Highbury Merchants Limited v Commissioner of Investigations & Enforcement [2024] KETAT 553 (KLR)

Highbury Merchants Limited v Commissioner of Investigations & Enforcement (Appeal 70 of 2023) [2024] KETAT 553 (KLR) (22 March 2024) (Judgment)

Neutral citation: [2024] KETAT 553 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Appeal 70 of 2023

RM Mutuma, Chair, EN Njeru, M Makau, AM Diriye & B Gitari, Members

March 22, 2024

Between

Highbury Merchants Limited

Appellant

and

Commissioner of Investigations & Enforcement

Respondent

Judgment

Background 1. The Appellant is a limited liability company registered under the Companies Act, No. 17 of 2015, and is a registered taxpayer in Kenya. Its principal business is importation of alcoholic beverages.

2. The Respondent is a principal officer appointed under and in accordance with Section 13 of the Kenya Revenue Authority Act, and Kenya Revenue Authority is charged with the responsibility of among others, assessment, collection, accounting and the general administration of tax revenue on behalf of the Government of Kenya.

3. The dispute arose from an investigation carried out by the Respondent on the tax affairs of the Appellant for the period between 2016 and 2020 in relation to tax compliance on Import tax, Corporation tax and Value Added Tax.

4. The investigation established that the Appellant had a total tax liability of Kshs. 73,318,857. 00 being Import tax, Corporation tax and VAT for the period 2016 to 2020.

5. Upon conclusion of the tax investigations, the Respondent notified the Appellant of its findings on 31st December 2021 via assessment orders lodged on iTax.

6. The Appellant objected the Respondent's additional assessment on iTax on 29th January 2022 and the same was acknowledged by the Respondent on the same date.

7. The Appellant aggrieved by the Respondent’s decision lodged its Notice of Appeal dated 22nd December 2022 with leave of the Tribunal to file the Appeal out of time being granted on 11th February 2023.

The Appeal 8. The Appellant set down its case in the Memorandum of Appeal dated 22nd December 2022 and filed on 20th January 2023 on the following surmised grounds:-i.The Respondent erred in law and in facts by disregarding the actual turnover realized and reported by the Appellant in its financial statements and tax returns by arbitrarily increasing the Appellant’s turnover for the period under review, and thereafter assessing additional Income Tax, penalties and interest.ii.The Respondent erred in law and in facts by assuming that all the goods imported in the Appellant's consignment belonged to the Appellant, while the consignment in question had consolidated goods purchased by several importers.iii.The Respondent erred in law and in facts by assessing tax on non-existent income on the Appellant, while leaving out the other importers who had imported goods in the same consignment cleared in the names and PIN number of the Appellant.iv.The Respondent erred in law and in facts by disregarding all the reconciliations, explanations and documentation provided by the Appellant including the financial statements and tax returns, and proceeded to confirm the erroneous income tax assessments.v.The Respondent erred in law and in facts by disallowing expenses incurred by the Appellant in the production of the taxable income during the period under review, thereby assessing additional taxes on account of the disallowed expenses.vi.The Respondent erred in law and in facts by disregarding the actual turn over realized and reported by the Appellant in its financial statements and returns and arbitrarily increased the Appellant's turnover for the period under review and thereafter assessed additional VAT, penalties and interest.vii.The Respondent erred in law and in facts by assuming that all the goods imported and cleared in the same consignment as the Appellant belonged to the Appellant, while the consignment in question had consolidated goods purchased by several importers.viii.The Respondent erred in law and in facts by assessing VAT on non-existent income on the Appellant, while leaving out the other purchasers who had imported goods in the same consignment as the Appellant.ix.The Respondent erred in law and in facts by disregarding all the reconciliations, explanations and documentation provided by the Appellant including the financial statements and tax returns, and proceeded to confirm the erroneous VAT assessments.

The Appellant’s Case 9. The Appellant’s case is set out in its;a.Statement of facts dated 22nd December, 2022 and filed on 20th January 2023 together with annexed documents attached thereto; andb.Written submissions filed on the 16th August 2023.

10. The Appellant argued that ordinarily and for convenience purposes, the importation of alcoholic beverages under a license is done under consolidated consignments constituting of imports by the licensee as well as other vendors in the distribution in the chain.

