The appellant appealed reassessments adding amounts to his income as shareholder benefits under subsection 15(1) of the Income Tax Act for the 2010 and 2011 taxation years.
The Minister based the reassessments solely on the difference between the balances of the corporation's 'Payable to Shareholder' account at the beginning and end of the fiscal year.
The Tax Court of Canada allowed the appeal, finding that a benefit cannot be conferred on a shareholder solely by establishing that the balance of the 'Payable to Shareholder' account was artificially increased after false accounting entries were made.
The reassessments were referred back to the Minister for reconsideration.
