Introduction
1. These consolidated appeals ( HCITA E080/2025 & HCITA 089/2025 ) arise from the judgment of the Tax Appeals Tribunal (“the Tribunal”) delivered on 28th February 2025 in Tax Appeal No. E850 of 2024.
2. In that Judgment, the Tribunal partially allowed an appeal by Branch International Limited (“the taxpayer”) by setting aside the Commissioner’s disallowance of (i) legal and marketing expenses and (ii)bad debt/cash loss. The Tribunal, however, upheld the Commissioner’s disallowance of (i)fraud-related losses and (ii)related party expenses.
Background
3. Brief facts giving rise to the appeals are that in March 2024, the Commissioner of Domestic Taxes (“the Commissioner”) issued the taxpayer with tax assessments covering the 2018 year of income. The assessments disallowed several categories of expenses claimed by Branch Ltd, including:
i. Fraud-related costs (KES 43,459,101);
ii. Related party expenses (KES 8,934,150);
iii. Legal and marketing expenses (KES 32,411,070); and
iv. Bad debts/cash loss (KES 796,715,271).
4. The Commissioner consequently raised additional assessments on corporation tax and VAT, including interests and penalties arising therefrom. Two separate notices of assessment were issued by the Commissioner, one dated 21st March 2024 and the other dated 28th March 2024.
5. The taxpayer lodged two separate notices of objection to the assessments under section 51 of the Tax Procedures Act. The objections were dated 25 April 2024 and 24 May 2024, respectively, and challenged both the substantive tax adjustments and the procedural propriety of the assessments.
6. On 21 June 2024, the Commissioner issued a single objection decision, confirming the assessments and maintaining the disallowance of the disputed expense categories. The Commissioner took the position that the impugned expenses were either insufficiently supported, capital in nature, not wholly and exclusively incurred in the production of income, and were therefore not allowable under the Income Tax Act and applicable guidelines.
7. Being dissatisfied with the objection decision, the taxpayer appealed to the Tax Appeals Tribunal vide Tax Appeal No. E850 of 2024, asserting that the disallowed expenses were deductible, having been incurred ‘wholly and exclusively’ for the generation of the taxable income, in the relevant year.
8. The Commissioner, on the other hand, maintained that the taxpayer failed to discharge its burden of proof under sections 56 of the Tax Procedures Act and 30 of the Tax Appeals Tribunal Act and that the disallowed items were either unsupported, incorrectly characterised, or not deductible in law.
9. Upon considering the evidence and submissions of the parties, the Tribunal delivered its judgment on 28 February 2025, partially allowing the taxpayer’s appeal by setting aside the disallowance of legal and marketing expenses and bad debts, but upholding the Commissioner’s disallowance of fraud related losses and related party expenses.
10. Both parties, being dissatisfied with different aspects of the Tribunal’s determination, lodged the present appeals before this Court, which were subsequently consolidated for hearing and determination.
The Appeals before this Court
11. The Commissioner’s appeal (HCITA No. E080 of 2025 ) challenges the Tribunal’s decision allowing:
i. legal, consulting, and marketing expenses; and
ii. bad debts.
12. The taxpayer’s appeal (HCITA No. E089 of 2025) , on the other hand, challenges the Tribunal’s decision upholding:
i. the disallowance of fraud related losses;
ii. the disallowance of related party expenses; and
iii. the validity of the assessments and objection decision on procedural and constitutional grounds.
13. Given that both appeals arise from the same decision of the Tribunal, involve the same parties, and raise interrelated questions of law, the Court consolidated them and directed that they be heard together.
14. In opposition to the Appeals, both parties filed their respective Statements of Facts (SoF). The Commissioner’s SoF is dated 4 June 2025, whilst that of the taxpayer is dated 28 May 2025.
15. The Appeals were canvassed by way of written submissions. Parties filed submissions separately in each appeal.
16. In HCITA No. E080 of 2025 , the Commissioner, being the Appellant, filed submissions dated 27th May 2025, whilst the taxpayer, being the Respondent in that Appeal, filed their submissions dated 13th June 2025.
17. In HCITA No. E089 of 2025 , the taxpayer, being the Appellant, filed submissions dated 11th July 2025, whilst the Commissioner, as the Respondent, filed submissions dated 4th July 2025.
SUBMISSIONS
A. HCITA No. E080 of 2025: COMMISSIONER OF DOMESTIC TAXES – VS – BRANCH INTERNATIONAL LIMITED
(Commissioner’s Appeal)
Commissioner’s Submissions
18. On whether the appeal was properly on record, the Commissioner submitted that it fully complied with section 53 of the Tax Procedures Act, section 32 of the Tax Appeals Tribunal Act, and Rule 3 of the Tax Appeals Tribunal (Appeals to the High Court) Rules, 2015.
19. The Commissioner asserted that the Tribunal, having delivered its judgment on 28 February 2025, its Notice of Appeal filed on 28 March 2025, and the Memorandum of Appeal filed on 25 April 2025, were all filed within the statutory timelines.
20. It was submitted that contrary to the taxpayer’s allegations, service of the Record of Appeal was properly effected, and that any alleged deficiencies arose only because the Tribunal had not yet supplied the certified proceedings and signed judgment. Relying on Commissioner of Domestic Taxes v Gulf Badr Group (K) Limited [2023] KEHC 26391, the Commissioner asserted that failure to annex a signed judgment where the Tribunal has not issued one should be excused.
21. On the substance of the appeal, the Commissioner submitted that the Tribunal erred in partially allowing the Respondent’s appeal concerning disallowed legal expenses and disallowed cash loss (bad debts). It was argued that the taxpayer failed to meet its statutory burden of proof under sections 56(1) and 59 of the Tax Procedures Act, and section 30 of the Tax Appeals Tribunal Act.
22. With respect to bad debts, the Commissioner submitted that the Tribunal misapprehended Legal Notice No. 37 of 2011, particularly Guideline No. 4, which provides that bad debts of a capital nature are not deductible. The Commissioner argued that the loans advanced by the taxpayer constitute capital, and the Tribunal failed to distinguish between the principal component (capital) and the interest component (revenue).
23. It was further submitted that the taxpayer did not provide adequate documents demonstrating reasonable steps taken to recover the alleged bad debts, nor did it justify the integrity of the data presented. The Commissioner maintained that the taxpayer failed to demonstrate that income from written off loans later recovered had been reported.
