The Minister reassessed the appellant for unreported GST/HST, assuming that cash deposits into the sole shareholder's personal bank account were unreported corporate sales.
The appellant appealed, arguing the deposits were repayments of two informal personal loans made by the shareholder to friends.
The Tax Court of Canada found the shareholder and his witnesses credible, concluding on a balance of probabilities that the deposits were non-taxable loan repayments.
The appeal was allowed and the reassessments referred back to the Minister for reconsideration.
