https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/142

L.A.B. International Kenya Limited v Commissioner of Domestic Taxes (Tribunal Case E930 of 2025) [2026] KETAT 142 (KLR) (26 June 2026) (Ruling) Neutral citation: [2026] KETAT 142 (KLR) Republic of Kenya In the Tax Appeal Tribunal Tribunal Case E930 of 2025 RM Mutuma, Chair, G Ogaga, T Vikiru & JM Malla, Members June 26, 2026 Between L.A.B. International Kenya Limited Applicant and Commissioner of Domestic Taxes Respondent Ruling 1.The Applicant filed a Notice of Motion dated 27th April 2026 and filed on 28th April 2026 seeking the following Orders: -a.Spent.b.That the Appellant be granted leave to file and rely on the Transfer Pricing Policy dated June 2013.c.That the costs of this Application be in the cause. 2.The Application which is supported by an Affidavit sworn by Naomi Musau, the Applicant’s advocate on 27th April 2026 and filed on 28th April 2026, is premised on the following grounds: -a.That the Transfer Pricing Policy for the year 2019 was previously provided to the Respondent during the compliance audit and objection period.b.That the Respondent is cognizant of the existence and contents of the Appellant’s 2013 Transfer Pricing Policy and has relied on the said document in its Assessment dated 13th March 2025, in its Objection decision dated 26th June 2025 and in its Statement of Facts dated 26th September 2025 filed before this Honourable Tribunal.c.That the said document was inadvertently omitted from the Appellant’s List and Bundle of documents filed before the Tribunal.d.That the document, as read together with the 2019 Transfer Pricing Compliance Review Report, is central to the issues in dispute before the Tribunal, being an Appeal against the Respondent’s Objection decision dated 26th June 2025 relating to the Appellant’s Transfer Pricing for the year 2019.e.That the Application does not introduce evidence which has not been reviewed or considered by the Respondent but seeks to formally place on record a document already within the knowledge and possession of both parties.f.That it is necessary for the Transfer Pricing Policy to be placed before this Honourable Tribunal to ensure that the Tribunal has full visibility of the document for a proper appreciation of the issues in dispute to aid a just determination of the matter, considering that both parties are relying on the document to justify their respective positions.g.That no prejudice will be occasioned to the Respondent, who has already relied on the document in their Assessment, Objection decision and Statement of Facts.h.That it is in the interest of justice and fairness that the Application be allowed. Appellant/applicant’s Submissions 3.The Appellant filed on even date its submissions in support of its Application dated 15th May 2026 submitting as follows:a.That the sole issue for determination is: Whether this Honourable Tribunal should grant the Appellant leave to file and rely on the Transfer Pricing Policy dated June 2013. a) The Tribunal has Jurisdiction and Discretion to Admit The Document.b.The Appellant/Applicant submitted that the Tribunal is clothed with jurisdiction and discretion to permit parties to file additional documents where necessary for the just determination of the dispute before it.c.The Appellant referred to Section 13(2)(d) of the Tax Appeals Tribunal Act that requires the Appellant to submit, as part of its appeal documents, and among other documents: “Such other documents as may be necessary to enable the Tribunal to make a decision on the appeal.”d.That in addition, Section 13(6) of the Tax Appeals Tribunal Act provides as follows: “The appellant shall, unless the Tribunal orders otherwise, be limited to the grounds stated in the appeal or documents to which the decision relates.”e.The Appellant/Applicant argued that the phrase “unless the Tribunal orders otherwise” expressly preserves the Tribunal’s discretion to admit documents where the interests of justice so require.f.The Appellant/Applicant submitted that its Transfer Pricing Policy dated June 2013 is directly relevant to the transfer pricing dispute before the Tribunal and is necessary for the complete and effectual determination of the Appeal.g.That it is the document which the Respondent used to raise its Assessment, to render its Objection decision and in its Statement of Facts before this Honourable Tribunal. That it is therefore a document to which the decision relates.h.The Appellant/Applicant submitted that the omission of the Transfer Pricing Policy from the Appeal Bundle of Documents was inadvertent and was only noted by the Appellant during pre-trial directions before the Tribunal. That upon discovery of the omission, the Appellant promptly filed the present Application under a certificate of urgency. It submitted that the foregoing constitutes reasonable cause warranting the exercise of the Tribunal’s discretion under Section 13 of the Tax Appeals Tribunal Act.i.The Appellant further submitted that the Tribunal’s discretion under Section 13 of the Tax Appeals Tribunal Act, should also be exercised with consideration to Article 50 of the Constitution which guarantees every party the right to a fair hearing and Article 159(2)(d) which obligates courts and tribunals to administer justice without undue regard to procedural technicalities.j.That this position is in line with the Tribunal’s own ruling in Alliance Tobacco Limited v Commissioner of Legal Services & Border Control (Tax Appeal 42 of 2023) [2024] KETAT 495 (KLR) where the Tribunal held as follows: -“9.Parties before the Tribunal ought to be permitted opportunities to present and ventilate their appeals in a manner that affords a fair and just determination of the dispute, including allowing parties amend pleadings and to file such documents that the parties consider necessary in ensuring just, efficient and effective determination of the matter by the Tribunal.”k.That the Appellant/Applicant therefore submits that the present Application falls squarely