Sony Holdings Limited vs Commissioner of Domestic Taxes (Commercial Building Allowance prior to 2010)

Sony Holdings Limited vs Commissioner of Domestic Taxes

Tax Alert

Tax Alert

This alert brings to your attention the High Court’s judgment in the case of Commissioner of Domestic Taxes (Appellant) vs Sony Holdings Ltd (Respondent), Case No. HCCOMMITA/E052/2020 KLR.

The Respondent completed construction of the Westgate Shopping Mall (Mall) and commissioned it in 2007. On 25 May 2016, the Respondent applied to the Commissioner to amend its self-assessment returns for the years of income 2010 to 2015 to include a deduction for Commercial Building Allowance (Allowance) at the rate of 25% per year.

The Commissioner rejected the Respondent’s application on the ground that the Mall on which the Respondent sought to claim the Allowance was completed and used in 2007, which was before the law allowing taxpayers to claim the Allowance came into force (1st January 2010).

Aggrieved by the Commissioner’s decision, the Respondent filed its Notice of Objection which the Commissioner dismissed via a letter dated 8 March 2017 precipitating the appeal to the TAT.

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