Northwood Pulp and Timber Ltd. v. Canada
A-155-96
Sexton J.A.
22/10/98
5 pp.
Appeal from Tax Court of Canada decision dismissing appeal from reassessment of appellant's 1987 taxation year-Tax Court Judge finding deduction of estimated reforestation costs prohibited by Income Tax Act, s. 18(1)(a)-Appellant carrying on business of harvesting logs, manufacturing finished timber, other goods in province of British Columbia-To obtain timber harvesting licence, appellant must carry out, at own expense, reforestation of area from which timber to be harvested-Whether appellant properly included reforestation costs in cost of inventory for purposes of calculating profit under Income Tax Act-Tax Court Judge properly found silviculture expenses period, running expenses rather than costs to be added to cost of inventory-Such costs should be deducted only when incurred-Tax Court made no palpable, overriding error warranting Court's intervention-Taxpayer's treatment of reforestation costs from accounting point of view different for income taxation purposes-Expense not incurred by taxpayer who is under no obligation to pay money to anyone-Appellant's position inconsistent with "established case law principles"-Courts having consistently disqualified for income tax purposes, in calculating taxable profits, amounts that are provisional estimates, conditional, contingent, uncertain-Appeal dismissed-Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 18(1)(a).