within the Tribunal’s statutory and constitutional jurisdiction and discretion and prays that the Tribunal exercises that discretion by allowing the prayers sought. b) The Transfer Pricing Policy is Directly Relevant and Central to the Dispute.l.The Appellant/Applicant stated that the present Appeal concerns the Respondent’s transfer pricing adjustments for the year 2019. It further averred that the Transfer Pricing Policy dated June 2013 forms part of the Appellant’s transfer pricing framework which was subject to annual compliance reviews by Deloitte. That being a Transfer Pricing Appeal, the Transfer Pricing Policy, which was prepared by Deloitte, is applicable during the 2019 year of Assessment and is therefore directly relevant to the issues in dispute before the Tribunal.m.That more significantly, the Transfer Pricing Policy was the basis of the Respondent’s Assessment, Objection Decision and Statement of Facts as is clearly demonstrated in those documents where the Respondent expressly relied upon, analysed and referenced the Transfer Pricing Policy.n.That in the Assessment dated 13th March 2025, the Respondent expressly stated as follows: “Reference is made to your Transfer Pricing Policy and the books of the company reviewed.”o.That in the said Assessment, the Respondent analysed specific provisions of the Transfer Pricing Policy and expressly relied on the same in making findings regarding:i.the characterization of the Appellant;ii.the functions, assets, and risks analysis;iii.the transfer pricing methodology adopted by the Appellant;iv.the Berry Ratio Profit Level Indicator; andv.the allocation of market risk, trading risk, inventory risk, and product liability risk.p.That throughout the Assessment, the Respondent repeatedly referred to specific provisions and pages of the Transfer Pricing Policy including:i.page 4 of the 2013 Transfer Pricing Policy referenced at paragraphs (f) and (g) of page 4 of the Assessmentii.page 9 of the 2013 Transfer Pricing Policy referenced at paragraphs (i) and (k) page 4 of the Assessmentiii.page 13 of the 2013 Transfer Pricing Policy referenced at paragraph (j) of page 4 of the Assessmentiv.page 14 of the 2013 Transfer Pricing Policy referenced at paragraph (n) of page 5 of the Assessmentv.page 18 - 19 of the 2013 Transfer Pricing Policy referenced at line 2 of page 6 of the Assessmentvi.page 22 – 23 of the 2013 Transfer Pricing Policy referenced under the Benchmarking Study Analysis at paragraph 1.1.3.1 at pages 6 and 7 of the Assessmentq.That similarly, in the Objection decision dated 27 June 2025, the Respondent again extensively analysed and critiqued the Transfer Pricing Policy. At paragraph 102 of the Objection decision, the Respondent expressly stated: “The Commissioner’s assessment identifies key gaps in your Transfer Pricing Policy.”r.That further, at paragraph 106 of the Objection decision, the Respondent stated: “Based on the foregoing, your transfer pricing policy document, as well as the benchmarking and functional analysis lacked the objectivity and supporting documentation necessary to uphold the allocation of income at arm’s length.”s.That at paragraph 148 of the Objection decision, in its Statement of Findings, the Respondent states as follows: “148. Although in the Transfer Pricing Policy Document, LAB Kenya correctly benchmarked itself against wholesalers of tea, NACE Rev. 2 all coded: 4637- Wholesale of coffee, tea, cocoa, and spices, it misapplied the PLI by using the Berry Ratio…”. That this reference can be seen in the Transfer Pricing Policy under Section 7.3 page 24 of the Policy number 9 in the Table.t.That the Respondent further referenced and analysed the Appellant’s Transfer Pricing Policy throughout the Objection Decision in relation to:i.benchmarking;ii.functional analysis;iii.allocation of functions;iv.allocation of risks;v.the tested party analysis;vi.the Berry Ratio; andvii.the selection of TNMM as the most appropriate method.u.That additionally, in its Statement of Facts before this Honourable Tribunal, the Respondent expressly pleaded that: “Upon reviewing and analysing the company’s transactions with its related entity, as well as its Transfer Pricing Policy (TP Policy), the Commissioner noted that LAB Kenya had wrongly characterised itself...”v.That the Respondent further repeatedly referred to the Transfer Pricing Policy throughout its Statement of Facts, including paragraphs 20, 46, 49 and 55 thereof as follows:i.“20. The Respondent avers that for the year 2019, the Appellant bought goods worth Kshs 11,941,163,814 from LAB UK. According to the Transfer Pricing Policy (TPP), the Appellant earned 2% of the selling price of teas sold to unrelated parties (sourced from LAB UK).”ii.“46. The policy provides that this risk is associated with the potential loss of demand for the product supplied by the company due to various factors including increased competitor activity within the market concerned or a change in demand from consumers. The policy provides that such changes in the market will affect all those involved and both LAB UK and the Appellant are exposed to this risk.”iii.49. Trading risk – The Appellant’s TP Policy provides that this risk is associated with fluctuation in prices as commodity prices tend to be volatile and therefore the trading risk is significant. It provides that the Appellant always matches purchases and sales and never holds any stocks as it only buys from LAB UK at the point where the teas are being delivered to third-party customers. The policy states that all teas are owned by LAB UK up to the point of delivery to the third-party customers and therefore LAB UK effectively takes the entire trading risk…”iv.