Whether Cellini Holdings Limited ’s property-Kajiado/Kaputiei North 2XX1 was exempt from CGT.

Facts of the Case and submissions 

The genesis of this dispute was an objection by Cellini Holdings Limited to the assessment issued by the KRA on the transfer of immovable property on the basis that it was exempt from CGT since the land was agricultural. The KRA was of the contrary opinion and stated that CGT was payable because the land was not agricultural in view of the fact that Cellini Holdings Limited did not, in its books of accounts indicate that it had earned income from agricultural activities and therefore the land was one which was of a commercial nature.

Tribunal’s Analysis and Determination 

The Tribunal noted that pursuant to the following provisions of Section 2 of the ITA, gains or profits from the sale of immovable property is chargeable to tax:

The Tribunal cited the following provisions of Paragraph 36 (d) of the First Schedule to the ITA:

“Property (being land) transferred by an individual where: