Law360 Canada ( July 5, 2022, 6:06 AM EDT) -- Appeal by National R&D Inc. (National) from the dismissal of National’s appeal of the Minister of National Revenue’s assessment which denied tax credits claimed by National for scientific research and experimental development (SR&ED). National argued that the judge made legal errors in her understanding of s.248(1) of the Income Tax Act (ITA) and made palpable and overriding errors in the assessment of the evidence. It further claimed the judge misunderstood the burden of proof on the taxpayer in proceedings before the Tax Court and erred in ruling the expert report tendered by National to be inadmissible. The Tax Court judge found National had not shown on the balance of probabilities that National’s project qualified as SR&ED under s. 248(1) as it did not meet the criteria set out in Northwest Hydraulic. Evidence showed National did not conduct its work in a methodical manner and did not keep adequate records. To the extent that National kept records, she found them vague, unclear, and not reflecting a logical progression between the premise of an experiment and the result. The recorded entries were conclusionary and there was no indication any of the hypotheses advanced were modified as a result of any analysis or testing. National submitted the judge erred in relying on the test from Northwest Hydraulic. It contended the criteria in that case were mere guidance and not mandatory prerequisites for SR&ED eligibility....