11. The Appellant posits that during the period under review, the Appellant jointly with other distributors imported a consignment of alcohol for sale but each distributor paid for their respective accounts to the overseas manufacturer.

12. That at the port of entry, the consignment was cleared using the Appellant’s KRA PIN since it holds the license from the manufacturer and all import duties and taxes were duly paid.

13. That once the consignment was cleared, the other distributors proceeded to collect and acknowledged collection of their share of the imported alcoholic beverages while the Appellant only remained with its share of the alcoholic beverages, which it sold in the market and duly declared the revenue received from the sales and paid the relevant taxes on the sales.

14. The Appellant argued that in arriving at the assessment, the Respondent relied on the customs data since the entire consignment had been cleared under the Appellant’s PIN, and assumed that the entire consignment belonged to the Appellant.

15. The Appellant averred that during the period under review, it had kept proper books of accounts and reconciliations, which it relied on in the filing of its income tax returns.

16. That the Appellant accounted for all the sales it made in its financial records above and there was no omission of revenue in its tax returns.

17. That inspite of providing all the information, explanations and documentation, the Respondent went ahead to disregard the information, explanations and documents and issued the impugned assessments and proceeded to erroneously confirm them in total disregard of the information provided.

18. The Appellant averred that it is standard industry practice and not unusual for importers to consolidate imports in a single consignment for ease of transportation and clearing logistics.

19. That where consignments are consolidated, clearance may be done under one KRA Pin number, provided taxes are properly accounted for and paid at the point of entry.

20. That it is not the responsibility of the Appellant to follow up on the other distributors to confirm whether they declared taxes upon the sale of their goods, provided the Appellant can prove that indeed the goods in question were owned and collected by the other distributors.

21. The Appellant argued that the assessment which it termed as incorrect was issued by the Respondent despite the Respondent being provided with all the necessary documentation including financial statements and other source documents which would provide a fair view of the Appellant’s transactions.

22. That in its Objection decision, the Respondent erroneously invoked the use of best judgement by the Commissioner to determine the taxes due by a taxpayer where the information available is incomplete.

23. The Appellant asserted that in the current case, all relevant information and documentation was provided to the Respondent. The Appellant availed all the ledgers, bank statements and a summary of the transactions during the investigations exercise and also during the objection stage.

24. The Appellant averred that the information provided was complete and the Respondent has no grounds to use secondary data in making the assessments where primary data had been availed.

25. The Appellant argued also that while it filed its Objection on January 29th 2022 while the Objection decision was issued on June 6, 2022 more than four months from the date of the objection. It argued that this is contrary to the mandatory provisions of Section 51 (11) of the Tax Procedures Act which requires an objection decision to be issued within 60 days. Where a decision is not given in 60 days, it is deeded that the Objection has been allowed.

26. The Appellant therefore averred that the objection decision was issued late and that no explanation whatsoever was given, and as such, the impugned objection decision ought to be invalidated by this Honourable Tribunal.

27. As per the Appellant’s submissions, the following issues were identified for determination: -i.Whether the Objection decision issued is valid;ii.Whether the Respondent erred in basing the income tax assessments on the variances between the tax self-assessment declarations and the custom entries;iii.Whether the Respondent erred in assessing the VAT in respect to the variance between the self-declared income and the assumed value in the customs entries;iv.Whether customs entry documents are a proper basis for determination of sale for purposes of income tax and VAT;

i. Whether the objection decision issued was valid 28. The Appellant averred that Section 51 (11) of the Tax Procedures Act, 2015, the Respondent is required to issue an objection decision within 60 days from the date of the objection.

29. The Appellant stated that it lodged its objection on 29th January 2022 and the objection decision was issued on 6th June 2022, more than 60 days from the statutory periods, therefore, the Objection decision is invalid and ought to be struck out.

30. The Appellant relied on the case of Eastleigh Mall Limited vs. Commissioner of Investigations &Enforcement (Income Tax Appeal E068 of 2020) [2023] KEHC 20000 (eKLR) where Justice Mabeya A held that:“In view of the foregoing, the Court finds that the Tribunal erred in dismissing the objection raised by the appellant. The Respondent's failure to issue the objection decision within 60 days meant that the appellant’s objection had been allowed. In this regard, the Tribunals decision cannot stand. The Court need not therefore consider the second ground regarding the assessment of Corporation Tax.”

ii. Whether the Respondent erred in basing the Income tax assessments on the variances between the Income tax self-assessment declarations and the customs entries 31. The Appellant argued that the burden of proof lies with the taxpayer as stipulated in Section 56 of the TPA as read with Section 30 of the Tax Appeals Tribunal Act, however, there is a limit to this burden and there are instances where the burden can shift to the Respondent once the Appellant has proven a prima facie case.

