In a published decision that provides practical guidance on appeal procedure, the Income Tax Board of Review (the “Board”) has addressed the requirements for introducing new grounds of appeal in a tax dispute concerning capital allowance claims for a cement silo.
Background
The taxpayer, GIW, had appealed to the Board against the Comptroller’s disallowance of capital allowance claims for expenditure incurred in constructing a cement silo. The original Petition of Appeal (POA) advanced a single ground: that the cement silo constituted an “integrated whole” qualifying as “plant” under Section 19A of the Income Tax Act 1947, applying the test in ZF v Comptroller of Income Tax [2010] SGCA 48.
The Procedural Issue
In its Opening Submissions, GIW abandoned the “integrated whole” argument and instead contended that specific components of the silo—namely the “inverted cone”, “silo walls” and “silo discharge system”—constituted “plant” or “machinery” in their own right. GIW explained this change was necessitated by the High Court’s decision in Singapore Cement Manufacturing Co (Pte) Ltd v Comptroller of Income Tax [2023] 5 SLR 1099, which held that a cement silo is a building rather than plant .
The Comptroller objected, arguing that GIW was introducing new grounds requiring the Board’s consent under Section 79(12) of the Act.
The Board’s Decision
The Board held that GIW’s Opening Submissions did contain new grounds not stated in the POA, for which consent was required. However, the Board granted consent subject to terms addressing prejudice to the Comptroller.
Key aspects of the Board’s reasoning include:
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Timing of Application: The new grounds were raised before the hearing commenced and before witness cross-examination, which weighed in favour of granting consent.
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Delay Consideration: While the arguments could have been raised earlier (the Singapore Cement decision was released in 2023), the delay was not so significant as to justify refusing consent.
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Prejudice Remedies: Any costs wasted due to lateness could be compensated by an award of costs, and any evidential prejudice could similarly be remedied.
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Audit Limitations: Even if the new grounds had been included in the POA, the Comptroller would not have been able to conduct audits or compel document production at this stage.
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Transitional Application: The Income Tax (Appeals Procedure for Board of Review) Regulations 2023 did not apply to this appeal (lodged August 2022), as those Regulations apply only to appeals lodged on or after 1 April 2025 .
Practical Implications
This decision offers several important practice points for accountants managing tax disputes:
1. Strategic Ground Formulation
The case highlights the risks of anchoring appeals to a single legal theory, particularly where jurisprudence is evolving. Taxpayers should consider formulating grounds with sufficient breadth to accommodate alternative arguments, especially where the underlying law is subject to judicial clarification.
2. Impact of Singapore Cement on Capital Allowance Claims
The Singapore Cement decision [2023] SGHC 57 represents a significant development in the plant versus building distinction . The High Court held that:
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An asset may be differentiated into constituent components for tax assessment purposes
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Section 19A does not preclude the Comptroller from classifying parts of an asset separately
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The divisibility of assets may be inferred from separate cost schedules and different maintenance contractors
The subsequent Changi Airport Group decision [2024] SGHC 281 reinforced that integrated assets may be differentiated, and the function of each component must be analysed separately . This has significant implications for capital allowance planning across industries.
3. Procedural Flexibility within Limits
The Board demonstrated willingness to permit ground amendments where prejudice can be compensated, but practitioners should note that consent is not automatic. The decision suggests the Board will consider:
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Stage of proceedings when new grounds are raised
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Reasons for delay
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Prejudice to the Comptroller
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Whether costs can adequately compensate
4. Transitional Provisions Awareness
With the 2023 Appeals Procedure Regulations now in force, practitioners must note Regulation 5(3) sets out specific prerequisites for introducing new grounds for appeals lodged on or after 1 April 2025. Early identification of potential arguments is now more critical than ever.
5. Documentary Evidence Considerations
The Board observed that even if new grounds had been included initially, the Comptroller could not have conducted audits or compelled documents at this stage. This suggests taxpayers should ensure comprehensive documentation is available early, as the opportunity to compel further evidence may be limited.
Looking Forward
This decision reinforces the importance of careful ground formulation at the POA stage while providing comfort that the Board retains discretion to permit amendments where justice requires. For capital allowance claims specifically, practitioners should approach integrated assets with the Singapore Cement analysis firmly in mind—consider whether assets are properly viewed as indivisible wholes or as collections of components requiring separate analysis .
Source: GIW v The Comptroller of Income Tax [2026] SGITBR 1, 26 February 2026