Ajitha Ravindra Madanayake v Commissioner General of Inland Revenue – CA TAX 06/2009-2009

In the case between Ajitha Ravindra Madanayake (Appellant) and the Commissioner General of Inland Revenue (Respondent), the court addressed whether a payment of Rs. 61 million received by the Appellant upon resignation from Ceylon Pencil Company Limited constituted taxable “profits from employment” or was exempt as a “gift.” The issues further included the statutory propriety of actions by the Inland Revenue Department, the applicability of tax amnesty provisions, and the procedural validity of assessment and Board of Review processes. It was determined that the payment was properly classified as employment income, not a gift, and that the Commissioner’s assessment process met statutory requirements. The application of tax amnesty was found unwarranted given the facts, and all procedural o