JUDGMENT

Lee Hun Hoe CJ:

This is an appeal by the Revenue against the decision of the learned Judge in reversing the determination of the Special Commissioners in respect of the deduction of interest. The question arose on the assessments to income tax made on the Taxpayer for the years of assessment 1972, 1973 and 1974. The Taxpayer was assessed on 16th November, 1974 as follows:-

Year of Original or Income Timber Development

Assessment Additional Tax Tax Tax

1972 Additional RM1,613,701 RM 391,311 RM 192,377

1973 Additional RM1,637,074 RM 344,728 RM 204,104

1974 Original RM9,434,895 RM3,270,544 RM1,172,041

The Taxpayer claimed the following deductions:-

Year of Forest Interest

Assessment Allowance

1972 RM20,832 RM12,273,971

1973 RM18,759 RM17,560,000

1974 RM31,812 RM24,253,426

The Special Commissioners allowed the deductions for forest allowance and there was no appeal on this. However, they rejected the deduction for interest and each gave his own reason. The learned Judge disagreed with them and gave his reasons for doing so. He allowed the appeal and ordered the assessments to be adjusted accordingly.

Mr. Mokhtar bin Haji Sidin appeared with Mr. Nor Azman and Mr. Edward Chia f