The registrant, which was the corporate successor to an income fund, acquired, as essentially its only asset, a 49% limited partnership interest in a partnership that carried on a newspaper business. It appealed the denial of $5,039.77 in ITCs which it had claimed in its return for its three-month reporting period ending on March 31, 2011 in connection with various of its costs including fees paid in connection with the income fund conversion and in connection with news releases regarding its dividends. Pizzitelli J. found, before turning to s. 272.1, that all of the the registrant's consumption or use of services was deemed by s. 141(3) to be not in the course of commercial activities, given that it received substantial partnership drawings ($3,865,500 for a six-month period) for distribution it to shareholders, and its only identified commercial activity in that period was providing advice to the partnership for fees of $1,212.75.
Pizzitelli J. rejected the registrant's argument that, pursuant to s. 272.1, it was deemed to carry on the commercial (publishing) activities of the partnership, and should be considered to have acquired the services for which it claimed the ITCs in the course of such deemed commercial activities.
First, the registrant, as a limited partner had "no legal capacity to act on behalf of the Partnership nor [was] required to provide any property or services other than the negligible advisory services contracted for" (para. 33). Second, none of the invoices for which it claimed ITCs were for services that were consumed, used or supplied in the course of the Partnership's newspaper publishing business (para. 35).