The taxpayer, owned and operated by Mr. Mullen, invested in shares and made non-interest bearing loans to a number of corporate ventures to which Mr. Mullen provided management services free of charge by him or the taxpayer. The taxpayer claimed input tax credits on expenses relating to the operation of a private jet, which were incurred primarily in connection with Mr. Mullen making visits to the offices of these ventures.
V. Miller J. found that the taxpayer could not claim input tax credits on the flight expenses that related to the business ventures rather than any business carried on directly by the taxpayer. She stated at para. 81:
This is a unique situation of a company incurring costs (inputs) to provide free services for its business ventures. In such circumstances, the company can best be viewed as the ultimate consumer - the end of the line: no [input tax credits] are available, as there is no further commercial activity of the company.