Commissioner General of Inland Revenue v. Ravindra Lalith Kumararatne – CA TAX APPEAL NO. 01/2007-2021

In the case between Ravindra Lalith Kumararatne (Appellant) and The Commissioner General of Inland Revenue (Respondent), the court addressed the issue of liability for income tax on capital gains arising from the exchange of shares in Forbes & Walker Limited (FWL) for shares and warrants in The Ondaatje Corporation of Canada (TOC) under the Inland Revenue Act No. 28 of 1979. It was held that the transaction constituted a “change of ownership” under Section 7(1)(a), and not an “amalgamation or merger” under Section 7(1)(g) as claimed by the Appellant. The court reaffirmed the principle that capital gains liability arises on the change of ownership of shares, irrespective of whether consideration received was monetary. This decision relied on interpretation of the Inland Revenue Act and conf