to disallow CCA or depletion deductions if paragraph 20(1)(a) applies respecting CCA or section 65 applies respecting depletion allowances.
Consequently we agree with the Department of Justice that if paragraph 23
In our view the Department's position is clearly set out in IT-215R. However we are forwarding copies of this correspondence to our Audit Applications Division for their information.
B.W. Dath Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
c.c. J. DamanA/DirectorAudit Applications Division
R. ShultisDirector Publications Division