“55. That according to the TPP, the company selected the Transactional Net Margin Method (TNMM) (Berry Ratio) as the most appropriate TP method to determine the arm's length nature of the prices for purchases made from related parties.”w.That as demonstrated above, the Transfer Pricing Policy forms part of the factual and analytical foundation upon which the Respondent’s Assessment and Objection Decision were made. Its analysis has also formed part of the Respondent’s defence in the present appeal before the Tribunal.x.That the Transfer Pricing Policy is therefore central to the issues falling for determination before this Honourable Tribunal. It is therefore disingenuous and insincere for the Respondent to allege that it would be prejudiced by introduction of this document that it has extensively relied on and made reference to including in its pleadings before this Honourable Tribunal.y.The Appellant/Applicant submitted that the Tribunal has the powers to exercise its discretion to permit the document to be produced to ensure just, efficient, and effective determination of the matter by the Tribunal. c) The Transfer Pricing Policy is not “New Evidence”.z.That despite the Respondent’s extensive reliance on the Transfer Pricing Policy as demonstrated at paragraphs 19 to 32 above, the Respondent now contends that the Transfer Pricing Policy constitutes “new evidence” and invites this Tribunal to decline exercising its discretion to admit the policy. This position is factually incorrect and legally untenable.aa.The Appellant/Applicant further submitted that the Respondent cannot be permitted to simultaneously:i.rely on the Transfer Pricing Policy to make findings against the Appellant;ii.critique and analyse the contents of the Policy in detail; andiii.at the same time, oppose the placement of the same document on record on the basis that it constitutes “new evidence”.bb.That as demonstrated in the foregoing submission, the present Application does not seek to introduce evidence previously unknown to the Respondent but merely seeks to formally place before the Tribunal a document already within the Respondent’s possession, knowledge, and reliance.cc.That in fact, the Tribunal, in considering whether to exercise its discretion in allowing an application to adduce additional evidence noted that the fact that documents had been provided to the Respondent constituted an important consideration. This was in the case of Riana Properties Company Limited v Commissioner, Legal Services & Board Coordination (Tax Appeal E316 of 2025) [2025] KETAT 353 (KLR), where the Tribunal stated as follows:“25.The Appellant having admitted that the documents it seeks to file were not availed to the Respondent, then, those documents were not considered at the point of the making of the Objection Decision. It would have been a different case if the Appellant had adduced the documents before the Respondent but failed to include them in the Appeal.”dd.That the present matter is precisely the “different case” contemplated by the Tribunal in Riana Properties because, as demonstrated above, the Transfer Pricing Policy was availed to, reviewed, analysed and relied upon by the Respondent in making the Assessment and Objection decision and in its Statement of Facts in Response to the present Appeal.ee.The Appellant/Applicant submitted that the Respondent’s present contention that the Transfer Pricing Policy was never availed to it is wholly irreconcilable with the Respondent’s own Assessment, Objection decision and Statement of Facts, all of which extensively analyse, reference, and rely upon the said document.ff.Despite the fact that the issue has been expressly brought to the Respondent’s attention in the present Application and supporting affidavit, the Respondent nevertheless persists, in its response, in advancing a position that is directly contradicted by its own record.gg.That in the circumstances, and in light of the Respondent’s extensive reliance on the Transfer Pricing Policy, the Appellant submits that it is in the interests of justice that this Honourable Tribunal allows the prayers sought and considers the Transfer Pricing Policy in determining the substantive dispute before it. d) The Appellant has Satisfied the Threshold for Admission Of Additional Documents.hh.The Appellant/Applicant submitted that the principles governing the admission of additional evidence were set out by the Supreme Court in Mohamed Abdi Mahamud v Ahmed Abdullahi Mohamed & 3 Others [2018] eKLR where the Court stated as follows: -“79.We therefore lay down the governing principles on allowing additional evidence in appellate courts in Kenya as follows:(a)the additional evidence must be directly relevant to the matter before the court and be in the interest of justice;(b)it must be such that, if given, it would influence or impact upon the result of the verdict, although it need not be decisive;(c)it is shown that it could not have been obtained with reasonable diligence for use at the trial, was not within the knowledge of, or could not have been produced at the time of the suit or petition by the party seeking to adduce the additional evidence;(d)Where the additional evidence sought to be adduced removes any vagueness or doubt over the case and has a direct bearing on the main issue in the suit;(e)the evidence must be credible in the sense that it is capable of belief;(f)the additional evidence must not be so voluminous making it difficult or impossible for the other party to respond effectively;(g)whether a party would reasonably have been aware of and procured the further evidence in the course of trial is an essential consideration to ensure fairness and due process;(h)where the additional evidence discloses a strong prima facie case of wilful deception of the Court;(i)The Court must be satisfied that the additional evidence is not utilized for the purpose of removing lacunae and filling gaps in evidence. The Court must find the further evidence needful.(j)A party who has been unsuccessful at the trial must not seek to adduce additional evidence to, make a fresh case in appeal, fill up omissions, or patch up the weak points in his/her case.