KUALA LUMPUR: MK Land Holdings Bhd's unit has filed an appeal to the Court of Appeal over the RM80.76mil in income tax and penalty imposed by the Inland Revenue Board (IRB) which had been upheld by the High Court.
The property developer said on Thursday its unit Saujana Triangle Sdn Bhd had filed the appeal after its application to the High Court for judicial review and stay was dismissed by the High Court on Aug 9.
Saujana Triangle also filed a notice of motion to stay the effect and enforcement of the notices of assessment and additional assessment pending the appeal before the Court of Appeal.
“Upon consulting its solicitors, the board is of the view that there are grounds to disagree on the notices of assessment raised including the imposition of penalties,” it said.
MK Land also pointed out Saujana Triangle had also filed notices of appeal to the Special Commissioners of Income Tax with the Director General of Inland Revenue to appeal against the notices of assessment and additional assessment, which was still pending hearing.
To recap, on May 22, Saujana Triangle was served with notices of assessment for the years of assements from 2009 to 2011 and also 2013 for an additional income tax of RM55.70mil and 45%penalty of RM25mil totalling RM80.76mil.
The IRB had declared the gains from the disposal of land held under investment properties in year of assessment 2009 were to be treated as revenue in nature, instead of capital in nature.
MK Land also said the IRB has also disregarded the five years’ time barred period to raise the said assessments in respect of the land disposal.
IRB had also disallowed certain development costs on the basis that these are only provisions and the amounts have yet to be paid.
“Thus, IRB does not treat them to be incurred for the purpose of Section 33 (1) of the Income Tax Act, 1967,” it said.
However, Saujana Triangle viewed the land sales of the investment properties were capital transactions which are liable to real property gain tax (RPGT) in year 2009 (tax exempt year).
The company also viewed that the notices of assessment raised by IRB were statute barred and erroneous in law; and the accrual of development costs have been allowed according to accounting standards and IRB’s public ruling on property development.
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