Samson Sportswear (Pvt) Ltd Vs The Commissioner General of Inland Revenue – CA TAX/1/2013-2023

In the case of Samson Sportswear (Pvt) Ltd (including associated group companies) v. The Commissioner General of Inland Revenue, the court examined whether interest paid on a loan taken for working capital requirements should be deductible as an expense incurred in the production of income according to the relevant Inland Revenue Act. It was held that such interest payments are deductible, and disallowance on grounds of being capital expenditure or for failure to meet deductibility test without a proper opportunity to contest is contrary to the principles of natural justice. The judgment reaffirmed that the distinction between “outgoings” and “expenses incurred in the production of income” must be interpreted in light of statutory context and judicial precedent, emphasizing that tax author