Sony Holdings Ltd a property developer owns the Westgate mall which was attacked by terrorists on 21 September 2013. The mall was out of business for some years following the incident and would later receive Sh 4.4 Billion in compensation from their insurers Kenindia. Sony Holdings received Sh1.2 billion in loss of rent and Sh3.1 billion for the loss and damage to buildings. KRA immediately raised an assessment for Sh. 834 Million.
Sony Holdings appealed to the tax appeals tribunal which held that the compensation could not be considered as capital for the loss of the building and again as income subject to tax a s this would amount to double taxation. The High court upheld the tribunals’ decision
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