After the taxpayer withdrew from his law firm effective the end of its fiscal year the firm allocated income to him for that year based on his share of income of the partnership before excluding therefrom the value of work-in-progress at the end of the fiscal year. In filing his return the taxpayer deducted from this amount an amount in respect of work in progress in light of a determination of the firm that it would not allocate any work in progress to him. Instead, the firm allocated a substantial amount of work in progress to a partner who never docketed time.
Beaubier TCJ found (at p. 1981) that "the Income Tax Act requires that the partnership's allocation is the one which must be assessed upon".