24. On legal and marketing expenses, the Commissioner submitted that although the taxpayer provided certain ledgers and invoices, it failed to provide essential transactional documents such as requisition forms, delivery documentation, and proof of settlement. Therefore, the Commissioner’s confirmation of the earlier assessment was justified.
25. The Commissioner emphasized that under section 51 of the Tax Procedures Act, submission of documents in support of an objection only establishes that an objection is validly lodged, but does not relieve the taxpayer of the obligation to prove the correctness of its position. Reliance was placed on Republic v Kenya Revenue Authority; Proto Energy Limited (Ex parte) [2022] KEHC 5, where the Court emphasized the taxpayer's burden to provide sufficient evidence.
26. The Commissioner therefore urged the Court to set aside the Tribunal’s judgment and uphold the Commissioner’s disallowance of legal, consulting, and marketing expenses, and bad debts.
Taxpayer’s Submissions
27. The taxpayer, in its submissions, raised two broad issues. First, procedural and second, substantive.
28. On the procedural aspect, the taxpayer argued that the Commissioner’s appeal to this Court is incurably defective and therefore incompetent for failing to comply with the mandatory provisions of the Tax Appeals Tribunal (Appeals to the High Court) Rules, 2015. It was contended that although the Notice of Appeal was served on 28 March 2025, the Appellant failed to serve a complete, filed, and signed Record of Appeal within 30 days as required under Rule 3.
29. The taxpayer submitted that the Commissioner served an unsigned, unfiled, incomplete version of Volume 2 of the record on 29 April 2025, and only served Volume 1 after being prompted. The taxpayer maintained that both were served out of time, and neither contained a copy of the Tribunal’s decision nor the Notice of Appeal, contrary to Rule 5(e).
30. Relying on Nicholas Kiptoo Arap Korir Salat v IEBC [2014] eKLR and on Commissioner of Legal Services v Temenos EA Limited [2024] KEHC 16713, the taxpayer argued that the appeal, the appeal having been filed out of time and without leave, is incompetent and therefore ought to be struck out.
31. On the substantive aspect, the taxpayer submitted that contrary to the Commissioner’s assertions, the legal, consulting, and marketing expenses were wholly and exclusively incurred in the production of income, as required by section 15(1) of the Income Tax Act.
32. The taxpayer explained that its business involves the provision of unsecured digital microloans, funded largely through borrowings. It highlighted its financing arrangements with, among others, Victory Park Capital Advisors LLC, Barium Capital Ltd, and Nabo Capital Ltd, whose associated legal and marketing costs, was argued, were necessary for raising operational finance.
33. The taxpayer asserted that the Tribunal was right in its finding that the Commissioner erred in rejecting these expenses despite production of facility agreements, debt placement agreements, and invoices from legal and consultancy service providers.
34. On bad debts, the taxpayer submitted that its 2018 write offs of KES 796,715,271 satisfied the requirements of section 15(2)(a) of the Income Tax Act and Legal Notice No. 37 of 2011. It maintained that it had detailed its recovery processes, including reminder notices, CRB listings, and engagement of professional debt collectors.
35. The taxpayer maintained that its loans are unsecured, legal recovery costs exceed the loan amounts, and it took all reasonable steps to collect the debts before writing them off at 90 days past due. It relied on Equity Bank Kenya Ltd v Commissioner of Domestic Taxes [2021] KEHC 8047 to support the argument that satisfaction of even one guideline under Legal Notice No. 37 may justify deduction under Legal Notice No. 37 of 2011.
36. The taxpayer further argued that the Commissioner’s claim that it failed to distinguish principal from interest in the bad debt computation was a new issue raised on appeal, and was never raised at the Tribunal, therefore constituting an impermissible ground of appeal. It relied on Commissioner of Domestic Taxes v Kenya Maltings Limited [2013] KEHC 6073 in support of the argument.
37. The taxpayer asserted that it discharged its burden of proof under section 56(1) of the TPA once it produced primary documents evidencing legal expenses, marketing expenses, and debt recovery efforts. It cited KRA v Man Diesel & Turbo SE [2021] eKLR and Hickman Motors Ltd v Canada [1997] 2 SCR on the shifting nature of evidential burdens.
38. The taxpayer therefore urged the Court to uphold the Tribunal’s decision on both legal and marketing expenses and bad debts, dismiss the Commissioner’s appeal, and/or strike out the appeal with costs.
B. HCITA No. E089 OF 2025: BRANCH INTERNATIONAL LIMITED – VS – COMMISSIONER OF DOMESTIC TAXES
Taxpayer's Submissions
39. The taxpayer faulted the Tribunal for upholding the Commissioner’s decision disallowing “fraud-related loans” and “related party expenses” that the taxpayer had claimed in its tax returns under Section 15(1) of the Income Tax Act.
40. The taxpayer also raised procedural objections to the Commissioner’s assessments and objection decision, citing violations of section 31(4), section 51(11) of the TPA, and Article 47 of the Constitution.
41. On the procedural aspects, it was argued that the Tribunal erred by failing to find that the Commissioner wrongly issued a single objection decision despite the admitted existence of two distinct assessments for the 2018 year of income, namely those dated 28th March 2024 and 21st March 2024 (communicated on 17th May 2024).
42. According to the taxpayer, each assessment triggered a separate objection, and therefore, the issuance of one objection decision purporting to respond to both was unknown to section 51 of the Tax Procedures Act. Consequently, it was asserted that the objection lodged on 25th April 2024 stood allowed by operation of law under section 51(11).
43. The taxpayer further contended that the later assessment was time-barred under section 31(4) of the Tax Procedures Act, having been communicated outside the statutory five-year period, without any allegation or proof of fraud, wilful neglect, or evasion. It was submitted that the Tribunal erred in accepting the respondent’s assertion that the later assessment merely amended the earlier one, a proposition said to be illogical and unsupported by the record.
44. Secondly, the taxpayer challenged the Tribunal’s finding that the assessment dated 28th March 2024 was valid. It was submitted that the assessment failed to disclose reasons or workings, in violation of Article 47 of the Constitution and section 49 of the Tax Procedures Act, and did not conform to the statutory requirements under section 31(8), particularly as it did not specify late payment penalties.
45. Thirdly, the taxpayer argued that the Tribunal erred in upholding the disallowance of fraud-related losses amounting to KES 43,459,101. It was submitted that the losses were directly connected to the appellant’s digital lending business, were irrecoverable, and qualified as deductible expenditure under section 15 of the Income Tax Act. The insistence on concluded criminal investigations was said to reflect an impractical and erroneous approach.
