Appeal allowed in part; development of 535-HP tractor constituted SR&ED, qualifying for $972,066 in expenditures.
The appellant, an agricultural equipment manufacturer, appealed the Minister's disallowance of its 2005 SR&ED claim for seven tractor projects.
The Tax Court of Canada allowed the appeal in part, finding that the appellant's activities with respect to a 535-HP tractor in one of the projects constituted experimental development due to the system uncertainty involved in integrating a new, more powerful engine.
The Court allowed one-third of the claimed expenditures for that project, amounting to $972,066, as qualified SR&ED expenditures.
