Petro-Canada v. Canada, 2004 DTC 6329, 2004 FCA 158 -- summary under Paragraph (a)

The Tax Court had allowed a deduction for only a portion of the purchase price for seismic data purchased by two joint exploration corporations and renounced to the taxpayer on the basis that only a portion of the seismic data had been acquired for the required purpose. Sharlow J.A. accepted the taxpayer's submission that the statutory purpose test could be met by an expenditure that was made for more than one purpose but indicated that here there was no evidence of any use of the remainder of the seismic data, or a plan to use it, in the determination of the existence, location, extent or quality of an accumulation of petroleum or natural gas. Most of the seismic data apparently was to be retained for an indefinite period of time for possible future reference and this did not satisfy the test.