http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/111004/index.do
Garmeco Canada International Consulting Engineers Ltd. v. The Queen (July 31, 2015 – 2015 TCC 194, V. Miller J.).
Précis: The appellant was a corporation that formed part of a complex organization of corporations all of which were ultimately owned and controlled by Mrs. Hilda Georges Abou Rached. The appellant paid various expenses incurred by corporations within the group and claimed ITCs in respect of payments made by members of the group.
The Court dismissed the appeal (with the exception of $33.09 in ITCs it allowed) and awarded costs of $1,000 to the Crown. The fact that Garmeco acted as a financer for the corporate group did not entitle it to ITCs on expenses it did not incur.
Decision: The Court’s decision is summed up in two paragraphs:
[44] The only commercial activity carried on by the Appellant during the period was engineering consulting services. These services were delivered by Mr. Rached’s brother, René.
[45] Mr. Rached asserted that the Appellant should be entitled to claim an ITC for expenses which it paid on behalf of the other corporations in the Garmeco Family of Companies. However, as I stated above, before the Appellant can receive the ITCs in question, it must demonstrate that it was contractually liable to pay the supplier for the goods and services and that it acquired the goods and services for consumption or use in the course of its own commercial activity. A contract between the Appellant and its related corporations is not sufficient to entitle the Appellant to receive the ITCs in question in this appeal.
On the evidence the Court allowed $33.09 in ITCs. The appeal was dismissed with costs of $1,000 awarded to the Crown.