A major victory and a breakthrough today on certain provisions under the Income Tax Act,1967

A major victory and a breakthrough today on certain provisions under the Income Tax Act,1967, our clients’ appeal against the Government Of Malaysia was allowed by the Court of Appeal today. Government of Malaysia (Kerajaan Malaysia) as Plaintiff had obtained a summary judgment against our clients (a developer and its directors) in the High Court of Shah Alam for the sum of RM 6,574,798.34 being tax payable as at 31.8.2018 on compensation monies received in respect of land acquisition. We appealed to the Court of Appeal against the High Court’s decision, and it came up for hearing today. I raised the following triable issues before the Court of Appeal:

1. Whether compensation monies received as a result of compulsory land acquisition is taxable?
2. Whether the compensation monies received are gain or profits from a business as in section 4C of the Income Tax Act?
3. Whether section 106(3) of the Income Tax Act on the exclusion of Court’s jurisdiction is applicable to our clients’ case?

The Court of Appeal agreed with our submissions that those are triable issues. Set aside the summary judgment obtained by the Government of Malaysia against our clients. Ordered a full trial in the matter. Happy! Oury clients don’t have to pay anything for now as tax to the Government of Malaysia.We await for a final decision on the issues by the High Court. Hopefully the issues raised would be favorable to our clients after a full trial in the matter. I was assisted by Anis Salihah Bt Abd Malek. I believe this is a “First” for a full trial on income tax matter before the High Court.