Time Motors Limited v. Minister of National Revenue, 69 DTC 5149, [1969] CTC 190, [1969] S.C.R. 501 -- summary under Incurring of Expense

The taxpayer, which was a used car dealer, issued credit notes in partial payments of used cars acquired for resale. The notes were not transferrable, were valid only within a stated period of time (generally one or two years) and were good only for the purchase of a car of the taxpayer of not less than a stated value. Pigeon J. found that the issuance of the credit notes gave rise to an immediate enforceable obligation against the taxpayer notwithstanding that the merchandise to be obtained by virtue of a credit note was not specified. Accordingly, the credit notes were part of the cost of goods purchased by the taxpayer.