(k)The court will consider the proportionality and prejudice of allowing the additional evidence. This requires the court to assess the balance between the significance of the additional evidence, on the one hand, and the need for the swift conduct of litigation together with any prejudice that might arise from the additional evidence on the other.”ii.That the Court of Appeal has held that the guidelines by the Supreme Court in the Mohamed Abdi case are not conjunctive and that an applicant only needs to substantially comply with the guidelines. That in Attorney General v Torino Enterprises Limited [2019] eKLR, the Court of Appeal stated as follows: -“In this matter, we have considered the items of additional evidence sought to be adduced by the applicant and evaluated each of them against the guidelines and criteria laid down by the Supreme Court in Mohamed Abdi Mahamud vs. Ahmed Abdullahi Mohamad & 3 others [2018] eKLR. We observe that the guidelines given by the Supreme Court are not necessarily conjunctive, but an applicant must substantially comply with the guidelines. Whether the additional evidence will impact the result of the case is a matter to be determined on merit upon evaluation of the additional evidence with all other evidence on record.”jj.The Appellant submitted that it has complied with the applicable guidelines for the Tribunal to exercise its discretion to permit production of the Transfer Pricing Policy as demonstrated below:i.The Transfer Pricing Policy sought to be introduced is credible, directly relevant to the Appeal and will have a bearing on the Tribunal’s determination of the substantive dispute (paragraphs 79(a), (b), (d) and (e) of the Supreme Court Mohamed Mahamud Case)a.That the main issue for determination in this appeal is the correctness of the Appellant’s Transfer Pricing Policy and its application to the controlled transactions between the Appellant and its related party, L.A.B International (UK) Limited, during the 2019 year of income.b.That as demonstrated at paragraphs 19 to 32 above, the Transfer Pricing Policy forms part of the factual and analytical foundation upon which the Respondent’s Assessment and Objection Decision were made and therefore has a direct bearing on the issues falling for determination before the Tribunal.c.That furthermore, the Transfer Pricing Policy is necessary for the Tribunal to make a determination on the substantive issues in dispute as the Respondent itself relied on and analysed the document in arriving at its findings against the Appellant.d.The Appellant further submitted that the Transfer Pricing Policy illuminates the Appellant’s transfer pricing framework, methodology, functional analysis, and allocation of risks, all of which are central issues for determination in the present Appeal before the Tribunal.e.That in addition to the foregoing, the Respondent has referenced the Transfer Pricing Policy in its own Statement of Facts filed in response to the Appeal before this Honourable Tribunal and its authenticity has never been disputed by the Respondent.f.That in the circumstances, the Appellant submits that it is in the interests of justice that the Tribunal has the full benefit of the relevant facts and information to assist in the complete resolution of the contested issues.g.That this would be in line with the Tribunal’s own pronouncement in Alliance Tobacco Limited v Commissioner of Legal Services & Border Control (Tax Appeal 42 of 2023) [2024] KETAT 495 (KLR) where the Tribunal held as follows:“9.Parties before the Tribunal ought to be permitted opportunities to present and ventilate their appeals in a manner that affords a fair and just determination of the dispute, including allowing parties amend pleadings and to file such documents that the parties consider necessary in ensuring just, efficient and effective determination of the matter by the Tribunal.”ii.The Application is not intended to fill gaps, patch weak points or make a fresh case on appeal (meeting the Supreme Court guidelines under paragraphs 79(i) and (j) of the Mohamed Mahamud Case)a.That contrary to the Respondent’s assertions at paragraphs 24 – 26 of its submissions, the present Application is not an attempt to fill gaps, patch weak points or make a fresh case on appeal.b.That as demonstrated at paragraphs 34 to 41 above, the Transfer Pricing Policy was already before and relied upon by the Respondent prior to the institution of the Appeal and the present Application merely seeks to formally place the document on record for the Tribunal to make an informed decision on the issues in dispute.c.That furthermore, the Appellant’s grounds of appeal remain unchanged and the nature of the dispute before the Tribunal has not been altered in any manner whatsoever.iii.No prejudice will be occasioned to the Respondent (paragraphs 79(f) and (k) of the Supreme Court Mohamed Mahamud Case)a.The Appellant submitted that the Respondent cannot be permitted to legitimately claim surprise, ambush, or prejudice in relation to a document which it extensively reviewed, analysed, and relied upon in making the impugned decision.b.That the admission of the Transfer Pricing Policy will also not occasion any delay in the determination of the Appeal particularly because the document already forms the basis of the Respondent’s own analysis and findings.iv.The additional evidence is not voluminous (paragraph 79(f) of the Supreme Court Mohamed Mahamud Case)a.The Appellant submits that the Transfer Pricing Policy sought to be introduced is not voluminous as it is a 47-page document which was already reviewed and analysed by the Respondent during the audit, objection review, and appeal processes.v.The Application was brought without undue delay and in good faith (paragraphs 79(g) and (k) of the Supreme Court Mohamed Mahamud Case)a.That the present Application was brought promptly upon the omission of the Transfer Pricing Policy from the record being noted by the Appellant during pre-trial directions before the Tribunal.b.That upon discovery of the omission, the Appellant promptly moved the Tribunal by way of the present Application filed under certificate of urgency and immediately brought the