KETUA PENGARAH HASIL DALAM NEGERI v. KIND ACTION (M) SDN BHD

[2025] 3 MLRA 403
Federal Court, Putrajaya
Tengku Maimun Tuan Mat CJ, Rhodzariah Bujang, Abu Bakar Jais FCJJ
[Civil Appeal No: 01(f)-18-05-2024(J)]
Tengku Maimun Tuan Mat CJ, Rhodzariah Bujang, Abu Bakar Jais FCJJ

JUDGMENT

Tengku Maimun Tuan Mat CJ (Majority):

Introduction

[1] This is the Ketua Pengarah Hasil Dalam Negeri/Revenue's appeal against the decision of the Court of Appeal in reversing the judgment of the High Court. The High Court had decided in favour of the Revenue when it dismissed the respondent's application for judicial review.

[2] Having considered the written and oral submissions of the parties, we unanimously dismissed the Revenue's appeal. We now provide our reasons.

Background facts

[3] The respondent is in the plantation business. Its parent company is Revertex Malaysia Sdn Bhd ("RMSB"). The ultimate holding company of the respondent is the Synthomer Group, a company incorporated in the United Kingdom.

[4] Synthomer Group decided that RMSB was to focus on Synthomer Group's core business activity, namely manufacture, trade and sale in chemicals (i.e. Synthetic resin and alkyd resin), and the respondent to carry out plantation business previously carried out by RMSB. For this purpose, the respondent entered into a Sale and Purchase Agreement dated 24 May 2004 with RMSB where plantation lands used by RMSB in Kluang, Johor were transferred to the respondent.

[5] The particulars of the lands are as follows:

(i) HS(D) 47663 Lot PTD 57386

(ii) HS(D) 47664 Lot PTD 57387

(iii) HS(D) 47665 Lot PTD 57387 (collectively referred to as "Mengkibol Estate")

[6] At all material times, the respondent derived its income from its plantation business which was conducted on the Mengkibol Estate. Mengkibol Estate has always been recognized in the respondent's audited account as a fixed asset for the relevant years of assessment. The respondent has duly paid income tax upon the same.

[7] There was a change in the top management of the Synthomer plc, the ultimate holding company in the United Kingdom, and following the change, in 2007 the Synthomer Group made a strategic decision to streamline the business activity of the Group. Synthomer Group decided to withdraw from the plantation business altogether and focus on its chemical manufacturing business. Towards that end, the respondent was to realise its investments in Lots PTD 57386 and PTD 57387. Lot PTD 57386 and Lot PTD 57387 measuring 427 acres and 1471 acres respectively, were subsequently subdivided into smaller lots ("the plantation lands").

Sign up to view full cases Login