32. That it provided proper explanations but despite providing all the information, explanations and documentation, the Respondent went ahead to disregard the information, explanations and documents and issued the impugned assessments and proceeded to erroneously confirm them in total disregard of the information provided.

33. The Appellant further relied on Justice Mativo's reasoning in Kenya Revenue Authority vs. Man Diesel & Turbo Se, Kenya [2021] eKLR where the Learned Judge held that:-“The shifting of the burden of proof in tax disputes flows from the presumption of correctness which attaches to the Commissioner's assessments or determinations of deficiency.' The commissioner's determinations of tax deficiencies are presumptively correct. Although the presumption created by the above provisions is not evidence in itself, the presumption remains until the taxpayer produces competent and relevant evidence to support his position. If the taxpayer comes forward with such evidence, the presumption vanishes and the case must be decided upon the evidence presented, with the burden of proof on the taxpayer.

iii. Whether the Respondent erred in assessing the VAT in respect to the variance between the derived sales per the bank credits and sales declarations as per the vat returns. 34. The Appellant argued that it had filed its VAT for the sales it made during the period under review and therefore the same matrix as income tax applies since the cargo declared at the port of entry was consolidated and owned by other parties and not the Appellant.

35. The Appellant relied on Republic v Commissioner of Domestic Taxes Large Tax Paver's Office Ex Parte Barclays Bank of Kenya Ltd[2012] eKLR where the court held that:“for the proposition that the decision to tax must have a legal basis and that section 56(1) does not empower the appellant to make speculative assessments (citing Johnson v Scott (Inspector of Taxes) nor was it the intention of the legislature to put the taxpayer in a position where he would be required to produce any documents that the tax man requires." (Citing Peter Bonde Nielson v Commissioner of Domestic Tax [2016] eklr).

36. The Appellant further buttressed its submissions by citing the decision in Kenya Revenue Authority vs. Man Diesel & Turbo Se, Kenya [2021] eKLR

37. The Appellant stated that, the Respondent misconstrued the Appellant's documents and has not provided any justifiable basis as to why it disregarded the Appellant’s documentation and explanation in its attempt to reconcile the various variances alleged.

iv. Whether customs entry documents are a proper basis for determination of sale for purposes of Income tax and VAT 38. The Appellant submitted that the proper basis of determining the sales for purposes of income tax and VAT is the financial statements of the Appellant and the bank statements and that mere importation of goods does not automatically translate to sales.

39. That the Respondent has all the information regarding the parties that paid the customs duty and other importation-related taxes therefore should have followed these other importers.

40. That the mere fact that the goods were declared in the name of the Appellant does not automatically mean that the goods belonged to the Appellant and that assumption, which is the basis of the assessment therein is grossly erroneous.

41. While admitting that it did not produce documents in supporting its assessment, the Appellant claimed that the Respondent has misled the Tribunal in deeming to have reviewed the documents in Paragraph 3 of its submissions, while at the same time it claims that the said documents were not provided.

42. The Appellant relied on the reasoning in Keroche Industries Limited vs. Kenya Revenue Authority & 5 Others [2007] eKLR where the court held that; -“It is no good answer for the taxman to proclaim that Kshs 1 billion (appx) is intended to swell the public treasury because due to the application of the above principles that money is not lawfully due... Applying the same reasoning, to the matter before this court, it does not matter that the respondents say and think they are owed over a billion Kenya shillings - what matters is whether the amount is lawfully due and whether the law allows its recovery? It is not a question of impression or perception of what is owed, instead it is what if anything, is owed under the relevant law and whether its assessment and recovery is permitted by the applicable law. If rightly due, the huge amount notwithstanding the court must uphold the right of recovery regardless of its consequence to the applicant and if not due under the law it must not hesitate to disallow it and must disallow it to among other things to uphold both the law the integrity of the rule of law.”

