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Appeal allowed; software development project combining multiple tools to resolve performance issues qualified as SRED.
The Appellant appealed a reassessment denying a deduction and investment tax credit for scientific research and experimental development (SRED) expenditures related to a software development project.
The Minister conceded a portion of the expenditures at the hearing.
The remaining issue was whether the payroll expenditures for a specific subproject qualified as SRED.
The Tax Court of Canada found that the Appellant faced a technological uncertainty in combining four software tools to achieve adequate performance, which could not be resolved by routine engineering.
The Court concluded that the Appellant's activities met the five criteria for SRED established in Northwest Hydraulic.
The appeal was allowed with costs, and the reassessment was referred back to the Minister to allow the additional SRED expenditures.