46. Lastly, the taxpayer contested the Tribunal’s decision on related party transactions, submitting that the amounts in issue were intercompany reimbursements recorded as receivables, not loans or deductible expenses. Having provided documentary evidence, the appellant contended that it had discharged its burden of proof and that the Tribunal wrongly upheld the disallowance in the absence of rebuttal evidence from the respondent.
Commissioner’s Submissions
47. The Commissioner submitted that the taxpayer’s appeal raised no arguable questions of law and impermissibly invites the Court to re-evaluate evidence.
48. Relying on section 56 of the Tax Procedures Act, the Commissioner argued that the burden lay on the taxpayer to prove that the tax decision was incorrect, and that appeals to the High Court were confined only to questions of law. It was submitted that the Tribunal correctly set out and applied the applicable legal principles under sections 31, 51, and 56 of the Act.
49. On the objections and assessments, the Commissioner maintained that the objection decision was lawfully issued and that the taxpayer failed to demonstrate any substantive prejudice arising from the process adopted. The Tribunal was therefore correct in upholding the assessment.
50. With respect to fraud-related losses and related party expenses, the Commissioner submitted that the Tribunal properly found that the appellant had not discharged its evidential burden, and its conclusions were neither irrational nor perverse.
Analysis and Determination
51. Having considered the pleadings, the record of appeal, the parties’ submissions, and the applicable law, the Court finds that the consolidated appeals raise the following issues for determination:
i. Whether the appeals before this Court are competent and whether the Court has jurisdiction to entertain them under section 56(2) of the Tax Procedures Act.
ii. Whether the Tax Appeals Tribunal erred in law in allowing the deduction of legal, consulting, and marketing expenses under section 15(1) of the Income Tax Act.
iii. Whether the Tribunal erred in law in allowing the deduction of bad debts under section 15(2)(a) of the Income Tax Act and Legal Notice No. 37 of 2011.
iv. Whether the Tribunal erred in law in upholding the validity of the Commissioner’s assessments and objection decision under sections 31 and 51 of the Tax Procedures Act and Article 47 of the Constitution.
v. Whether the Tribunal erred in law in upholding the disallowance of fraud related losses under section 15 of the Income Tax Act.
vi. Whether the Tribunal erred in law in upholding the disallowance of related party expenses.
Whether the Commissioner’s Appeal is Competent and properly before Court
52. The taxpayer challenged the competence of the appeal on two grounds. First, that the Commissioner failed to comply with the procedural requirements governing appeals from the Tax Appeals Tribunal to this Court, particularly Rules 3 and 5 of the Tax Appeals Tribunal (Appeals to the High Court) Rules, 2015 (“the Rules”). Second, that the appeal offends section 56(2) of the Tax Procedures Act by raising issues of fact rather than questions of law.
53. The question whether an appeal is properly before the Court is jurisdictional and must therefore be determined at the threshold, before the Court may proceed to consider the merits.
54. An appeal from the Tribunal can only be entertained where it is instituted in accordance with the statutory framework established under section 53 of the Tax Procedures Act, section 32 of the Tax Appeals Tribunal Act, and the Rules made thereunder.
55. Section 53 of the Tax Procedures Act entitles a party dissatisfied with a decision of the Tribunal to appeal to the High Court within thirty days of notification of the decision, while section 32(1) of the Tax Appeals Tribunal Act contains a similar provision. Rule 3 of the Rules requires the filing of a memorandum of appeal within thirty days after service of a notice of appeal.
56. In this case, it is not disputed that the Tribunal delivered its judgment on 28 February 2025. The Commissioner lodged its Notice of Appeal on 28 March 2025 and subsequently filed its Memorandum of Appeal on 25 April 2025. These steps were taken within the 30-day timelines prescribed by statute and the Rules. The appeal was therefore properly initiated.
57. It is, however, clear from the documentary trail, and it is admitted by the Appellant, that “Volume 2” was initially served unfiled, and that the filed volumes did not at first include the Tribunal decision as contemplated by Rule 5(e). The Appellant nevertheless later moved and regularized the same.
58. On these facts, the Court agrees that there was procedural default by the Appellant in serving an unfiled volume (volume 2) and in initially omitting mandatory accompaniments. However, two countervailing factors weigh against the draconian remedy of striking out at this stage: the fact that the Notice and Memorandum were filed within the statutory windows, and that the unavailability of a signed judgment and certified proceedings, a matter primarily within the Tribunal’s control, reasonably impeded a complete record.
59. Rule 5 of the Rules provides that a memorandum of appeal shall be accompanied by a copy of the decision of the Tribunal and the notice of appeal. Rule 5 states as follows:
“A memorandum of appeal shall—
(a) be signed by the appellant;
(b) contain an address of service of the appellant;
(c) set out concisely under consecutively numbered distinct heads, the grounds of appeal without any arguments or narrative;
(d) contain an index of all documents supporting the appeal with number of pages at which they appear; and
(e) accompanied by a copy of the decision of the Tribunal and the notice of appeal.”
60. The object of the Rule is practical rather than punitive: to place before the Court the decision under challenge and to ensure that the respondent is properly apprised of the case it must answer.
61. The Commissioner explained, and the explanation was not seriously controverted, that the Tribunal had not availed a signed judgment or certified proceedings despite formal request, and that the Record of Appeal—filed in several volumes because of its bulk—was subsequently completed and regularised before the hearing.
62. Rule 5 does not require that the Tribunal’s decision annexed to the memorandum be a certified or signed copy. Nor does it provide that a delay or default arising from the Tribunal’s own processes automatically renders an appeal incompetent.
63. In Commissioner of Domestic Taxes v Gulf Badr Group (K) Limited [2023] KEHC 26391 (KLR), this Court held that where failure to annex a signed judgment is attributable to the Tribunal and not to indolence or bad faith on the part of the appellant, such omission does not, without more, warrant striking out the appeal. That reasoning applies with equal force here.
64. The taxpayer’s reliance on Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 Others [2014] eKLR is well taken so far as it affirms the importance of procedural discipline. However, the present case concerns curable defects in the record, not non compliance with jurisdictional timelines or conditions precedent.
65. The Court is further guided by Article 159(2)(d) of the Constitution, which obliges courts to administer justice without undue regard to procedural technicalities. While that provision does not excuse disregard of procedural rules, it requires the Court to adopt a purposive approach and to distinguish between defects that go to jurisdiction and those that are curable and non prejudicial.
