Income Tax Regulations — 1102
on to such revenue as a bonus, rebate or discount or for returned or damaged goods; and (b) amounts included therein by virtue of section 13 or subsection 23(1) of the Act. Election for Certain Manufacturing or Processing Equipments (16.1) A taxpayer who acquires a property after March 18, 2007 and before 2016 that is manufacturing or processing machinery or equipment may (by letter attached to the return of income of the taxpayer filed with the Minister in accordance with section 150 of the Act for the taxation year in which the property is acquired) elect to include the property in Class 29 in Schedule II if (a) Class 43.1 or 43.2 in Schedule II would otherwise apply to the property; and (b) Class 29 in Schedule II would apply to the property if that schedule were read without reference to Classes 43.1 and 43.2. Recreational Property (17) Property referred to in paragraph (1)(f) does not include (a) any property that the taxpayer was obligated to acquire under the terms of an agreement in writing entered into before November 13, 1974; or (b) any property the construction of which was (i) commenced by the taxpayer before November 13, 1974 or commenced under an agreement in writing entered into by the taxpayer before November 13, 1974, and (ii) completed substantially according to plans and specifications agreed to by the taxpayer before November 13, 1974. (18) [Repealed, SOR/99-179, s. 2] Additions and Alterations (19) For the purposes of this Part and Schedule II, where (a) a taxpayer acquired a property that is included in a class in Schedule II (in this subsection referred to as the “actual class”), (b) the taxpayer acquires property that is an addition or alteration to the property referred to in paragraph (a), (c) the property that is the addition or alteration referred to in paragraph (b) would have been property of the actual class if it had been acquired by the taxpayer at the time he acquired the property referred to in paragraph (a), and (d) the property referred to in paragraph (a) would have been property of a class in Schedule II (in this subsection referred to as the “present class”) that is different from the actual class if it had been acquired by the taxpayer at the time he acquired the addition or alteration referred to in paragraph (b), the addition or alteration referred to in paragraph (b) shall, except as otherwise provided in this Part or in Schedule II, be deemed to be an acquisition by the taxpayer of property of the present class. (19.1) For the purposes of this Part and Schedule II, if subsection (19.2) applies to the refurbishment or reconditioning of a railway locomotive of a taxpayer, any property acquired by the taxpayer after February 25, 2008 that is incorporated into the locomotive in the course of the refurbishment or reconditioning is, except as otherwise provided in this Part or in Schedule II, deemed to be included in paragraph (y) of Class 10 in Schedule II. (19.2) This subsection applies to the refurbishment or reconditioning of a railway locomotive, of a taxpayer, that (a) is included in a class in Schedule II other than Class 10; and (b) would be included in Class 10 in Schedule II if it had not been used or acquired for use for any purpose by any taxpayer before February 26, 2008. Non-arm’s Length Exception (20) For the purposes of subsections 1100(2.2) and (19), 1101(lad) and 1102(14) (in this subsection referred to as the “relevant subsections”), where, but for this subsection, a taxpayer would be considered to be dealing not at arm’s length with another person as a result of a transaction or series of transactions the principal purpose of which may reasonably be considered to have been to cause one or more of the relevant subsections to apply in respect of the acquisition of a property, the taxpayer shall be considered to be dealing at arm’s length with the other person in respect of the acquisition of that property. (20.1) For the purposes of subsections 1100(0.3), (2.02) and (2.