matter to the attention of the Tribunal.c.The Appellant therefore submitted that it cannot properly be accused of indolence, laches, or unreasonable delay.d.That further, the Tribunal is the court of first instance in the present dispute, and the substantive hearing of the Appeal has not yet commenced.e.That indeed, the Respondent has not yet filed its witness statement and retains the right to respond to the Transfer Pricing Policy through a further Statement of Facts or witness statement should it deem necessary.f.That in the circumstances, the Respondent will suffer no procedural prejudice whatsoever by admission of the Transfer Pricing Policy at this stage of the proceedings.g.The Appellant therefore submitted that the present Application has been made timeously and in good faith and that it has substantially satisfied the threshold for admission of the Transfer Pricing Policy.h.Accordingly, the Appellant prayed that this Honourable Tribunal be pleased to allow the present Application. e) It is in the interests of justice that the Application be allowed (paragraph 79(a) of the Supreme Court Mohamed Mahamud Case)kk.The Appellant submitted that the present Application has been made in good faith and in the interests of ensuring that the Tribunal has the full benefit of all relevant material necessary for the just and effectual determination of the Appeal.ll.That the Transfer Pricing Policy forms part of the Respondent’s own assessment, Objection Decision and Statement of Facts and its admission into the record will therefore not occasion prejudice or procedural unfairness to the Respondent.mm.The Appellant further submitted that the interests of substantive justice, fairness, and the constitutional right to a fair hearing under Article 50 of the Constitution favour admission of the Transfer Pricing Policy.nn.The Appellant therefore urged the Tribunal to exercise its discretion in favour of allowing the present Application. 4.The Respondent filed a Replying Affidavit of Jackline Mulinge dated 11th May 2026 and filed on the same date citing the following as the grounds of opposition to the Application:-a.That procedure is not there for no reason and parties ought to abide by it. That procedure is so closely intertwined with the substance of a case, that it befits not the attribute of mere technicality.b.That procedure is the handmaiden of justice and should be adhered to and not disregarded.c.That as an officer of the Respondent, it is evident that the documents intended to be adduced could easily be adduced during the objection by the Applicant before the Respondent made a decision on the matter in an attempt to settle the dispute.d.That the Appellant/Applicant has not indicated whether the documents it is purporting to introduce at this late stage were ever presented to the Respondent prior to issuance of the Objection decision.e.That Section 13(6) of the Tax Appeals Tribunal Act states that the Appellant/Applicant shall, unless the Tribunal orders otherwise, be limited to the grounds stated in the appeal or documents to which the decision relates.f.That it would be unreasonable and not in the interest of justice to allow additional documents which were not present nor availed when the Respondent made its decision on the extra taxes payable.g.That the Respondent adhered to all statutory timelines and performed its part of the obligations imposed by the Tax Procedures Act and it is only fair that the Appellant/ Applicant be made to do the same.h.That Courts and Tribunals cannot aid in the bending or circumventing of rules and shifting of goal posts for, while it may seem to aid one side, it unfairly harms the innocent party who strives to abide by the rules.i.That the additional documents would prejudice the Respondent’s case and efficiency as it would force the Respondent to review the said documents and make a decision based on the new evidence disregarding the earlier documents used.j.That litigation must come to an end and it is evident that the Appellant/Applicant at the slightest idea of defeat decided to entangle us all in a tedious cycle of litigation in the guise of seeking leave to adduce additional documents so as to prolong and delay the determination of the substantive suit by the Tribunal.k.That this is especially true considering that the Appellant/Applicant sought to file this Application after the Respondent had been given pre-trial directions for filing submissions and the Respondent had even complied with filing of its submissions.l.That to ensure the maxim equity aids the vigilant and not the indolent is breathed into life this application which would prejudice the Respondent ought not to be allowed but struck out to give ample time and efficiency in determining the substantive suit.m.That the Appellant/Applicant wants to use this application to delay the determination of the suit and essentially delay the collection of the tax in dispute.n.That the Application having failed to meet the threshold for granting leave to adduce additional documents lacks in merit and ought to be dismissed with costs to the Respondent. Respondent’s Submissions 5.The Respondent filed on 12th May 2026 its submissions dated 11th May 2026 in opposition of the Application. It considered its issue for determination to be: Whether the Appellant has met the threshold for grant of leave to file supplementary documents, and submitted as follows:a.The Respondent submitted that Appellant/Applicant has not met the threshold for grant of leave to file new documents at this stage and the application should be dismissed on that ground.b.That the Supreme Court in Mohammed Abdi Mohamud vs. Ahmed Abdulahi Mohamad & 3 Others [2018] eKLR laid down the following principles for allowing additional evidence:“79.…We therefore lay down the governing principles on allowing additional evidence in appellate courts in Kenya as follows:(a)the additional evidence must be directly relevant to the matter before the court and be in the interest of justice;(b)..