66. In the present case, the taxpayer was served with the Notice of Appeal and Memorandum of Appeal and participated fully in the proceedings, filing detailed submissions on both procedural and substantive issues. No prejudice has been demonstrated to have arisen from the manner in which the Record of Appeal was compiled or served.
67. The Court is therefore satisfied that the Commissioner substantially complied with the statutory and procedural requirements governing appeals from the Tribunal to this Court, and that the procedural lapses complained of were adequately explained, timeously remedied, and do not justify striking out the appeal.
68. The second procedural objection raised by the taxpayer was that the appeal is incompetent because it raises issues of fact rather than questions of law, contrary to section 56(2) of the Tax Procedures Act.
69. It is settled that this Court has no jurisdiction to re evaluate evidence or interfere with the Tribunal’s findings of fact. However, whether an appeal raises questions of law or fact is determined by examining the substance of the grounds of appeal rather than their form. An appeal raises a question of law where it alleges misinterpretation or misapplication of statute, application of the wrong legal test, or misdirection on the burden of proof. This principle was affirmed by the Court of Appeal in Romageco Kenya Limited v Commissioner of Customs Services.
70. In the present appeal, the Commissioner challenges the Tribunal’s interpretation and application of section 15 of the Income Tax Act, section 56(1) of the Tax Procedures Act, and Legal Notice No. 37 of 2011, particularly on deductibility and burden of proof. These are questions of law, notwithstanding that their resolution may be informed by the factual matrix.
71. As this Court observed in Commissioner of Investigations & Enforcement v Doshi Enterprises Limited [2025] KEHC 4501 (KLR), the application of legal principles to established facts lies squarely within the province of appellate review on points of law.
72. The mere fact that factual considerations form the background against which legal questions arise does not convert an appeal into one of fact.
73. The upshot of the foregoing is that the appeal is hereby held to be competent. Accordingly, the Court will therefore proceed and consider the same on its merits.
Whether the Tribunal erred in allowing Legal, consulting, and marketing expenses
74. The Commissioner contended that the Tribunal erred in law in allowing the taxpayer’s legal, consulting, and marketing expenses incurred during the 2018 year of income. It was argued that the taxpayer failed to discharge the statutory burden of proof and that the Tribunal misapplied section 15 of the Income Tax Act by accepting inadequate documentation.
75. The taxpayer maintained that the impugned expenses were incurred in the ordinary course of its digital lending business, principally in relation to financing arrangements necessary to raise funds for lending operations, and that the Tribunal properly applied the law to the facts placed before it.
76. Section 15(1) of the Income Tax Act, which is the applicable statutory framework, provides that:
“For the purpose of ascertaining the total income of any person for a year of income, there shall, subject to section 16 of this Act, be deducted all expenditure incurred in that year of income which is expenditure wholly and exclusively incurred by him in the production of that income.”
77. Section 16 of the Act sets out categories of non deductible expenses. It is common ground that legal, consultancy, and marketing expenses are not prohibited per se under the provision.
78. In the present case, the Tribunal found that legal and marketing expenses incurred by the taxpayer were in connection with financing arrangements entered into for purposes of raising funds to support its lending operations, and were therefore wholly and exclusively in the production of the income.
79. In reaching that conclusion, the Tribunal relied on documentary evidence, including financing agreements, contractual clauses requiring the Respondent to bear legal and advisory costs, and invoices issued by identified professional service providers.
80. On the basis of that evidence, the Tribunal concluded that the statutory test under section 15(1) had been satisfied and allowed the expenses as deductible.
81. This Court’s appellate jurisdiction is confined to questions of law under section 56(2) of the Tax Procedures Act. It does not extend to re evaluating evidence or substituting the Court’s own factual conclusions for those of the Tribunal.
82. In Romageco Kenya Limited v Commissioner of Customs Services (Civil Appeal No. 37 of 2018), the Court of Appeal reaffirmed that where a statutory tribunal has properly directed itself on the law and arrived at factual findings supported by evidence, an appellate court must not interfere merely because it would have reached a different conclusion.
83. Similarly, in Commissioner of Investigations & Enforcement v Doshi Enterprises Limited [2025] KEHC 4501 (KLR), the Court declined to entertain grounds of appeal that invited a re assessment of evidential sufficiency, holding that such matters lie outside the scope of appellate review on points of law.
84. The test under section 15(1) is whether the expenditure was incurred wholly and exclusively in the production of income. From the statutory scheme, it is evident that the section does not prescribe a rigid evidentiary template nor does it require a taxpayer to produce every conceivable internal document relating to an expense.
85. Courts have consistently held that expenditure incurred in raising working capital or facilitating the conduct of a business is deductible where it is closely connected to income production. In SARS v Pretoria East Motors (Pty) Ltd [2014] ZASCA 91, the Court observed that expenditure incurred bona fide in the course of carrying on income earning operations is deductible provided it is directly linked to those operations.
86. Locally, in Commissioner of Income Tax v Kencell Communications Limited (ITA No. 272 of 2015), the Court recognised that expenditure relating to activities forming part of a taxpayer’s income generating structure is revenue in nature and deductible under section 15.
87. The Tribunal applied these principles and correctly distinguished the Respondent’s legal and marketing expenses from capital expenditure that creates an enduring asset.
88. The Commissioner’s principal complaint—that additional transactional documents such as requisitions, delivery notes, and settlement vouchers were not produced—was considered and rejected by the Tribunal, which found that the contractual documentation and invoices were sufficient to establish incurrence and business relevance.
89. Once the taxpayer produced prima facie evidence demonstrating the nature and purpose of the expenditure, the evidential burden shifted to the Commissioner to show, with specificity, why that evidence failed the statutory test.
90. In Republic v Kenya Revenue Authority; Proto Energy Limited (Ex parte) [2022] KEHC 5 (KLR), the Court held that the Commissioner cannot merely assert insufficiency of evidence without engaging with the material produced or explaining why it fails the statutory test.
91. The Tribunal found that the Appellant did not discharge that evidential burden. That conclusion is a factual determination supported by the record.
92. In the premises, the Court finds that the Tribunal properly directed itself on section 15(1) of the Income Tax Act and the applicable burden of proof provisions. The Appellant has not demonstrated any misdirection in law or jurisdictional error.
