The issue for determination on the basis of both the oral and written submissions
on record before the Tribunal is whether the taxation of the capitalized funds
amounted to double taxation and offended the provisions of Article 47 of the
Constitution of Kenya, 2010 as regards the Appellant's entitlement to a fair, legal
and reasonable administrative action on the part of the Respondent.

1. That the tax assessment be stood over as it continues to attract
interest pending determination of the matter.

11. THAT the Commissioner withdraws the additional assessment
which has been issued in contravention to the provisions of the
Income Tax Act, due regard to the facts, circumstances of the case
and the rules of fairness on natural justice.

The Tribunal finds in the circumstances that the amount of Kshs. 111,338,0001=
capitalized in the year 2010 from the statutory reserve by the Appellant was a
taxable transfer for the benefit of the shareholders and the assessment of tax in
respect thereof by the Respondent was appropriate. The Section 19(5)(b) of the
Income Tax Act, CAP 470 of the Laws of Kenya is clear and applicable to the
circumstances precipitating in the filing of this Appeal.
29. The Tribunal upholds the assessment of tax on the foregoing capitalized funds on
the part of the Respondent and accordingly finds that the Appeal has no merit and
proceeds to dismiss the same with costs to the Respondent