00:00The Inland Revenue Board must refund tax collected on compulsory land acquisition compensation
00:07following a Court of Appeal ruling that could pave the way for further claims.
00:12A three-member panel led by Justice Azizul Azmi Adnan dismissed LHDN's appeal
00:17against a tax refund ordered for Lush Development, Sendirian Berhad.
00:22Justice Ong Chi Kwan ruled that a 2022 federal court decision declaring
00:27Section 4C of the Income Tax Act unconstitutional applied retrospectively
00:32and was not limited to the company that brought the case.
00:36The provision treated gains from compulsory land acquisitions as income for tax purposes.
00:42Lush Development received RM22.47 million for seven plots of land acquired in Selangor in 2016
00:50and subsequently paid tax on the compensation.
00:53The Court ruled that Section 4C was void from the outset,
00:58rejecting LHDN's argument that tax assessment rules and a five-year refund limit
01:03prevented Lush Development from recovering the money.
01:07LHDN must refund the tax with 5% annual interest from March 8, 2023
01:12and pay RM50,000 in appeal costs.
01:16A similar order was issued for Tanda Bestari Development.
01:20LHDN warned of potential refunds totaling RM600 million,
01:24but the court found its estimate unsupported and refused to limit the ruling to future cases.
01:31Arib Jalaini, FMT.
