Mrs. C. S. D. B. Mutunayagam, Catherine Tradings v. The Commissioner General of Inland Revenue – CA TAX/48/2019-2021

In the case between Mrs. C. S. D. B. Mutunayagam, sole proprietor of Catherine Tradings (Appellant), and the Commissioner General of Inland Revenue (Respondent), the issue concerned the Appellant’s entitlement to a concessionary 10% tax rate under Item 31 of the Fifth Schedule to the Inland Revenue Act, No. 10 of 2006 (as amended), classification of income as business or rental income, and eligibility for deductions on interest paid for overdrafts. The court determined that the Appellant, who rented warehouse premises, did not meet the statutory requirements for operation and maintenance of storage facilities as contemplated by the Act. Therefore, the income was classified as rental income, not business income, rendering the 10% concession inapplicable. It was further established that only