SRED Appeal Ruled In Airmax's Favour

SR&ED Appeal Ruled In Airmax's Favour

Written by:
Gerry Fung, Director of Business Development.

On October 25, 2012, the Honourable Justice Robert J. Hogan ruled on a SR&ED appeal by Airmax Technologies in the appellant’s favour. Airmax is an installer of heating, ventilation, and air conditioning systems in residential homes who worked extensively on the development of a high-static, high-velocity fan coil system. They invested in the modifications and reprogramming of HVAC systems to further reduce their noise, improve efficiency, and size issues in townhouses.

Airmax claimed a total of $387,553 in SR&ED expenditures for 2007 and 2008. However, a reassessment of Airmax’s SR&ED claims by the CRA found that the majority of work claimed on HVAC systems was ineligible because it was routine engineering work.

Airmax disputed this reassessment by appealing to the independent Appeals branch of the CRA. After a thorough examination, the Tax Court of Canada concluded that Airmax had $387,553 of qualified eligible SR&ED expenditures, based on the fact that the five criteria identified by “Northwest Hydraulic Consultants Limited v. The Queen” were met: (1) Technological risk or uncertainty, (2) Hypothesis aimed at reducing uncertainty, (3) Procedures using the scientific method, (4) Technological advancement, and (5) A detailed record of hypothesis and test results as work progressed.


Gerry is a Professional Engineer who has been involved in the SR&ED program since 2003. He has also gained significant business experience managing the operations of a retail consumer products distributor and e-commerce direct-sales.

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