COMMISSIONER OF INCOME TAX
V.
KENCELL COMMUNICATIONS LIMITED

JUDGMENT OF THE COURT

1. The facts giving rise to this appeal are not contested and are fairly straight forward. On 29^th April, 2005 the Commissioner of Income Tax (appellant) filed an Income Tax Appeal before the High Court. It was an appeal from the decision of the Local Committee for Nairobi dated 16^th March 2005, Assessment No.098520010001/4 year of Income 2001, against Kencell Communications Ltd (respondent). The appeal was filed pursuant to Rule 4 of the Income Tax Appeals to the High Court Rules.

2. In the memorandum of appeal that was filed by the appellant in the High Court, they raised the following grounds:

1. The Local Committee erred in Law and in fact in holding that a one-off payment for fifteen year licence fee is revenue expenditure deductible.

2. That the Local Committee erred in Law and in fact in failing to take into account that the license fee was for the purchase of a right to access the Kenya Telecommunication market through allocation of a GSM spectrum or a band w…