JUDGMENT

Supang Lian, Azmi Ariffin, Ismail Brahim JJCA:

[1] The Court of Appeal unanimously dismissed the Taxpayer's appeal against the High Court 's decision. The dispute revolved around the Taxpayer, being an insurance company, claiming that it operated two 'distinct' businesses that were unrelated to its insurance business, namely, sub-lease of unoccupied premises in Menara MAA in Kuching and Kota Kinabalu and operation of Casa Rachado Resort in Port Dickson.

[2]The lease of Menara MAA Kuching and Kota Kinabalu and the acquisition of Casa Rachado Resort were funded by the Life Fund of its life insurance business. Initially, the income from these sources was declared as rental income but was later reclassified as business income under s 4(a) of the Income Tax Act 1967 (" ITA 1967"). The Revenue rejected this reclassification, treating the income as Life Fund income, as it was gross income from investments made from the Taxpayer's Life Fund that would fall under s 60(3)(a) of the 1967.

[3]The Taxpayer contended that these businesses should be taxed separately as business income under s 4(a) of the ITA 1967 as the businesses by its very nature, do not qualify as an investme