Law360 Canada (September 19, 2023, 6:00 AM EDT) -- Appeal by Crown from Tax Court of Canada (“Tax Court”) decisions vacating assessments issued by Minister of National Revenue (“Minister”) against each of respondents on grounds that the Tax Court erred in concluding that s. 160(1) of the Income Tax Act, construed on its own or in light of the general anti-avoidance rule (“GAAR”), did not apply. The five respondents were holding corporations that indirectly owned, in five respective partnerships, a parcel of a farmland. The respondents each agreed to dispose of their undivided interest in the farmland to an arm’s length purchaser. Shortly after the agreement was executed, Wilshire Technology Corporation (“WTC”) proposed a package deal from which WTC and the respondents could mutually benefit by sharing the amount destined to pay the respondents’ income tax liability arising from the disposition of the farmland. The respondents rearranged their affairs by moving their partnership interests to a newly formed single-purpose subsidiary. The partnerships then disposed of the farmland and the cash received in exchange for the farmland was isolated in the subsidiaries, together with the tax liability. The subsidiaries claimed capital cost allowance (“CCA”) in their 2006 tax returns in an amount sufficient to offset the tax liability they bore. Reassessments denying the CCA deductions were issued against each of the subsidiaries. The Minister assessed the respondents for the totality of the subsidiaries’ unpaid tax debt. Each of the respondents appealed. The Tax Court allowed the appeals and vacated the assessments in their entirety....