Samson Rajarata Tiles (Pvt) Ltd v Commissioner General of Inland Revenue – CA TAX/0008/2015-2013

In the case between Samson Rajarata Tiles (Pvt) Ltd (Appellant) and the Commissioner General of Inland Revenue (Respondent), the court addressed the issue of the correct identification of the Appellant’s holding company under Section 26(1)(x) of the Inland Revenue Act, the treatment of negative retained earnings (accumulated losses) as “reserves” for the purposes of interest deduction limitations, and the validity of the Assessor’s method for computing “excess” interest. It was held that DSI Samson Group (Pvt) Ltd constituted the Appellant’s holding company, negative accumulated losses could not be treated as reserves, and the inclusion of a deficit in the “excess” interest calculation was legally correct. The findings reaffirmed that, for the purposes of thin capitalization rules, only po