ZF v Comptroller of Income Tax: Capital Allowances & Definition of Plant under Income Tax Act
In ZF v Comptroller of Income Tax, the Court of Appeal of Singapore heard an appeal regarding the classification of portable and demountable dormitories under the Income Tax Act. ZF, the appellant, claimed capital allowances for the dormitories, arguing they were 'plant,' while the Comptroller of Income Tax, the respondent, disallowed the claim, contending they were buildings. The court allowed the appeal, holding that the dormitories qualified as 'plant' due to their temporary nature and portability.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal Allowed
1.3 Case Type
Tax
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The Court of Appeal held that portable and demountable dormitories were 'plant' under the Income Tax Act, allowing capital allowances. The key issue was whether the dormitories qualified as 'plant' or 'building'.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Comptroller of Income Tax | Respondent | Government Agency | Appeal Dismissed | Lost | Quek Hui Ling of Inland Revenue Authority of Singapore Irving Aw of Inland Revenue Authority of Singapore |
| ZF | Appellant | Corporation | Appeal Allowed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Sek Keong | Chief Justice | No |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | Yes |
| V K Rajah | Justice of the Court of Appeal | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Quek Hui Ling | Inland Revenue Authority of Singapore |
| Irving Aw | Inland Revenue Authority of Singapore |
| Tan Shao Tong | WongPartnership LLP |
| Leung Yew Kwong | WongPartnership LLP |
4. Facts
- ZF was awarded a contract to build and operate workers’ dormitories on a site at [XXX] Road.
- The site was leased from the Building and Construction Authority for a term of three years, with possible extensions.
- The tenancy agreement allowed BCA to require the site to be vacated within 90 days of notice.
- ZF constructed portable and demountable dormitories due to the short lease term and potential for early termination.
- The dormitories comprised six blocks of three-storey workers’ quarters and a two-storey administration block.
- The total cost of installing the dormitories was $3,755,455, with $2,617,588 claimed as capital expenditure on movable parts.
- The Comptroller of Income Tax disallowed ZF's claim for capital allowances.
5. Formal Citations
- ZF v Comptroller of Income Tax, Civil Appeal No 12 of 2010, [2010] SGCA 48
- ZF v Comptroller of Income Tax, , [2010] 2 SLR 350
- ZF v Comptroller of Income Tax, , [2008] SGITBR 2
6. Timeline
| Date | Event |
|---|---|
| Lease for the Site began | |
| [C] Pte Ltd awarded a contract to design, build and operate the workers’ dormitories to a company named [Z] Pte Ltd | |
| Appellant made a claim for capital allowances for the Year of Assessment 2004 | |
| Judgment reserved | |
| Decision Date |
7. Legal Issues
- Definition of Plant
- Outcome: The court held that the portable dormitories qualified as 'plant' under the Income Tax Act.
- Category: Substantive
- Sub-Issues:
- Distinction between plant and building
- Functional test
- Premises test
- Temporary vs. permanent structures
8. Remedies Sought
- Capital Allowances
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Tax Litigation
11. Industries
- Construction
- Accommodation
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| ZF v Comptroller of Income Tax | High Court | Yes | [2010] 2 SLR 350 | Singapore | The High Court decision which was appealed against in the current judgment. |
| ZF v Comptroller of Income Tax | Income Tax Board of Review | Yes | [2008] SGITBR 2 | Singapore | The Income Tax Board of Review decision which was appealed against in the High Court. |
| Commissioners of Inland Revenue v British Salmson Aero Engines, Limited | English Court of Appeal | Yes | [1938] 2 KB 482 | England and Wales | Cited for the principle that income tax is a tax on income, not capital. |
| ABD Pte Ltd v Comptroller of Income Tax | Singapore High Court | Yes | [2010] 3 SLR 609 | Singapore | Cited for the principle that capital expenditure is generally not deductible for income tax purposes unless expressly provided for in the ITA. |
| Comptroller of Income Tax v GE Pacific Pte Ltd | Court of Appeal | Yes | [1994] 2 SLR(R) 948 | Singapore | Cited for the rationale behind capital allowances, which is the depreciation of fixed assets. |
| Yarmouth v France | English Court of Appeal | Yes | 19 QBD 647 | England and Wales | Cited for the definition of 'plant' as including whatever apparatus is used by a business man for carrying on his business. |
| Cole Bros Ltd v Phillips (H M Inspector of Taxes) | English Court of Appeal | Yes | 55 TC 188 | England and Wales | Cited as a key case elaborating on the definition of 'plant' and the difficulties in reconciling various authorities. |
| Cooke (Inspector of Taxes) v Beach Station Caravans Ltd | English High Court | Yes | [1974] 1 WLR 1398 | England and Wales | Cited for the observation that the matter of determining whether something is 'plant' is one of impression. |
| Commissioner of Inland Revenue v Barclay, Curle & Co Ltd | House of Lords | Yes | [1969] 1 WLR 675 | United Kingdom | Cited for the principle that a structure can simultaneously be a building and 'plant' if it performs an independent operation in the taxpayer's business. |
| Wangaratta Woollen Mills Limited v The Commissioner of Taxation of the Commonwealth of Australia | High Court of Australia | Yes | 119 CLR 1 | Australia | Cited as a contrasting case where a dyehouse was held to be 'plant' but its external walls and roof were not. |
