Does the principal purpose of Alland constitute income from the sale of property?

From the perspective of this decision, it would appear to be more appropriate to examine the principal purpose of Alland based on the facts as they actually existed rather than as they appeared to be. From this perspective would it be reasonable to conclude that Alland was deriving income from property when its “principal purpose” was to enter into transactions by which it was being defrauded? In fact, to the extent that such a fraud is successful, then potentially Alland’s principal purpose would ensure it either had no income at all or that it incurred a loss. Even if the principal purpose of Alland could be considered to be deriving income, when the principal source of such income is designed to ultimately fail, acknowledging the fraud suggests that the source of any income would be the re‑shuffling of advances from other participants within the pyramid scheme. Therefore in reality it is not income at all or at least not from sales of inventory. With respect to the 37 or 38 undocumented trades, re-shuffling such payments from other participants cannot convert them into income from property in any context. If a genuine transaction would not give rise to income from property, the same transaction will not through alchemy give rise to income from property when the intention of one of the parties participating in those transactions is to defraud the other. According to the decision in Kleinfelder, such payments would not be considered business income from the joint venture perpetrating the fraud. However, since the Respondent has assumed that Alland was carrying on business activities independently from any joint venture enterprise, such payments here could presumably be business income from such a business. (See Friesen v. Canada, [1995] T.C.J. No. 922.)