The appellants, two individuals and their corporation, appealed reassessments for unreported income, unremitted GST/HST, and gross negligence penalties related to the operation of a restaurant.
The Minister alleged the appellants suppressed sales by altering daily cash totals and deleting transactions in their point-of-sale system.
The Tax Court found the appellants failed to demolish the Minister's assumptions regarding the daily cash alterations, but allowed a 23% reduction in the deleted sales calculations, finding some deletions were likely legitimate errors.
The gross negligence penalties were upheld, as the court found the appellants knowingly manipulated the system to understate income.