(c)it is shown that it could not have been obtained with reasonable diligence for use at the trial, was not within the knowledge of, or could not have been produced at the time of the suit or petition by the party seeking to adduce the additional evidence;(d)…(e)…(f)…(g)whether a party would reasonably have been aware of and procured the further evidence in the course of trial is an essential consideration to ensure fairness and due process;(h)…(i)…(j)A party who has been unsuccessful at the trial must not seek to adduce additional evidence to, make a fresh case in appeal, fill up omissions or patch up the weak points in his/her case;(k)The court will consider the proportionally and prejudice of allowing the additional evidence. This requires the court to assess the balance between the significance of the additional evidence, on the one hand, and the need for the swift conduct of litigation together with any prejudice that might arise from the additional evidence on the other.”c.That the Court of Appeal in Safe Cargo Limited vs. Embakasi Properties Limited & 2 Others (2019) eKLR held as follows:“12.This Court in discussing its power to admit additional evidence under Rule 29 (1) stated as follows in Republic –v- Ali Babitu Kololo (2017) eKLR“It has been said time and again that the unfettered power of the Court to receive additional evidence should be used sparingly and only where it is shown that the evidence is fresh and would make a significant impact in the determination of the appeal.””d.The Respondent submitted that the Tribunal should consider the following issues among others to determine whether or not it will grant leave as sought by the Appellant;(a)whether there is additional new evidence;(b)if that evidence could have been obtained by the Applicant after reasonable diligence before and during hearing;(c)if there is a probability the additional evidence would have an important influence on the result of the case and finally,(d)based on the foregoing, is there sufficient reason to admit the additional evidence;(e)whether the Application was filed without unreasonable delay(f)proportionally and prejudice of allowing the additional evidence; a. Whether there is Additional New Evidence;e.The Respondent averred that transfer pricing policy 2013 was in custody of the Appellant at the point of lodging its Application for Review as well as during the Review process.f.That it follows therefore that the aforementioned documents were in custody of the Appellant and are therefore not additional new evidence. On that ground alone, the Application must fail. b. Whether that evidence could have been obtained by the Appellant/Applicant after reasonable diligence before and during hearingg.The Respondent submitted that as to whether the additional evidence herein could have been adduced before, we note that the same has been in custody of the Appellant/Applicant and the Appellant/Applicant therefore had every opportunity to adduce the same but failed to do.h.That as established herein above, all the documents sought to be filed are not new and were at all material time in custody of the Appellant.i.The Respondent submitted that the documents were in custody of the Appellant and it only required keenness and reasonable diligence to avail the same for consideration by the Respondent or the Tribunal and on that ground, the Application fails. c. If there is a probability the additional evidence would have an important influence on the result of the case and finally,j.The Respondent argued that the documents sought to be introduced by the Appellant/Applicant ought to have formed part of the documents submitted by the Appellant/Applicant for consideration by the Respondent during processing of the review application. That a detailed Application for review application together with all the supporting documents should be made before the Respondent for its consideration and not at this point of the Appeal.k.The Respondent submitted that inviting the Tribunal to consider documents not presented before and for consideration by the Respondent, would be inviting the Tribunal to usurp the mandate of the Respondent as granted under section 5 of the Kenya Revenue Authority Act which is not only unprocedural but also unlawful. On that ground, the Application fails.d.Is there a sufficient reason to admit the additional evidence;l.That the Court of Appeal in Attorney General v Torino Enterprises Limited [2019] eKLR in dealing with an application to introduce additional documents stated that: -“In Dorothy Nelima Wafula vs. Hellen Nekesa Nielsen & Paul Fredrick Nelson [2017] eKLR, it was expressed that under Rule 29 (1) (b), additional evidence will be introduced on appeal in the discretion of the Court, “for sufficient reason”. Though what constitutes ‘sufficient reason’ is not explained in the rule, through judicial practice the Court has developed guidelines to be satisfied before it can exercise its discretion in favour of a party seeking to present additional evidence on appeal. Before this Court can permit additional evidence under rule 29, it must be shown, one, that such evidence could not have been obtained by reasonable diligence before and during the hearing; two, the new evidence would probably have had an important influence on the result of the case if it was available at the time of the trial, and finally, that the evidence sought to be adduced is credible, though it need not be incontrovertible.”m.That from the reading of the Application, the Appellant/Applicant has not advanced any cogent reason why the documents were not availed for consideration by the Respondent.n.That in addition, the Appellant/Applicant has not demonstrated any difficulty it had in obtaining and/or submitting the supplementary documents before the Respondent.o.The Respondent submitted that there is no plausible reason why the Appellant failed to produce the documents before the Respondent. On that ground, the application fails.f.Proportionally and prejudice of allowing the additional evidence;p.That