Hudson Bay Mining and Smelting Co., Ltd. v. The Queen, 86 DTC 6244, [1986] 1 CTC 484 (FCTD), aff'd 89 DTC 5515 (FCA) -- summary under Subsection 163(2)

No penalty was exigible where the taxpayer made a supposedly deductible "gift" to the Manitoba Crown which, in fact, was characterized as partial consideration for a payment made by the Crown to the taxpayer. "Something more than mere disagreement must be determined: a false statement by a taxpayer, as an example, or gross negligence, or a finding by the tax department that an error was made deliberately ... One cannot fault the plaintiff for putting the best possible light on the situation."