The Appellant appealed reassessments disallowing a deduction of $36,207,810 for feasibility study costs related to an Alaskan gas pipeline project and assessing Part XIII tax of $1,810,391.
The Tax Court found that the reassessment was not statute-barred under subparagraph 152(4)(b)(iii).
However, the Court held that the feasibility study costs were deductible under paragraph 18(1)(a) as they were incurred for the purpose of gaining or producing income from a business.
The Court also found that the transfer pricing rules in subsection 247(2) did not apply to deny or adjust the deduction, and vacated the Part XIII tax assessment.
