Director General, Mauritius Revenue Authority (Appellant) v Claude Didier de Senneville and 7 others (Respondents) (Mauritius)

Hearing listed

Case summary
Appeal

Case summary

Case ID

JCPC/2024/0063

Jurisdiction

Mauritius

Parties

Appellant(s)

Mauritius Revenue Authority

Respondent(s)

(1) Claude Didier de Senneville,

(2) Marie Henri Dominique Galea,

(3) Philipe Louis Gerard Dupont de Rivaltz Saint Antione,

(4) Damien Herve Menage,

(5) Simon Charles Menage,

(6) Cecilia Julie Menage,

(7) Marie Alice Menage,

(8) Marie Francoise Alice Martine Menage (born Koenig)

Issue

Did the Supreme Court of Mauritius err in finding that, for the purposes of computing taxable profit arising from the sale of 93 plots following the parcelling of land, it was the value of the land ‘just before its development’, and not its historical cost at the date of acquisition, which should be taken into account pursuant to s.10(3) of the Income Tax Act 1995?

Facts

The Respondents were associates in Société du Vieux Moulin (“SDVM”). In 1988, SDVM purchased the relevant land as bare land. The cost of the land, (“the historical cost”) was Rs1,607,000. The land was surveyed in 1994. In 1996, SDVM applied for an EIA licence for a proposed subdivision of the whole land into 91 lots. The EIA licence was issued in 1999. SDVM produced a valuation report to show that the revalued market value of the land as at March 1999, just before its development, was Rs41,793,000. In 2003, SDVM obtained a morecellement permit for the parcelling of the land into 93 residential lots, which were subsequently sold. The land had therefore remained undeveloped from 1988 until December 2003. It was the only land purchased and developed by SDVM. For the purpose of computing its taxable profit from the sale of the 93 lots, SDVM used the market value of the land as at March 1999 as the cost of the land and deducted that revalued amount as an expense. The Appellant assessed SDVM on the basis that the historical cost of the land should be used to calculate taxable profit. The Assessment Review Committee (“the Committee”) held that it was the value of the land just before development, and not the historical cost, which had to be taken into account. The Appellant appealed to the Supreme Court of Mauritius which affirmed the decision of the Committee. It held that s.10(3)(a) of the Income Tax Act 1995 applied; SDVM were in fact engaged in an “undertaking or scheme entered into or devised for the purpose of making a profit”. The Appellant now appeals to the Judicial Committee of the Privy Council.