93. Accordingly, this ground fails.
Whether the Tribunal Erred in All
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1. These consolidated appeals ( HCITA E080/2025 & HCITA 089/2025 ) arise from the judgment of the Tax Appeals Tribunal (“the Tribunal”) delivered on 28th February 2025 in Tax Appeal No. E850 of 2024.
2. In that Judgment, the Tribunal partially allowed an appeal by Branch International Limited (“the taxpayer”) by setting aside the Commissioner’s disallowance of (i) legal and marketing expenses and (ii)bad debt/cash loss. The Tribunal, however, upheld the Commissioner’s disallowance of (i)fraud-related losses and (ii)related party expenses.
Background
3. Brief facts giving rise to the appeals are that in March 2024, the Commissioner of Domestic Taxes (“the Commissioner”) issued the taxpayer with tax assessments covering the 2018 year of income. The assessments disallowed several categories of expenses claimed by Branch Ltd, including:
i. Fraud-related costs (KES 43,459,101);
ii. Related party expenses (KES 8,934,150);
iii. Legal and marketing expenses (KES 32,411,070); and
iv. Bad debts/cash loss (KES 796,715,271).
4. The Commissioner consequently raised additional assessments on corporation tax and VAT, including interests and penalties arising therefrom. Two separate notices of assessment were issued by the Commissioner, one dated 21st March 2024 and the other dated 28th March 2024.
5. The taxpayer lodged two separate notices of objection to the assessments under section 51 of the Tax Procedures Act. The objections were dated 25 April 2024 and 24 May 2024, respectively, and challenged both the substantive tax adjustments and the procedural propriety of the assessments.
6. On 21 June 2024, the Commissioner issued a single objection decision, confirming the assessments and maintaining the disallowance of the disputed expense categories. The Commissioner took the position that the impugned expenses were either insufficiently supported, capital in nature, not wholly and exclusively incurred in the production of income, and were therefore not allowable under the Income Tax Act and applicable guidelines.
7. Being dissatisfied with the objection decision, the taxpayer appealed to the Tax Appeals Tribunal vide Tax Appeal No. E850 of 2024, asserting that the disallowed expenses were deductible, having been incurred ‘wholly and exclusively’ for the generation of the taxable income, in the relevant year.
8. The Commissioner, on the other hand, maintained that the taxpayer failed to discharge its burden of proof under sections 56 of the Tax Procedures Act and 30 of the Tax Appeals Tribunal Act and that the disallowed items were either unsupported, incorrectly characterised, or not deductible in law.
9. Upon considering the evidence and submissions of the parties, the Tribunal delivered its judgment on 28 February 2025, partially allowing the taxpayer’s appeal by setting aside the disallowance of legal and marketing expenses and bad debts, but upholding the Commissioner’s disallowance of fraud related losses and related party expenses.
10. Both parties, being dissatisfied with different aspects of the Tribunal’s determination, lodged the present appeals before this Court, which were subsequently consolidated for hearing and determination.
The Appeals before this Court
11. The Commissioner’s appeal (HCITA No. E080 of 2025 ) challenges the Tribunal’s decision allowing:
i. legal, consulting, and marketing expenses; and
ii. bad debts.
12. The taxpayer’s appeal (HCITA No. E089 of 2025) , on the other hand, challenges the Tribunal’s decision upholding:
i. the disallowance of fraud related losses;
ii. the disallowance of related party expenses; and
iii. the validity of the assessments and objection decision on procedural and constitutional grounds.
13. Given that both appeals arise from the same decision of the Tribunal, involve the same parties, and raise interrelated questions of law, the Court consolidated them and directed that they be heard together.
14. In opposition to the Appeals, both parties filed their respective Statements of Facts (SoF). The Commissioner’s SoF is dated 4 June 2025, whilst that of the taxpayer is dated 28 May 2025.
15. The Appeals were canvassed by way of written submissions. Parties filed submissions separately in each appeal.
16. In HCITA No. E080 of 2025 , the Commissioner, being the Appellant, filed submissions dated 27th May 2025, whilst the taxpayer, being the Respondent in that Appeal, filed their submissions dated 13th June 2025.
17. In HCITA No. E089 of 2025 , the taxpayer, being the Appellant, filed submissions dated 11th July 2025, whilst the Commissioner, as the Respondent, filed submissions dated 4th July 2025.
SUBMISSIONS
A. HCITA No. E080 of 2025: COMMISSIONER OF DOMESTIC TAXES – VS – BRANCH INTERNATIONAL LIMITED
(Commissioner’s Appeal)
Commissioner’s Submissions
18. On whether the appeal was properly on record, the Commissioner submitted that it fully complied with section 53 of the Tax Procedures Act, section 32 of the Tax Appeals Tribunal Act, and Rule 3 of the Tax Appeals Tribunal (Appeals to the High Court) Rules, 2015.
19. The Commissioner asserted that the Tribunal, having delivered its judgment on 28 February 2025, its Notice of Appeal filed on 28 March 2025, and the Memorandum of Appeal filed on 25 April 2025, were all filed within the statutory timelines.
20. It was submitted that contrary to the taxpayer’s allegations, service of the Record of Appeal was properly effected, and that any alleged deficiencies arose only because the Tribunal had not yet supplied the certified proceedings and signed judgment. Relying on Commissioner of Domestic Taxes v Gulf Badr Group (K) Limited [2023] KEHC 26391, the Commissioner asserted that failure to annex a signed judgment where the Tribunal has not issued one should be excused.
21. On the substance of the appeal, the Commissioner submitted that the Tribunal erred in partially allowing the Respondent’s appeal concerning disallowed legal expenses and disallowed cash loss (bad debts). It was argued that the taxpayer failed to meet its statutory burden of proof under sections 56(1) and 59 of the Tax Procedures Act, and section 30 of the Tax Appeals Tribunal Act.
22. With respect to bad debts, the Commissioner submitted that the Tribunal misapprehended Legal Notice No. 37 of 2011, particularly Guideline No. 4, which provides that bad debts of a capital nature are not deductible. The Commissioner argued that the loans advanced by the taxpayer constitute capital, and the Tribunal failed to distinguish between the principal component (capital) and the interest component (revenue).
23. It was further submitted that the taxpayer did not provide adequate documents demonstrating reasonable steps taken to recover the alleged bad debts, nor did it justify the integrity of the data presented. The Commissioner maintained that the taxpayer failed to demonstrate that income from written off loans later recovered had been reported.
