Lecture 60 Β· Traneshvi met the banking test with its books, and a KSh 76 million demand collapsed.
π»ππ πͺπππ πΉπππ: KRA rebuilt Traneshvi's rental income from its bank deposits and billed KSh 76 million. The tribunal and the High Court held that where complete primary records exist the banking test cannot be used, and that money from selling flats and refundable deposits is not income.
Illustration: Precursor
The tax office sets aside your returns, adds up the deposits in your bank accounts, and calls the total your income. Among those deposits are sums that were never income, the proceeds of selling a property, a tenant's refundable deposit, and the question is whether your records can put the method away.
Put yourself in the director's chair. When the authority rebuilds your income from your bank deposits, what in your own records puts the method away?
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Precursor is published by the FinTech Association of Kenya and exercises independent editorial judgement under the Editorial Independence Charter. This article is labelled Precursor Executive Classroom, which marks commercial material. Knowledge on Tax and financial judgement.
Lecture 126 Β· A director kept meeting the taxman instead of appealing, and four years on the bill had only grown.
π»ππ πͺπππ πΉπππ: KRA confirmed a KSh 899,328 income-tax bill against Saphira, and its director spent four years in meetings and relied on his compliance certificates instead of appealing. The tribunal held meetings do not stop the thirty-day clock, a certificate is not proof of payment, and refused leave to appeal out of time; the debt had grown to KSh 1.4 million.
Tax and financial judgement Β· 4 min read Β· Paid
Lecture 125 Β· A rice importer called cleaning and repacking manufacturing, and the court said packaging is not making.
π»ππ πͺπππ πΉπππ: Mjengo claimed an investment deduction on KSh 1.5 million of machinery that cleaned and repackaged imported rice, calling it manufacturing. Through three forums the ruling held that packaging alone is not making goods, the rice remained rice, and a definition framed with 'means' is exhaustive. The deduction was refused.
Tax and financial judgement Β· 4 min read Β· Paid
Lecture 124 Β· A contractor said the money was his clients', had no agreements to show it, and the assessment stood.
π»ππ πͺπππ πΉπππ: KRA billed MU-BEI KSh 1.7 million after its eTIMS invoices far exceeded its declared sales. The company said the money was clients' funds for materials, passed on as an agent, but had no written agency agreements and no reconciliation. The tribunal held VAT fell due on the invoices and dismissed the appeal.
Tax and financial judgement Β· 4 min read Β· Paid