The appellant, Harvard Properties Inc., appealed a section 160 assessment related to a series of transactions involving the sale of its interest in the North Hill Shopping Centre.
The transactions were structured as a share sale to an entity called Abacus, which then sold the shopping centre assets to a third party.
The CRA assessed the appellant for the tax liability of Abacus, arguing that the parties were not dealing at arm's length and that the appellant received property with a value exceeding the consideration given.
The Tax Court of Canada found that the parties were not dealing at arm's length, that there was a transfer of property, and that the fair market value of the property transferred exceeded the consideration given.
The Court also found that if section 160 did not apply, the general anti-avoidance rule (GAAR) would apply to the transactions.
The appeal was dismissed to the extent of any liability of the transferor under section 160.