24. On legal and marketing expenses, the Commissioner submitted that although the taxpayer provided certain ledgers and invoices, it failed to provide essential transactional documents such as requisition forms, delivery documentation, and proof of settlement. Therefore, the Commissioner’s confirmation of the earlier assessment was justified.
25. The Commissioner emphasized that under section 51 of the Tax Procedures Act, submission of documents in support of an objection only establishes that an objection is validly lodged, but does not relieve the taxpayer of the obligation to prove the correctness of its position. Reliance was placed on Republic v Kenya Revenue Authority; Proto Energy Limited (Ex parte) [2022] KEHC 5, where the Court emphasized the taxpayer's burden to provide sufficient evidence.
26. The Commissioner therefore urged the Court to set aside the Tribunal’s judgment and uphold the Commissioner’s disallowance of legal, consulting, and marketing expenses, and bad debts.
Taxpayer’s Submissions
27. The taxpayer, in its submissions, raised two broad issues. First, procedural and second, substantive.
28. On the procedural aspect, the taxpayer argued that the Commissioner’s appeal to this Court is incurably defective and therefore incompetent for failing to comply with the mandatory provisions of the Tax Appeals Tribunal (Appeals to the High Court) Rules, 2015. It was contended that although the Notice of Appeal was served on 28 March 2025, the Appellant failed to serve a complete, filed, and signed Record of Appeal within 30 days as required under Rule 3.
29. The taxpayer submitted that the Commissioner served an unsigned, unfiled, incomplete version of Volume 2 of the record on 29 April 2025, and only served Volume 1 after being prompted. The taxpayer maintained that both were served out of time, and neither contained a copy of the Tribunal’s decision nor the Notice of Appeal, contrary to Rule 5(e).
30. Relying on Nicholas Kiptoo Arap Korir Salat v IEBC [2014] eKLR and on Commissioner of Legal Services v Temenos EA Limited [2024] KEHC 16713, the taxpayer argued that the appeal, the appeal having been filed out of time and without leave, is incompetent and therefore ought to be struck out.
31. On the substantive aspect, the taxpayer submitted that contrary to the Commissioner’s assertions, the legal, consulting, and marketing expenses were wholly and exclusively incurred in the production of income, as required by section 15(1) of the Income Tax Act.
32. The taxpayer explained that its business involves the provision of unsecured digital microloans, funded largely through borrowings. It highlighted its financing arrangements with, among others, Victory Park Capital Advisors LLC, Barium Capital Ltd, and Nabo Capital Ltd, whose associated legal and marketing costs, was argued, were necessary for raising operational finance.
33. The taxpayer asserted that the Tribunal was right in its finding that the Commissioner erred in rejecting these expenses despite production of facility agreements, debt placement agreements, and invoices from legal and consultancy service providers.
34. On bad debts, the taxpayer submitted that its 2018 write offs of KES 796,715,271 satisfied the requirements of section 15(2)(a) of the Income Tax Act and Legal Notice No. 37 of 2011. It maintained that it had detailed its recovery processes, including reminder notices, CRB listings, and engagement of professional debt collectors.
35. The taxpayer maintained that its loans are unsecured, legal recovery costs exceed the loan amounts, and it took all reasonable steps to collect the debts before writing them off at 90 days past due. It relied on Equity Bank Kenya Ltd v Commissioner of Domestic Taxes [2021] KEHC 8047 to support the argument that satisfaction of even one guideline under Legal Notice No. 37 may justify deduction under Legal Notice No. 37 of 2011.
36. The taxpayer further argued that the Commissioner’s claim that it failed to distinguish principal from interest in the bad debt computation was a new issue raised on appeal, and was never raised at the Tribunal, therefore constituting an impermissible ground of appeal. It relied on Commissioner of Domestic Taxes v Kenya Maltings Limited [2013] KEHC 6073 in support of the argument.
37. The taxpayer asserted that it discharged its burden of proof under section 56(1) of the TPA once it produced primary documents evidencing legal expenses, marketing expenses, and debt recovery efforts. It cited KRA v Man Diesel & Turbo SE [2021] eKLR and Hickman Motors Ltd v Canada [1997] 2 SCR on the shifting nature of evidential burdens.
38. The taxpayer therefore urged the Court to uphold the Tribunal’s decision on both legal and marketing expenses and bad debts, dismiss the Commissioner’s appeal, and/or strike out the appeal with costs.
B. HCITA No. E089 OF 2025: BRANCH INTERNATIONAL LIMITED – VS – COMMISSIONER OF DOMESTIC TAXES
Taxpayer's Submissions
39. The taxpayer faulted the Tribunal for upholding the Commissioner’s decision disallowing “fraud-related loans” and “related party expenses” that the taxpayer had claimed in its tax returns under Section 15(1) of the Income Tax Act.
40. The taxpayer also raised procedural objections to the Commissioner’s assessments and objection decision, citing violations of section 31(4), section 51(11) of the TPA, and Article 47 of the Constitution.
41. On the procedural aspects, it was argued that the Tribunal erred by failing to find that the Commissioner wrongly issued a single objection decision despite the admitted existence of two distinct assessments for the 2018 year of income, namely those dated 28th March 2024 and 21st March 2024 (communicated on 17th May 2024).
42. According to the taxpayer, each assessment triggered a separate objection, and therefore, the issuance of one objection decision purporting to respond to both was unknown to section 51 of the Tax Procedures Act. Consequently, it was asserted that the objection lodged on 25th April 2024 stood allowed by operation of law under section 51(11).
43. The taxpayer further contended that the later assessment was time-barred under section 31(4) of the Tax Procedures Act, having been communicated outside the statutory five-year period, without any allegation or proof of fraud, wilful neglect, or evasion. It was submitted that the Tribunal erred in accepting the respondent’s assertion that the later assessment merely amended the earlier one, a proposition said to be illogical and unsupported by the record.
44. Secondly, the taxpayer challenged the Tribunal’s finding that the assessment dated 28th March 2024 was valid. It was submitted that the assessment failed to disclose reasons or workings, in violation of Article 47 of the Constitution and section 49 of the Tax Procedures Act, and did not conform to the statutory requirements under section 31(8), particularly as it did not specify late payment penalties.
45. Thirdly, the taxpayer argued that the Tribunal erred in upholding the disallowance of fraud-related losses amounting to KES 43,459,101. It was submitted that the losses were directly connected to the appellant’s digital lending business, were irrecoverable, and qualified as deductible expenditure under section 15 of the Income Tax Act. The insistence on concluded criminal investigations was said to reflect an impractical and erroneous approach.
