In a filing with Bursa Malaysia, TNB said it and IRB had entered into a consent judgment before the Kuala Lumpur High Court to substitute the judicial review proceedings with regard to the notices of additional assessment dated Nov 23, 2015, by filing the appeal.
The SCIT is an independent tribunal which consists of panel members appointed by the Yang Di-Pertuan Agong to handle tax appeals.
TNB said the consent judgment also provided that the IRB would not begin any proceedings against the notices of additional assessment until the matter was determined by the SCIT and by the High Court on a subsequent appeal.
To recap, TNB had on Nov 23 last year received these notices for the years of assessment 2013 and 2014 for the sum of RM985.574mil and RM1.083mil respectively. The High Court in the following month allowed TNB to start judicial review proceedings to set aside the notices.
In an announcement to Bursa Malaysia, the utility company said the disputed assessments followed from IRB’s decision to disallow TNB’s reinvestment allowance claim for the years of assessment 2013 and 2014.
“TNB had claimed reinvestment allowance for the years of assessment 2013 and 2014 subsequent to IRB’s approval dated Jan 21, 2013, which in principal approved TNB’s reinvestment allowance claim. Notwithstanding this approval, vide its letters on June 17, 2015 and Sept 15, 2015, the IRB subsequently reversed its earlier approval on the basis that TNB is not in the business of manufacturing,” it said.
TNB said the reinvestment allowance claim was the result of its heavy investment in annual capital expenditure for purposes of expansion, modernisation and upgrade of its electricity infrastructure.
“Based on the advice obtained from our tax consultants and tax solicitors, TNB maintains that it is entitled to claim reinvestment allowance,” it said.
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