Tax Case Law

The court of Appeal noted as follows; “Pili, as we have seen, made a nil return of income for the year 2004. It alleged it was not trading for that year and that therefore, could not have earned any income upon which tax could have been levied. But we now know, and the Commissioner came...... Continue reading→

The barrister, in accordance with Bar requirements, acquired and wore particular items of clothing, both in court and to and from the court to her chambers. The clothing was such as might be used for ordinary civilian purposes but she did not wear such clothing away from work. The barrister preferring to wear coloured clothes...... Continue reading→

Quinn was a sub-contract carpenter, working on sites within a 40-mile radius of his home. When working, Quinn could not go home for lunch and bought one at an average cost of 40 pence, compared with an estimated cost of 10 pence for a light lunch at home. Quinn attributed the additional cost to the...... Continue reading→

Unilever Kenya was selling goods to Unilever Uganda and KRA held that the transactions were not at arm’s length being less than the price at which goods were sold to local customers. These goods had been marked up by only 5% between the two companies leading to loss to the Kenyan Company. KRA invoked Section...... Continue reading→

One of the famous crime masterminds, Al Capone dodged all other laws for crimes he had committed only to be humbled by tax law. In the 1920’s Al Capone virtually controlled all the gambling, prostitution, liquor and extortion rackets in Chicago USA. According to Forbes magazine he made vast amounts of money   from these ventures...... Continue reading→

The Appellant, who carried on the business of providing automatic machines for public use, dealt in and entered into arrangements for exploiting, certain automatic machines the use of which has been held to be illegal. The machines were set up in premises to which the public resorted, for public use, and the profits arising therefrom...... Continue reading→

Fintel ltd engaged China Jiangsu International Economic Technical Co-operation for the construction of a rental building on April 21, 2009. Fintel was then to pay a contractual fees to the Chinese company, which they delayed and accounted for as a liability in their financial statements. KRA made a demand for shs 4,787,257 being withholding tax...... Continue reading→

The SACCO contented that income derived from FOSA services was mutual income generated from its own members and therefore exempted from tax under Section 19A (4). The tax payer had treated this amount as exempt but was latter subjected to additional assessment. The appellant contested the decision through the local committee and later appealed to...... Continue reading→

The Applicant commenced business in January, 1998 and filed its first income tax return on 31st December, 1998.  Thereafter the Applicant consistently continued filing its tax returns on or before 31st December of every year. It is the Applicant’s case that on 12th April, 2010 the Respondent, the Commissioner of Income Tax wrote a letter stating that twelve...... Continue reading→

There was a lacuna in tax law concerning computer software before 2010 when section 31B of the Second schedule was enacted. This section allows capital deduction on computer software at 20%. The petitioner CFC Stanbic had been claiming diminution in value at 33.33% while the revenue authority had been allowing the deduction at 12.5% a...... Continue reading→