46. Lastly, the taxpayer contested the Tribunal’s decision on related party transactions, submitting that the amounts in issue were intercompany reimbursements recorded as receivables, not loans or deductible expenses. Having provided documentary evidence, the appellant contended that it had discharged its burden of proof and that the Tribunal wrongly upheld the disallowance in the absence of rebuttal evidence from the respondent.
Commissioner’s Submissions
47. The Commissioner submitted that the taxpayer’s appeal raised no arguable questions of law and impermissibly invites the Court to re-evaluate evidence.
48. Relying on section 56 of the Tax Procedures Act, the Commissioner argued that the burden lay on the taxpayer to prove that the tax decision was incorrect, and that appeals to the High Court were confined only to questions of law. It was submitted that the Tribunal correctly set out and applied the applicable legal principles under sections 31, 51, and 56 of the Act.
49. On the objections and assessments, the Commissioner maintained that the objection decision was lawfully issued and that the taxpayer failed to demonstrate any substantive prejudice arising from the process adopted. The Tribunal was therefore correct in upholding the assessment.
50. With respect to fraud-related losses and related party expenses, the Commissioner submitted that the Tribunal properly found that the appellant had not discharged its evidential burden, and its conclusions were neither irrational nor perverse.
Analysis and Determination
51. Having considered the pleadings, the record of appeal, the parties’ submissions, and the applicable law, the Court finds that the consolidated appeals raise the following issues for determination:
i. Whether the appeals before this Court are competent and whether the Court has jurisdiction to entertain them under section 56(2) of the Tax Procedures Act.
ii. Whether the Tax Appeals Tribunal erred in law in allowing the deduction of legal, consulting, and marketing expenses under section 15(1) of the Income Tax Act.
iii. Whether the Tribunal erred in law in allowing the deduction of bad debts under section 15(2)(a) of the Income Tax Act and Legal Notice No. 37 of 2011.
iv. Whether the Tribunal erred in law in upholding the validity of the Commissioner’s assessments and objection decision under sections 31 and 51 of the Tax Procedures Act and Article 47 of the Constitution.
v. Whether the Tribunal erred in law in upholding the disallowance of fraud related losses under section 15 of the Income Tax Act.
vi. Whether the Tribunal erred in law in upholding the disallowance of related party expenses.
Whether the Commissioner’s Appeal is Competent and properly before Court
52. The taxpayer challenged the competence of the appeal on two grounds. First, that the Commissioner failed to comply with the procedural requirements governing appeals from the Tax Appeals Tribunal to this Court, particularly Rules 3 and 5 of the Tax Appeals Tribunal (Appeals to the High Court) Rules, 2015 (“the Rules”). Second, that the appeal offends section 56(2) of the Tax Procedures Act by raising issues of fact rather than questions of law.
53. The question whether an appeal is properly before the Court is jurisdictional and must therefore be determined at the threshold, before the Court may proceed to consider the merits.
54. An appeal from the Tribunal can only be entertained where it is instituted in accordance with the statutory framework established under section 53 of the Tax Procedures Act, section 32 of the Tax Appeals Tribunal Act, and the Rules made thereunder.
55. Section 53 of the Tax Procedures Act entitles a party dissatisfied with a decision of the Tribunal to appeal to the High Court within thirty days of notification of the decision, while section 32(1) of the Tax Appeals Tribunal Act contains a similar provision. Rule 3 of the Rules requires the filing of a memorandum of appeal within thirty days after service of a notice of appeal.
56. In this case, it is not disputed that the Tribunal delivered its judgment on 28 February 2025. The Commissioner lodged its Notice of Appeal on 28 March 2025 and subsequently filed its Memorandum of Appeal on 25 April 2025. These steps were taken within the 30-day timelines prescribed by statute and the Rules. The appeal was therefore properly initiated.
57. It is, however, clear from the documentary trail, and it is admitted by the Appellant, that “Volume 2” was initially served unfiled, and that the filed volumes did not at first include the Tribunal decision as contemplated by Rule 5(e). The Appellant nevertheless later moved and regularized the same.
58. On these facts, the Court agrees that there was procedural default by the Appellant in serving an unfiled volume (volume 2) and in initially omitting mandatory accompaniments. However, two countervailing factors weigh against the draconian remedy of striking out at this stage: the fact that the Notice and Memorandum were filed within the statutory windows, and that the unavailability of a signed judgment and certified proceedings, a matter primarily within the Tribunal’s control, reasonably impeded a complete record.
59. Rule 5 of the Rules provides that a memorandum of appeal shall be accompanied by a copy of the decision of the Tribunal and the notice of appeal. Rule 5 states as follows:
“A memorandum of appeal shall—
(a) be signed by the appellant;
(b) contain an address of service of the appellant;
(c) set out concisely under consecutively numbered distinct heads, the grounds of appeal without any arguments or narrative;
(d) contain an index of all documents supporting the appeal with number of pages at which they appear; and
(e) accompanied by a copy of the decision of the Tribunal and the notice of appeal.”
60. The object of the Rule is practical rather than punitive: to place before the Court the decision under challenge and to ensure that the respondent is properly apprised of the case it must answer.
61. The Commissioner explained, and the explanation was not seriously controverted, that the Tribunal had not availed a signed judgment or certified proceedings despite formal request, and that the Record of Appeal—filed in several volumes because of its bulk—was subsequently completed and regularised before the hearing.
62. Rule 5 does not require that the Tribunal’s decision annexed to the memorandum be a certified or signed copy. Nor does it provide that a delay or default arising from the Tribunal’s own processes automatically renders an appeal incompetent.
63. In Commissioner of Domestic Taxes v Gulf Badr Group (K) Limited [2023] KEHC 26391 (KLR), this Court held that where failure to annex a signed judgment is attributable to the Tribunal and not to indolence or bad faith on the part of the appellant, such omission does not, without more, warrant striking out the appeal. That reasoning applies with equal force here.
64. The taxpayer’s reliance on Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 Others [2014] eKLR is well taken so far as it affirms the importance of procedural discipline. However, the present case concerns curable defects in the record, not non compliance with jurisdictional timelines or conditions precedent.
65. The Court is further guided by Article 159(2)(d) of the Constitution, which obliges courts to administer justice without undue regard to procedural technicalities. While that provision does not excuse disregard of procedural rules, it requires the Court to adopt a purposive approach and to distinguish between defects that go to jurisdiction and those that are curable and non prejudicial.
