The appellant appealed an assessment denying a bad debt deduction under section 231 of the Excise Tax Act for uncollected GST on the assignment of a property.
The Tax Court of Canada dismissed the appeal, finding that the appellant and the recipient corporation were not dealing at arm's length because the appellant and his spouse controlled the corporation.
Furthermore, the appellant failed to meet the mandatory conditions of subsection 231(1.1) because the tax collectible was never included in the net tax reported and was never remitted.
