IN THE COURT OF APPEAL OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA In the matter of a Case Stated under Section 170 of the Inland Revenue Act No. 10 of 2006.

Samson Sportswear (Pvt) Ltd, No. 110, Kumaran Ratnam Road, P.

O. Box 778, Colombo 02.

Appellant C.A./ Tax/1/2013 Vs.

1. The Commissioner General of Inland Revenue, Sir Chiththampalam A. Gardiner Mawatha, Colombo 02.

Respondent Before : Hon. D.N. Samarakoon, Hon. Sasi Mahendran Counsel : Riad Ameen, with S. Abeygunewardene, instructed by D. L. F. de Saram for the Appellant.

Chaya Sri Nammuni, D. S. G. for the Respondent.

Written Submissions: 08th November 2017 by Appellant 30th November 2017 and 29th June 2022 by Respondent Date : 26th May 2023 D.N. Samarakoon, J.

Introduction:-

Basically, the question is about the interplay between the following sections of Inland Revenue Act No. 10 of 2006, (i) “CHAPTER IV ASCERTAINMENT OF PROFITS OR INCOME

25. (1) Subject to the provisions of subsections (2) and (4), there shall be deducted for the purpose of ascertaining the profits or income of any person from any source, all outgoings and expenses incurred by such person in the production thereof, including…..

(f) interest paid or payable by s