43. The Appellant finalized its submissions by stating that it had discharged its burden of proof and in great detail shown that the tax assessment by the Respondent is not only erroneous but unlawful, unfair, unjust and excessive and the Respondent has not even attempted to prove its case.

Appellant’s Prayers 44. The Appellant’s prayers as captured in the Memorandum of Appeal include: i. That this Appeal be allowedii.That the Respondent’s confirmed assessment be set asideii.That the costs of the Appeal be awarded to the Respondent

Respondent’s Case 45. The Respondent’s case is premised on the documents set out hereunder-;a.The Respondent’s Statement of Facts dated and filed on the 17th February 2023 together with the documents attached thereto; andb.The Respondent’s written submissions dated 14th August 2023 and filed on 15th August 2023.

46. The Respondent stated that the dispute arose from an investigation carried out by the Respondent for the period between 2016 and 2020 for import tax, Corporation tax and Value Added Tax.

47. That the investigation established the Appellant had a total tax liability of Kshs. 73,318,857. 00 which the Respondent notified the Appellant on 31st December 2021 via assessment orders lodged on iTax.

48. The Respondent stated that the Appellant objected to the assessment on 29th January 2022 via iTax which was acknowledged by the Respondent on the same date.

49. It was the Respondent’s argument that on 16th February 2022 it issued a letter to the Appellant stating that the notice of objection did not meet the requirements of Section 51 (3) of Tax Procedure Act and requested for documentation to be filed within 7 days of receipt of the letter.

50. The Respondent averred that it wrote a reminder to the Appellant via email correspondence on 18th May 2022, reminding it of its obligation to provide further documents. However, the Appellant did not respond to the requests and subsequently vide a letter dated 6th June 2022, the Respondent issued final decision invalidating the objection on the grounds that no documents were filed despite the request dated 16th February, 2022 and the reminder dated 18th May 2022.

51. That in the absence of supporting documents, the Respondent issued a decision to the Appellant as provided for in Sections 29 and 31 of the Tax Procedures Act.

52. That the Respondent asserted its competence to assess, demand and collect taxes as established from the investigation from Section 24 (2), 29 and 31 of the Tax Procedures Act, 2015 which gives the Commissioner the power to assess a taxpayer's tax liability using information available to the him and best judgment.

53. That the Respondent further averred that its actions are in line with Section 51 (3) and 51 (4) of the Tax Procedures Act.

54. That the Respondent reiterated that the objection decision was made within the stipulated timeline as was provided for in the now repealed Section 51 (11) of the Tax Procedures Act before the current amendment of 2022.

55. The Respondent averred that the Tribunal cannot delve on the merit of the issues in disputes since the Appellant's objection was invalidated and the Respondent did not issue an objection decision based on the merits of the issues.

56. The Respondent relied on Sections 56 (3) of the Tax Procedures Act and Section 13 (6) of the Tax Appeals Tribunal Act,

57. In response to the Appellant’s issue of whether the notice of objection was validly lodged, the Respondent relied on Section 51 (3) of Tax Procedure Act which states that: -“A notice of objection shall be treated as validly lodged by a taxpayer under subsection (2) if-a.the notice of objection states precisely the grounds of objection, the amendments required to be made to correct the decision, and the reasons for the amendments;b.in relation to an objection to an assessment, the taxpayer paid the entire amount of tax due under the assessment that is not in dispute or has applied for an extension of time to pay the tax not in-dispute under section 33(1); and(c)all the relevant documents relating to the objection have been submitted.”

58. The Respondent submitted that there was no valid objection since the Appellant failed to comply with Section 51 (3) (c) of the Tax Procedures Act.

59. The Respondent relied on Kotile General Contractors Company Limited v Commissioner of Domestic Taxes [2020] eKLR wherein the Tribunal held that the Applicant had failed to comply with the provisions set out in Section 51(3) of the Tax Procedures Act and hence there was no valid objection.

60. The Respondent submitted that the Appellant neither paid the undisputed amount of Kshs. 21,326,350. 00 nor entered into any arrangement with the Respondent to pay the taxes not in dispute contrary to Sections 51 (3) (b) and 52 (2) of the Tax Procedures Act.

61. The Respondent submitted that the Appellant's objection was invalid for the reason that the amount of the tax assessment not objected to was not paid contrary to Section 51 (3) (b) of the Tax Procedures Act.

