COMMISSIONER OF INCOME TAX V MABATI ROLLING MILLS LIMITED [2012] KEHC 5958 (KLR)
- Court
- High Court of Kenya
- Case number
- 5958
- Citation
- [2012] KEHC 5958 (KLR)
- Decided
- 1 October 2012
The Court upholds the decision of the Local Committee and dismisses the appeals with costs to the respondent.
Facts
The respondent, Mabati Rolling Mills Limited, was assessed tax for years 1996 to 2001 by the Commissioner of Income Tax. The respondent objected to the assessment, claiming that the interest payments were not income chargeable to tax under Section 3(1) of the Income Tax Act. The respondent appealed to the Local Committee, which found that the interest was not chargeable to tax due to the activities being outside Kenya.
Issues
- Whether the respondent was under obligation to withhold any amount in respect of withholding tax on payment of interest to a non-resident person
- Whether the interest was chargeable to tax and subject to withholding tax
Reasoning
The contract was entered into and goods were sold in Japan, and the interest was derived from the place of sale. Therefore, the interest was not chargeable to tax and subject to withholding tax.
Outcome
Appeals dismissed
Orders
- Appeals dismissed with costs to the respondent
Authorities cited
Legislation (2)
- Income Tax Act
- Income Tax (Appeals to the High Court) Rules
Cases cited (2)
- ESSO STANDARD EASTERN INC. vs. INCOME TAX
- COMMISSIONER OF INCOME TAX vs. P. CO. LTD.
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