Premium Iron Ores Ltd. v. Minister of National Revenue, 66 DTC 5280, [1966] CTC 391, [1966] S.C.R. 685 -- summary under Legal and other Professional Fees

When the taxpayer learned that the American revenue authorities were taking the position that it had a permanent establishment in the U.S., it incurred legal expenses in reaching a position in which any claim to tax income effectively connected to such an alleged permanent establishment could be effectively opposed. Martland J. found in light of the Kellogg and Evans cases that such expenses were deductible because they were made with a view to protecting the income earning capacity of the company, i.e., protecting its "income against encroachment by a third party" (p. 5283).