Sunday, January 23

IRB loses shipbuilder’s income tax appeal

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KUCHING: The Special Commissioners of Income Tax (SCIT) has ruled that a local shipbuilding company’s appeal against the Inland Revenue Board’s (IRB) additional assessments be allowed.

A press statement said following several days of lengthy arguments between the company and the IRB during the trial before the SCIT, the SCIT had on Tuesday unanimously ruled that the company’s appeal be allowed after having perused the lengthy detailed written submissions submitted by both parties. The IRB had tax audited the local shipbuilding company and consequently decided that the expenditures incurred in the purchase of metal plates used by the company for the purposes of shipbuilding, ship repairs and maintenance of its dockyard are not wholly and exclusively incurred in the production of its business of shipbuilding and ship repairs income, and disallowed for tax deduction.

The IRB then issued Notices of Additional assessments for YA2000 and YA2003 requiring the company to pay a total amount of additional tax plus 45 per cent penalty imposed under Section 113(2) amounting to over RM1 million.

Being aggrieved by the additional assessments made by the IRB, the company through its tax consultant Lam Kam Wing of Tasmanco Consultancy Services Sdn Bhd submitted a Notice of Appeal against the additional assessments to the SCIT.

Before the SCIT, the company was represented by Battenberg & Talma advocate Dr Chew Peng Hui assisted by the tax consultant and the IRB was presented by two legal officers from Kuala Lumpur.