Packer Floor Covering Ltd. v. The Queen, 82 DTC 6027, [1981] CTC 506 (FCTD) -- summary under Compensation Payments

By services, 28 November, 2015

An amount received by the taxpayer in settlement of an action against one of its carpet suppliers for wrongful termination of their distributorship agreement could not be characterized as compensation for the loss or crippling of the taxpayer's profit-making apparatus, and thus was not received on capital account. In fact, sales and gross profits continued at about the same level after termination. The amount instead was compensation in lieu of notice and was therefore a revenue receipt.

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Drupal 7 entity ID
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