62. On whether the Appeal herein is valid the Respondent submitted that the Appeal herein is invalid since the Appellant has failed to comply with Section 52(2) of the Tax Procedures Act.

63. That Section 52(2) of the Tax Procedures Act provides that:“A notice of appeal to the Tribunal relating to an assessment shall be valid if the taxpayer has paid the tax not in dispute or entered into an arrangement with the Commissioner to pay the tax not in dispute under the assessment at the time of lodging the notice”

64. The Respondent relied on TAT Appeal No 43 of 2017- Uchumi Supermarkets Ltd vs. Commissioner of Domestic Taxes where the Honourable Tribunal dismissed the Appeal and held that the Appeal was invalid and incompetent in law as it was in contravention with Section 52(2) of the Tax Procedures Act.

65. Based on the foregoing, the Respondent submitted that it was justified by the law to invalidate the Appellant's objection and therefore objection decision should therefore be affirmed by the Tribunal.

66. The Respondent further submitted that the Appeal herein is in contravention of Section 56 (3) of the Tax Procedures Act and Section 13 (6) of the Tax Appeals Tribunal Act.

67. That the Section 56 (3) of the Tax Procedures Act provides that;“In an appeal by a taxpayer to the Tribunal, High Court or Court of Appeal in relation to an appealable decision, the taxpayer shall rely on on the grounds slated in the objection to which the decision relates unless the Tribunal or Court allows the person to add new grounds.”

68. That the Section 13 (6) of the Tax Appeals Tribunal Act provides that:“The appellant shall, unless the Tribunal orders otherwise, be limited to the grounds stated in the appeal or documents to which the decision relates.”

69. The Respondent stated that the argument by the Appellant that the Respondent disregarded the actual turn over realized and reports by the Appellant in its financial statements and tax returns by arbitrarily increasing the Appellant's turnover for the period under review was not a ground that was raised at the objection stage and therefore, the Tribunal ought not to consider the same at this stage by dint of the provisions of Section 56 (3) of the Tax Procedures Act and the aforementioned 13 (6) above.

70. On whether the additional assessments were legally justified the Respondent submitted that the Appellant seeks to challenge an objection decision resulting from an invalid objection.

71. The Respondent argued that the Appeal is incurably defective and an abuse of the Tribunal process and cited stated in the case of Misc, Appl.No.125 Of 2022 Valley Drillers & General Contractor's Ltd vs. The Commissioner of Domestic Tax where the Honourable Tribunal held that without a valid objection the Applicant has no basis for bringing its Appeal before the Tribunal.

72. The Respondent further relied on the decision of Tax Appeals Tribunal Appeal No.721 Of 2021-Manchester Outfitters Ltd vs. Commissioner of Domestic Taxes; where the Tribunal held that the Appellant did not comply with both Section 51 (2) & (3) of the Tax Procedures Act.

73. That having concluded that there was no valid objection, it follows that there is no valid Appeal as there is no appealable decision to anchor this Appeal hence it fails.

74. On whether the Respondent's objection decision was lawful the Respondent cited Section 51 (11) of the Tax Procedures Act 2015 which states as follows: -“The Commissioner shall make the objection decision within sixty days from the date of receipt of a valid notice of objection failure to which the objection shall be deemed to be allowed”

75. The Respondent stated that by dint of Section 51 (11) of the Tax Procedure Act 2015, the Respondent is only required to issue an objection decision within 60 days where there is a valid objection. The Respondent is not obligated to issue an objection decision where the Appellant has not lodged a valid objection:

76. The Respondent argued that the Appellant failed to support its objection with the relevant supporting documents as required by Section 51 (3) (c) and therefore did not lodge a valid objection for which the Respondent would issue an objection decision.

77. The Respondent averred that in view of the Appellant's invalid objection and as already demonstrated, the time envisaged under Section 51 (11) of the Tax Procedures Act could not start running. It is therefore not open in law for the Appellant to question the timelines within which the Respondent ought to have confirmed its assessment.

78. On whether the Appellant discharged its burden of proof the Respondent argued that it is noteworthy that the Appellant has not adduced any evidence to support its case and therefore has not discharged its burden of proof to demonstrate that the assessments were erroneous or excessive.