in Raila Odinga and 5 Others Versus I.E.B.C. and 3 Others [2013] eKLR, the Supreme Court “The other issue the Court must consider when exercising its discretion to allow a further affidavit, is the nature, context and extent of the new material intended to be produced and relied upon. That if it is small and limited so that the other Party is able to respond to it, than the Court ought to be considerate, taking into account all aspects of the matter. That however, if the evidence is such as to make it difficult or impossible for the other Party to respond effectively the Court must act with abundant caution and care. In the exercise of its discretion to grant leave for the filing of further affidavits and/or admission of addition evidence …”q.The Respondent submitted that the nature of the documents that the Appellant/Applicant seeks to introduce are documents that were in custody of the Appellant.r.That in Attorney General v Torino Enterprises Limited [2019] Eklr the Court of Appeal quoted with authority the case of Mzee Wanje and 93 Others Versus A.K. Saikwa (1982 – 88) 1 KAR 463 where the Court of Appeal, referring to Rule 29 of the Court of Appeal Rules held: -““This Rule is not intended to enable a party who has discovered fresh evidence to import it nor is it intended for a litigant who has been unsuccessful at the trial to patch up the weak points in his case and fill up omissions in the Court of Appeal. The Rule does not authorize the admission of additional evidence for the purpose of removing lacunae and filling in gaps in evidence. The appellate court must find the evidence needful. Additional evidence should not be admitted to enable a plaintiff to make out a fresh case in appeal. There would be no end to litigation if the Rule were used for the purpose of allowing parties to make out a fresh case or to improve their case by calling further evidence. It follows that the power given by the Rule should be exercised very sparingly and great caution should be exercised in admitting fresh evidence.”s.The Respondent asserted that the Appellant/Applicant failed to produce the documents before the Respondent and only want to introduce them at an advanced stage after discovering that they ought to have produced the same documents for consideration by the Respondent but failed to do so. That in essence the Appellant/Applicant is trying to bolster and fill in the gaps that were not filled before the Respondent by sneaking in the documents at a later stage.t.The Respondent submitted that this is a ploy by the Appellant/Applicant to introduce documents and litigate new issues at this advance stage when the same ought to have been determined by the Respondent.u.The Appellant/Applicant is therefore trying to circumvent a clearly laid down procedure of issuing tax decisions and challenging them and the Tribunal should not exercise its discretion in favor of such a party.v.The Respondent submitted that where there is a clearly laid down procedure to issue and challenge a decision, it is in the interest of justice to follow the laid down procedure and allow parties to follow that.w.That the Court in the case of Kenya Agricultural and Livestock Research Organization v Leah Okoko & another [2022] eKLR stated that: -“Having evaluated and considered each of the items of additional evidence sought by the Applicant against the detailed guidelines and criteria laid down by the Supreme Court in the Mohamed Abdi Mohamud supra case, and reiterating the holding by the Court of Appeal in the case of Attorney General v Torino Enterprises Limited [2019] eKLR, I observe that the clear guidelines issued by the Supreme Court directed at Appellate Courts are not conjunctive. However, an applicant must substantially comply with the guidelines.”x.The Respondent submitted that the Appellant/Applicant is required to meet substantially the laid down guidelines. As demonstrated hereinabove, the Appellant has not met any of the guidelines.y.It was the Respondent’s submission that the Appellant/Applicant has not met the threshold for grant of leave to file supplementary list of documents and the Application should be dismissed. That in the instant case, the Appellant/Applicant has not met the threshold of granting leave to file supplementary documents.z.The Respondent submitted that the Appellant/Applicant is an indolent and frivolous litigator and the Tribunal should not exercise its discretion in favour of such a party. Analysis and Findings 6.The Tribunal notes that the Notice of Motion is primarily for the Appellant/Applicant seeking leave to a file and rely on the Transfer Pricing Policy dated June 2013. 7.The Appellant/Applicant in the Notice of Motion Application seeks to file its 2013 Transfer Pricing (TP) Policy that were allegedly inadvertently omitted from its bundle of documents filed with the Tribunal. 8.The Applicant asserts that the Respondent is cognizant of the existence and contents of the Appellant’s 2013 TP Policy and has relied on the said document in its Assessment dated 13th March 2025, in its Objection decision dated 26th June 2025 and in its Statement of Facts dated 26th September 2025 filed before this Honourable Tribunal. 9.The Respondent, on its part, asserts that the Appellant/Applicant failed to produce the documents before the Respondent and only wants to introduce them at an advanced stage after discovering that they ought to have produced the same documents for consideration by the Respondent but failed to do so. 10.The Tribunal’s power in determining applications of this nature is anchored in Section 13(3) and (4) of the Tax Appeals Tribunal Act which provides thus: -“13.…(3)The Tribunal may, upon application in writing or through electronic means, extend the time for filing the notice of appeal and for submitting the documents referred to in subsection (2).(4)An extension under subsection (3) may be granted owing to absence from Kenya, or sickness, or other reasonable cause that may have prevented the applicant from filing the notice of appeal or submitting the documents within the specified period.” 