The taxpayer received demand loans from its U.S. parent which provided for the semi-annual payment of interest but provided that the taxpayer, on giving ten days' prior written notice, could elect that interest which otherwise would become due on a semi-annual payment date would be added to the principal amount. In its books of account, the taxpayer credited 85% of the capitalized interest as an amount owing to the non-resident creditor, and 15% as an amount owing to the Receiver General. In finding that interest which had been so capitalized had not been "credited", Tremblay J. stated (p. 1357) that in his view:
"A strict interpretation of s. 212(1)(b) leaves to interpreting the word 'credit' according to its substance, 'making available to', and not according to the form of making an entry 'on the right side of an account'."