"It is clear from the evidence that was presented at the hearing that there is no dispute that Mr. Deyab withdrew the amounts in question from M.D. Consulting during the taxation years in issue. There is also no dispute that no shareholders’ loan account ledger that accurately reflected the amounts withdrawn was presented to either the auditor for the Canada Revenue Agency (CRA) or the Tax Court.\n\nSubsection 15(1) of the Act provides the general rule that the amount or value of any benefit conferred by a corporation on a shareholder of that corporation is to be included in the income of that shareholder. If a corporation is repaying an amount payable to that shareholder and records the payment as such, then no benefit would be conferred, and hence, there would be no misrepresentation in not including such amount in the income of the shareholder.\n\nThe financial statements for M.D. Consulting included, in the liabilities of that company, amounts “Due to shareholders”. However, although the CRA auditor requested the shareholders’ loan account information for M.D. Consulting during her audit, no such information was provided to the CRA. Mr. Deyab, during his cross-examination, confirmed that M.D. Consulting did not maintain a shareholders’ loan account in its books and records. Since M.D. Consulting did not maintain a shareholders’ loan account during the taxation years in issue, this begs the question of how the amounts due to shareholders were determined. There is nothing in the record that addresses how M.D. Consulting determined the amounts “Due to shareholders” that were reported in its financial statements.\n\nMr. Deyab did arrange to have a reconciliation of the shareholders’ loan account prepared for the purposes of his objection and appeal. This reconciliation, however, did not reflect the amounts that were withdrawn from M.D. Consulting that are in issue in this appeal."