66. In the present case, the taxpayer was served with the Notice of Appeal and Memorandum of Appeal and participated fully in the proceedings, filing detailed submissions on both procedural and substantive issues. No prejudice has been demonstrated to have arisen from the manner in which the Record of Appeal was compiled or served.
67. The Court is therefore satisfied that the Commissioner substantially complied with the statutory and procedural requirements governing appeals from the Tribunal to this Court, and that the procedural lapses complained of were adequately explained, timeously remedied, and do not justify striking out the appeal.
68. The second procedural objection raised by the taxpayer was that the appeal is incompetent because it raises issues of fact rather than questions of law, contrary to section 56(2) of the Tax Procedures Act.
69. It is settled that this Court has no jurisdiction to re evaluate evidence or interfere with the Tribunal’s findings of fact. However, whether an appeal raises questions of law or fact is determined by examining the substance of the grounds of appeal rather than their form. An appeal raises a question of law where it alleges misinterpretation or misapplication of statute, application of the wrong legal test, or misdirection on the burden of proof. This principle was affirmed by the Court of Appeal in Romageco Kenya Limited v Commissioner of Customs Services.
70. In the present appeal, the Commissioner challenges the Tribunal’s interpretation and application of section 15 of the Income Tax Act, section 56(1) of the Tax Procedures Act, and Legal Notice No. 37 of 2011, particularly on deductibility and burden of proof. These are questions of law, notwithstanding that their resolution may be informed by the factual matrix.
71. As this Court observed in Commissioner of Investigations & Enforcement v Doshi Enterprises Limited [2025] KEHC 4501 (KLR), the application of legal principles to established facts lies squarely within the province of appellate review on points of law.
72. The mere fact that factual considerations form the background against which legal questions arise does not convert an appeal into one of fact.
73. The upshot of the foregoing is that the appeal is hereby held to be competent. Accordingly, the Court will therefore proceed and consider the same on its merits.
Whether the Tribunal erred in allowing Legal, consulting, and marketing expenses
74. The Commissioner contended that the Tribunal erred in law in allowing the taxpayer’s legal, consulting, and marketing expenses incurred during the 2018 year of income. It was argued that the taxpayer failed to discharge the statutory burden of proof and that the Tribunal misapplied section 15 of the Income Tax Act by accepting inadequate documentation.
75. The taxpayer maintained that the impugned expenses were incurred in the ordinary course of its digital lending business, principally in relation to financing arrangements necessary to raise funds for lending operations, and that the Tribunal properly applied the law to the facts placed before it.
76. Section 15(1) of the Income Tax Act, which is the applicable statutory framework, provides that:
“For the purpose of ascertaining the total income of any person for a year of income, there shall, subject to section 16 of this Act, be deducted all expenditure incurred in that year of income which is expenditure wholly and exclusively incurred by him in the production of that income.”
77. Section 16 of the Act sets out categories of non deductible expenses. It is common ground that legal, consultancy, and marketing expenses are not prohibited per se under the provision.
78. In the present case, the Tribunal found that legal and marketing expenses incurred by the taxpayer were in connection with financing arrangements entered into for purposes of raising funds to support its lending operations, and were therefore wholly and exclusively in the production of the income.
79. In reaching that conclusion, the Tribunal relied on documentary evidence, including financing agreements, contractual clauses requiring the Respondent to bear legal and advisory costs, and invoices issued by identified professional service providers.
80. On the basis of that evidence, the Tribunal concluded that the statutory test under section 15(1) had been satisfied and allowed the expenses as deductible.
81. This Court’s appellate jurisdiction is confined to questions of law under section 56(2) of the Tax Procedures Act. It does not extend to re evaluating evidence or substituting the Court’s own factual conclusions for those of the Tribunal.
82. In Romageco Kenya Limited v Commissioner of Customs Services (Civil Appeal No. 37 of 2018), the Court of Appeal reaffirmed that where a statutory tribunal has properly directed itself on the law and arrived at factual findings supported by evidence, an appellate court must not interfere merely because it would have reached a different conclusion.
83. Similarly, in Commissioner of Investigations & Enforcement v Doshi Enterprises Limited [2025] KEHC 4501 (KLR), the Court declined to entertain grounds of appeal that invited a re assessment of evidential sufficiency, holding that such matters lie outside the scope of appellate review on points of law.
84. The test under section 15(1) is whether the expenditure was incurred wholly and exclusively in the production of income. From the statutory scheme, it is evident that the section does not prescribe a rigid evidentiary template nor does it require a taxpayer to produce every conceivable internal document relating to an expense.
85. Courts have consistently held that expenditure incurred in raising working capital or facilitating the conduct of a business is deductible where it is closely connected to income production. In SARS v Pretoria East Motors (Pty) Ltd [2014] ZASCA 91, the Court observed that expenditure incurred bona fide in the course of carrying on income earning operations is deductible provided it is directly linked to those operations.
86. Locally, in Commissioner of Income Tax v Kencell Communications Limited (ITA No. 272 of 2015), the Court recognised that expenditure relating to activities forming part of a taxpayer’s income generating structure is revenue in nature and deductible under section 15.
87. The Tribunal applied these principles and correctly distinguished the Respondent’s legal and marketing expenses from capital expenditure that creates an enduring asset.
88. The Commissioner’s principal complaint—that additional transactional documents such as requisitions, delivery notes, and settlement vouchers were not produced—was considered and rejected by the Tribunal, which found that the contractual documentation and invoices were sufficient to establish incurrence and business relevance.
89. Once the taxpayer produced prima facie evidence demonstrating the nature and purpose of the expenditure, the evidential burden shifted to the Commissioner to show, with specificity, why that evidence failed the statutory test.
90. In Republic v Kenya Revenue Authority; Proto Energy Limited (Ex parte) [2022] KEHC 5 (KLR), the Court held that the Commissioner cannot merely assert insufficiency of evidence without engaging with the material produced or explaining why it fails the statutory test.
91. The Tribunal found that the Appellant did not discharge that evidential burden. That conclusion is a factual determination supported by the record.
92. In the premises, the Court finds that the Tribunal properly directed itself on section 15(1) of the Income Tax Act and the applicable burden of proof provisions. The Appellant has not demonstrated any misdirection in law or jurisdictional error.
93. Accordingly, this ground fails.
Whether the Tribunal Erred in All
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