Conditions relating to property disposal determine tax liability dates under relevant statutes.

[1] The appellant, Kenny Heights Development Sdn Bhd ("KHD") appealed to this court against the decision of the High court made on 22 May 2014, to allow with costs of RM5,000.00 the appeal by the respondent, Ketua Pengarah Hasil Dalam Negeri ("the KPHDN") against the deciding order of the Special Commissioners of Income Tax ("the SCIT") which set aside the determination by the KPHDN dated 1 March 2013.

Brief Facts

[2] The brief facts may be stated as follows:

(a) This case concerns agreements both dated 14 August 2000 ("the S/P agreements") for the sale by KHD of the subject lands in the respective agreements to Mycom Berhad and to Olympia Industries Berhad.

(b) The S/P agreements were subject to pre-conditions as follows:

i. Approval of the Securities Commission for the transfer of "consideration shares" to KHD;

ii. Approval of the Securities Commission to list the consideration shares;

iii. Approval of the Securities Commission for the acquisition of the lands according to the respective agreements;

iv. Corporate approvals;

v. Restructuring and Standstill Agreement becoming unconditional;

vi. All approvals in connection with completion of the proposed restructuring scheme being obtained; and

vii. Such other approvals as required by third parties or the Government, enforcement agency or any authority having jurisdiction over the sale of the said subject lands under the respective agreements.

(c) By supplemental agreements both dated 14 February 2003, the sale and purchase price was reduced.

(d) The pre-conditions having been satisfied by 27 April 2007, KHD submitted the notices "Notis Tahun Taksiran 2000" and "Notis Tahun Taksiran 2000 (Tambahan)", both dated 31 December 2008 to the KPHDN in respect of the disposal of the lands under the two agreements.

(e) KHD being dissatisfied with the assessment by the KPHDN, appealed to the SCIT.

Issues Before The SCIT

[3] KHD's submissions put the issues before the SCIT as follows:

"(a) Whether there was any disposal of the subject land in YA 2000 and YA 2000 (additional) within the meaning of para 16, Sch 2, Real Property Gains Tax Act 1976 .

(b) Whether the disposal of subject lands by KHD is exempted from Real Property Gains Tax under the RPGT (Exemption) (No 2) Order 2007, PU(A) 146 dated 27 November 2007, which order exempted disposals after 31 March 2007 to 31 December 2009.

(c) Whether there were any chargeable gains in the year 2000 within the meaning of s 3, Real Property Gains Tax Act 1976 ."

[4] The submissions for the KPHDN before the SCIT set out the issues as follows:

"(a) Sama ada tarikh pelupusan bagi lot no 21759 hingga lot no 21768 adalah dikira pada tarikh perjanjian ditandatangani pada 14 Ogos 2000 atau dikira pada tarikh apabila pra-syarat ("conditions precedent") di dalam perjanjian dipenuhi di bawah Perenggan 16, Jadual (ACKHT) [sebelum pindaan 2 September 2006]; dan/atau

(b) Sama ada harga balasan ("consideration") bagi pelupusan lot no 21759 hingga lot no 21768 telah ditentukan pada tarikh perjanjian ditandatangani atau harga balasan hanya ditentukan apabila segala pra-syarat dipenuhi bagi tujuan taksiran di bawah ACKHT) [sebelum pindaan 2 September 2006]; dan

(c) Sama ada Notis Taksiran bertarikh 31 Disember 2008 adalah tertakluk kepada Akta Had Masa."

[5] Per the case stated by the SCIT, the issues were:

"(a) Whether the disposal of the subject lands by KHD should be held as having taken place on the date of two agreements namely:

i. Land Acquisition Agreement dated 14 August 2000 between KHD and Mycom Berhad; and

ii. Land Acquisition Agreement dated 14 August 2000 between KHD and Olympia Industries Berhad, were signed on 14 August 2000, or based on the date of the last conditio