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€€Central€Capital€Leasing€(ð ðCentralð ð),€qui€avait€des€inqui tudes€auÐ h Ðsujet€de€la€solvabilit €de€plusieurs€locataires€et€de€certaines€obligations€fiscalesÏ ventuelles€deÏLeasing,€a€propos €une€op ration€par€laquelle€Leasing€formerait,€avec€certaines€filialesÏde€Central,€une€soci t €en€nom€collectif€qui€exercerait€les€m mes€activit s€que€Leasing,Ïtransf rerait€ses€ l ments€dð ðactif€Ô ‡ X •É X X X •É Ô €cette€soci t Ô # † X •É X X X •É® # Ô€„„€ €lð ðexception€des€baux€exclus€„„€enÐ Á ` Ðeffectuant€le€choix€pr vu€au€par.
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ÐÔ_ Ôcertain€contingent€tax€liabilities€of€Leasing,€proposed€a€transaction€whereby€LeasingÏwould€form€a€partnership€with€several€Central€subsidiaries€to€carry€on€the€same€businessÏas€Leasing,€transfer€its€assets€other€than€the€excluded€leases€to€the€partnership€using€anÏelection€under€ñ ñœñ ñs.97(2)ñ ñ›ñ ñ€of€the€ò òIncome€Tax€Actó ó,€ñ ñœñ ñañ ñ›ñ ñ€rollover€provision,€ñ ñœñ ñdistributeñ ñ›ñ ñ€itsÐ 0 È Ðpartnership€interest€to€the€Bank€at€its€cost€base€as€part€of€its€winding„up,€and€then€haveÏthe€Bank€sell€its€interest€to€Central€or€its€subsidiaries.€€ñ ñœñ ñAñ ñ›ñ ñ€master€agreement€was€signedÏsetting€out€the€various€steps€ñ ñœñ ñto€be€executedñ ñ›ñ ñ€by€the€parties.€€The€partnership€was€formedÏon€December€24,€ñ ñœñ ñ1986;€all€partners,€except€Leasing,€gave€representations€and€warrantiesÏthat€they€were€and€would€remain€duly€registered€and€qualified€to€carry€on€the€businessÏof€the€partnership.ñ ñ›ñ ñ€ñ ñœñ ñ€Onñ ñ›ñ ñ€December€ñ ñœñ ñ27,ñ ñ›ñ ñ€Leasing€and€the€Bank€signed€an€indentureÏproviding€for€the€transfer€of€Leasingð ðs€partnership€interest€to€the€Bank.€€On€DecemberÏ29,€ñ ñœñ ñ1986,ñ ñ›ñ ñ€the€Bank€sold€the€interest€in€the€partnership€to€subsidiaries€of€Central.€€ñ ñœñ ñLeasingñ ñ›ñ ñÏfiled€its€income€tax€return€for€1987€based€on€these€transfers.€€The€Minister€of€NationalÏRevenue€reassessed€Leasing€on€the€basis€that€the€partnership€transaction€was€invalid€andÏthat€the€true€nature€of€the€transaction€was€a€disposition€by€Leasing€of€its€leasing€assetsÏto€Central,€making€the€ñ ñœñ ñs.97(2)ñ ñ›ñ ñ€election€invalid€and€giving€rise€to€recaptured€capital€costÏallowance€in€the€hands€of€Leasing.€€ñ ñœñ ñAsñ ñ›ñ ñ€an€alternative€to€the€reassessment€of€Leasing,€theÏMinister€assessed€the€Bank€on€the€basis€that€it€realized€an€income€gain€as€opposed€to€aÏcapital€gain€from€the€disposition€of€the€partnership€interest€it€had€acquired€from€Leasing.€Ïñ ñœñ ñTheñ ñ›ñ ñ€Tax€Court€of€Canada€concluded€that€the€Bank€properly€reported€the€proceeds€fromÏthe€sale€of€the€partnership€interest€as€a€capital€gain€and€was€not€required€to€include€thoseÏproceeds€on€its€income€account.€€ñ ñœñ ñThatñ ñ›ñ ñ€decision€was€affirmed€by€the€Federal€Court€ofÏAppeal.ÌÌà œ àò òHeldó ó:€€The€appeal€should€be€dismissed.Ð ¨,@&0 Ðâ âÐ @.Ø'2 Ðà œ àò òPeró ó€ñ ñœñ ñGonthier,€Cory,ñ ñ›ñ ñ€ñ ñœñ ñMcLachlin,ñ ñ›ñ ñ€Iacobucci€and€Major€JJ.:€€ñ ñœñ ñAssumingñ ñ›ñ ñ€that
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