79. The Section 56 (1) of the Tax Procedures Act places the burden on the taxpayer to proof that a tax decision is incorrect. The Section provides as follows;-“In any proceedings under this Part, the burden shall be on the Appellant to prove that a tax decision is incorrect.”

80. The Respondent relied on the case of Ushindi Exporters Limited vs. Commissioner of Investigation and Enforcement (Tax Appeals Tribunal No. 7 OF 2015) where the Tribunal held that:“The burden of proving that the tax assessment is excessive or should have been made differently never shifts to the Respondent and is placed squarely on the Appellant as Section 30 (a) and (b) of the Tax Appeals Tribunal Act states,a.Where an appeal related to an assessment, that the assessment is excessive; orb.In any other case, that the tax decision should not have been made or should have been made differently.By purporting to shift the burden of proving that the tax assessment against it was incorrect or should have been different the Appellant failed in discharging the burden, placed upon it by law.”

81. The Respondent also relied on Commissioner of Domestic Taxes vs. Metoxide Limited [2021] regarding the burden of proof:

82. The Respondent submitted that the Appellant did not provide the requisite documents to prove that the assessments made were excessive or erroneous. The Appeal is therefore devoid of any merit and ought to be dismissed.

Respondent’s Prayers 83. The Respondent prayed that:a.The Tribunal upholds the Respondent's objection decision as proper and in conformity with the law.b.The Tribunal dismisses the Appeal with costs to the Respondent as the same is devoid any merit.

Issues for Determination 84. The Tribunal upon due consideration of the pleadings of the parties is of the considered view that the issue for determination is:Whether the Objection Invalidation dated 6th June 2022 is justified?

Analysis and Findings 85. The Tribunal having identified the issue for determination proceeds to analyze the same as hereunder

86. The genesis of this Appeal arose from an investigation carried out by the Respondent on the Appellant tax affairs for the period between 2016 and 2020 relating to Import tax, Corporation tax and Value Added Tax.

87. Pursuant to the investigations the Respondent posted assessments to the Appellant’s iTax. Neither party has presented the Tribunal with a summary of the said assessments, however, in the Respondent’s bundle of documents there were five (5) assessment orders totaling to Kshs. 57,167,775. 71.

88. It is not in contention that the Appellant objected in iTax on the 29th January 2022, these objections were acknowledged, and six (6) objection application Acknowledgement Receipts totaling Kshs. 51,197,531. 40 were annexed to the Respondent’s bundle of documents.

89. The Tribunal has reviewed the Objection Application Acknowledgement Receipts and observed that Section C of the said receipts has Objection Application details which contain the “assessment amounts” as well as the “objected amounts”. On each of the six the two amounts were identical, which in the view meant that the Appellant objected to the entire amount assessment.

90. Further the Tribunal sighted in the Appellant’s bundle of documents, a letter from the Respondent dated 16th February 2022 which invalidated the Objections stating the same failed to meet the requirements of Section 51 (3) of the TPA. The Appellant was afforded seven (7) from the date of that letter to validate its Objection by providing information and documents.

91. The Respondent, further communicated to the Appellant on 8th May 2022 reminding the Appellant to validate its Objection, in default whereof, the Respondent would confirm its assessment without any further reference to the Appellant.

92. It was the Appellant’s arguments that the Respondent confirmed the assessment without notifying it.

93. The Tribunal has perused all the documents placed on record and did not establish any evidence to demonstrate that the Appellant validated it objection by providing information and documents as per the aforesaid letter.

94. The Tribunal upon taking into consideration all the evidence in this matter and the laws and authorities finds that the Respondent was justified in invalidating the Appellant’s objection dated 29th January 2022 and confirming the assessments.

Final Decision 95. The upshot of the above finding is that the Appeal is not merited and the Tribunal accordingly proceeds to make the following Orders;a.The Appeal be and is hereby dismissed.b.The Objection invalidation dated 6th June, 2022 be and is hereby upheld.d.Each party to bear its own costs.

96. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 22ND DAY OF MARCH, 2024ROBERT M. MUTUMACHAIRPERSONELISHAH N. NJERUMEMBERMUTISO MAKAUMEMBERMOHAMED A. DIRIYEBERNADETTE M. GITARIJUDGMENT – TAT NO. 70 OF 2023 HIGHBUTY MERCHANTS LIMITED VS. COMMISSIONER FOR DOMESTIC TAXES Page 18