SINGAPORE: The High Court dismissed an appeal by the operator of Changi Airport to claim capital allowance on S$ 272 million ( US$ 206 million ) it spent on assets over three years.
In response to capital expenditures made by Changi Airport Group, which was granted a license to maintain Changi Airport in 2009, two airports, several airport, and aprons were made in accordance with the Income Tax Act in 2011, 2012, and 2013.
Capital conclusions can be claimed for certain fixed resources ‘ wear and tear. The volume can be deducted from taxable business income, lowering the amount of corporate taxes due.  ,  ,
CAG’s capital expenses in respect of these goods amounted to S$ 272, 575, 162 across the three times.  , But, the Comptroller of Income Tax denied the investment income statements.  ,
The main point of the debate was how neither party could agree on whether the goods should be referred to as “plants.” Capital allowances will be available for property that fall under the flower concept.
According to the Inland Revenue Authority of Singapore ( IRAS ), a plant refers to the , apparatus with which a person carries on a trade, business or profession. This contrasts with the conditions under which the deal, business, or job are conducted.
According to CAG, the property were “plants” within the significance of the Income Tax Act. The Comptroller disagreed, and he granted CAG commercial building permits on the grounds that the property were structures.  ,
The Income Tax Board of Review determined that the airports, airport, and aprons were no vegetation that qualified for capital accommodations, and CAG later filed an appeal against the Comptroller’s analysis.
Justice Choo Han Teck was then in charge of the case in the High Court.  ,
Justice Choo stated in a ruling from November 1 that he and the board shared the view that the fundamental purpose of the airports, taxiways, and aprons is that they are” structures that allow for aircraft to travel and sleep.”
” Appropriately, it is the premise on which the appellant’s business occurs, as opposed to an equipment used for the trade”, Justice Choo said.  ,
ARGUMENTS
The Comptroller was represented by IRAS attorneys Bjorn Lee Long Jin and Flora Koh Swee Huang, while the CAG was represented by Wong Partnership attorneys Tan Kay Kheng, Tan Shao Tong, and Goh Ziluo.  ,
Mr Tan Kay Kheng, the prospect attorney for CAG, argued that the committee had erred in finding that the runways, taxiways and aprons were more properly classified as structures , despite accepting their operating part in the business.  ,
Both factors had previously agreed that the airports, airport and aprons were “designed to aid and ensure the safe getting, driving, and take-off of airplane” at Terminals, 1, 2, 3 and 4 of Changi Airport.
He even submitted that the airports, airport and apron were” base and important” to the business, as they performed critical capabilities in facilitating the safe landing, rollout, take-off, and ground action of aircraft.  ,
Additionally, he claimed, these assets offered additional functions, such as being navigational tools, preserving the safety of aircraft, and preventing skidding.  ,
Justice Choo and the Comptroller both agreed, saying that aerodrome equipment, which had already been given capital allowances, was primarily responsible for the maintenance of safety and navigation.  ,
The judge and the board agreed that the runways, taxiways, and aprons are basically structures that allow aircraft to travel through and rest, and that is why they are the premise of trade rather than a plant.  ,
The ( runways, taxiways, and aprons ) should be regarded as the “very tools of trade” because they make up the essential components of the means used by the appellant’s trading operations, according to Mr. Tan.
” However, the focus of the inquiry as to the exact operational role of the asset is not on the extent to which it is functional, or integral to the taxpayer’s business,” said Justice Choo.  ,
He claimed that the integral nature of the runways, taxiways, and aprons did not indicate whether they were a plant or a structure.  ,
Justice Choo added that the board was the “primary trier of fact” because it was a specialist tribunal with subject-matter expertise and had the benefit of hearing witness testimony and visiting relevant sites.  ,
” Therefore, as long as there is reasonable ground for the Board’s findings, the court should be slow to intervene, “he added.  ,
He disagreed with CAG that the decision made by the board was unreasonable, or that it erred in law, and therefore affirmed the board’s finding.  ,