| Jarrold (Inspector of Taxes) v John Good & Sons Ltd | English Court of Appeal | Yes | [1963] 1 WLR 214 | England and Wales | Cited for the principle that movable internal partitions can be 'plant'. |
| Schofield (H M Inspector of Taxes) v R & H Hall Ltd | Court of Appeal of Northern Ireland | Yes | 49 TC 538 | Northern Ireland | Cited for the principle that silos can simultaneously constitute a building and 'plant'. |
| Dixon (Inspector of Taxes) v Fitch’s Garage Ltd | English High Court | Yes | [1976] 1 WLR 215 | England and Wales | Cited as a contrasting case where a canopy over a petrol station was held not to be 'plant'. |
| Benson (H M Inspector of Taxes) v Yard Arm Club Ltd | Court | Yes | 53 TC 67 | England and Wales | Cited for the principle that a ship converted into a floating restaurant is not 'plant'. |
| Inland Revenue Commissioners v Scottish & Newcastle Breweries | House of Lords | Yes | [1982] 1 WLR 322 | United Kingdom | Cited for the distinction between the place where a trade is carried on and the apparatus used as an adjunct of the trade. |
| St John’s School v Ward (H M Inspector of Taxes) | English High Court | Yes | 49 TC 524 | England and Wales | Cited for the principle that gymnasiums and chemical laboratories constructed from prefabricated panels are not 'plant'. |
| Wimpy International Ltd v Warland (Inspector of Taxes) | English High Court | Yes | [1988] STC 149 | England and Wales | Cited for the analysis of the distinction between 'plant' and 'premises'. |
| Wimpy International Ltd v Warland (Inspector of Taxes) | English Court of Appeal | Yes | [1989] STC 273 | England and Wales | Cited for the analysis of the distinction between 'plant' and 'premises'. |
| Carr (H M Inspector of Taxes) v Sayer | Court | Yes | 65 TC 15 | England and Wales | Cited for the principle that 'plant' carries a connotation of equipment or apparatus and does not include buildings in general. |
| Gray (Inspector of Taxes) v Seymours Garden Centre (Horticulture) | English Court of Appeal | Yes | 67 TC 401 | England and Wales | Cited for the principle that a planteria is a purpose-built structure rather than 'plant'. |
| Attwood (Inspector of Taxes) v Anduff Car Wash Ltd | English Court of Appeal | Yes | [1997] STC 1167 | England and Wales | Cited for the principle that a wash hall is a building, even if specially designed. |
| Commissioner of Inland Revenue v Waitaki International Ltd | New Zealand Court of Appeal | Yes | [1990] 3 NZLR 27 | New Zealand | Cited for the principle that an entire cold-store or freezer can be 'plant'. |
| Imperial Chemical Industries of Australia and New Zealand Limited v Commissioner of Taxation of the Commonwealth of Australia | High Court of Australia | Yes | 120 CLR 396 | Australia | Cited for the principle that ceiling panels and electric fittings in a building do not constitute 'plant'. |
| J Lyons & Company, Limited v Attorney-General | Court | Yes | [1944] 1 Ch 281 | England and Wales | Cited for the principle that electric lamps and fittings are not 'plant'. |
| Hampton (Inspector of Taxes) v Fortes Autogrill Ltd | Court | Yes | 53 TC 691 | England and Wales | Cited for the principle that false ceilings are part of the premises. |
| Quarries Ltd v Federal Commissioner of Taxation | High Court of Australia | Yes | 106 CLR 310 | Australia | Cited for the principle that portable sleeping units can be 'plant'. |
| Case A43 | Australian Income Tax Board of Review | Yes | 69 ATC 244 | Australia | Cited for the principle that sheds erected temporarily on a work site can be 'plant'. |
| NP v Comptroller of Income Tax | Singapore High Court | Yes | [2007] 4 SLR(R) 599 | Singapore | Cited for the principle that appeals from the Board to the High Court can only be on a question of law or mixed law and fact. |
| Edwards (Inspector of Taxes) v Bairstow | House of Lords | Yes | [1956] AC 14 | United Kingdom | Cited for the rationale that courts do not interfere with commissioners' findings when they involve only questions of fact. |
| JD Ltd v Comptroller of Income Tax | Court of Appeal | Yes | [2006] 1 SLR(R) 484 | Singapore | Cited regarding whether income tax appeals before the Court of Appeal should be heard in camera. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Income Tax Act (Cap 134, 2008 Rev Ed) ss 19 | Singapore |
| Income Tax Act (Cap 134, 2008 Rev Ed) ss 19A | Singapore |
| UK Customs and Inland Revenue Act 1878 (c 15) | United Kingdom |
| UK Income Tax Act 1918 (c 40) | United Kingdom |
| UK Income Tax Act 1945 (c 32) | United Kingdom |
| Income Tax Ordinance (No 39 of 1947) ss 16–22 | Singapore |
| UK Employers’ Liability Act 1880 (c 42) | United Kingdom |
| UK Finance Act 1971 | United Kingdom |
| UK Income Tax Act 1952 (c 10) | United Kingdom |
| UK Capital Allowances Act 1968 (c 3) | United Kingdom |
| Income Tax Act s 18(6) | Singapore |
| Income Tax Act s 18(1)(h) | Singapore |
| Income Tax Act s 81(2) | Singapore |
| Income Tax Act s 83(1) | Singapore |
| Income Tax and Social Services Contribution Assessment Act 1936–1957 (Cth) | Australia |
15. Key Terms and Keywords
15.1 Key Terms
- Plant
- Capital Allowances
- Dormitories
- Portable
- Demountable
- Income Tax Act
- Building
- Premises
- Setting
- Apparatus
15.2 Keywords
- Plant
- Capital Allowances
- Income Tax
- Dormitories
- Singapore
- Portable
- Demountable
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Income taxation | 90 |
| Taxation | 80 |
| Administrative Law | 20 |
16. Subjects
- Taxation
- Capital Allowances
- Definition of Plant