11.The determination before the Tribunal is whether to allow the Appellant to file additional documents in support of its Appeal. Section 13(6) of the Tax Appeals Tribunal Act provides as follows with regard to the determination of an appeal on the basis of documentation filed before the Tribunal:-“(6)The appellant shall, unless the Tribunal orders otherwise, be limited to the grounds stated in the appeal or documents to which the decision relates.” 12.Consequently, in determining whether to allow additional or further documents, the Tribunal should be cognizant of whether the documents that the Applicant seeks to produce are limited to the decision against which it had lodged an appeal. 13.In this regard, the Tribunal is further guided by the case of Commissioner of Income Tax vs Total Kenya Limited [2021] eKLR, where it was held: -“In Tarmohamed & Another v. Lakhani & Company [1958] EA 567, the Court of Appeal for Eastern Africa adopted the decision in Ladd v. Marshall [1954] WLR 1489 and stated:“Except in cases where the application for additional evidence is based on fraud or surprise: to justify the reception of fresh evidence or a new trial, three conditions must be fulfilled: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible. "” 14.From the foregoing, it is clear that the power to admit additional evidence is discretionary. However, it should be exercised restrictively. That the evidence should be necessary and not meant to patch up an applicant’s case on appeal. Finally, the power should be exercised sparingly for the ends of justice. 15.In the present case, the Applicant has shown evidence that it had shared the 2013 TP Policy document with the Respondent at the assessment and objection stages of the tax dispute. The Respondent having already sighted the documents is a fact that the Respondent has not demolished or proved to be false. 16.From the documents adduced by the Appellant, the Tribunal notes that the Respondent makes specific reference to the 2013 TP Policy and the information contained therein in various sections of its notice of assessment dated 13th March 2025 and its Objection decision dated 26th June 2025, the impugned decision in the Appeal. From the Tribunal’s cursory perusal, the 2013 TP Policy appears to be constituent of the basis of the assessment that was confirmed in the impugned Objection decision. 17.It is the Tribunal’s considered view that failure to admit the 2013 TP Policy would prejudice the Appellant/Applicant if the Tribunal ends up making a decision without sighting or citing the document which appear to have been supplied to the Respondent. On the other hand, the Respondent would suffer no prejudice as it would have the chance to file supplementary pleadings and reflect on whether the documents have probative value. 18.The Supreme Court has also spoken to this issue in the Mohamed Abdi Mahmud-vs-Ahmed Abdullahi Mohamed & 3 Others [2018] eKLR when it expressed itself thus: -“79.We therefore lay down the governing principles on allowing additional evidence in appellate courts in Kenya as follows:(a)The additional evidence must be directly relevant to the matter before the court and be in the interest of justice.(b)It must be such that, if given, it would influence or impact upon the result of the verdict although it need not be decisive;(c)It is shown that it could not have been obtained with reasonable diligence for use at the trial, was not within the knowledge of, or could not have been produced at the time of the suit or petition by the party seeking to adduce the additional evidence.(d)Where the additional evidence sought to be adduced removes any vagueness or doubt over the case and has a direct bearing on the main issue in the suit;(e)The evidence must be credible in the sense that it is capable of belief.(f)The additional evidence must not be so voluminous as to make it difficult or impossible for the other party to respond effectively.(g)Whether a party would reasonably have been aware of and procured the further evidence in the course of the trial is an essential consideration to ensure fairness and due process.(h)Where the additional evidence discloses a strong prima fade case of willful deception of the Court;(i)The Court must be satisfied that the additional evidence is not utilised for the purpose of removing lacunae and filling gaps in evidence. The Court must find the further evidence needful.(j)A party who has been unsuccessful at the trial must not seek to adduce additional evidence to, make a fresh case in appeal, fill up omissions or patch up the weak points in his/her case.(k)The court will consider the proportionality and prejudice of allowing the additional evidence. This requires the court to assess the balance between the significance of the additional evidence, on the one hand, and the need for the swift conduct of litigation together with any prejudice that might arise from the additional evidence on the other.” 19.Based on the foregoing guidance by the Supreme Court, the Tribunal has interrogated whether the said documentary evidence seeking to be adduced is relevant to the case, and to this, the Tribunal is of the view that the 2013 TP Policy document which the Appellant/Applicant seeks to adduce before the Tribunal would be critical in assisting the Tribunal towards clarifying the facts of the dispute and in helping the Tribunal in arriving at a just and fair determination. 20.On whether it would impact or influence the result of the case if adduced, the Tribunal is of the view that the 2013 TP Policy appears to go to the crux of the Appellant’s argument against the tax assessment, therefore, the same are likely to have an influence on how the Tribunal is likely to reach its decision after the interrogation of such documents. 21.The Tribunal further finds that the 2013 TP Policy document is not overtly voluminous, therefore, it might not be difficult or impossible for the Respondent to respond effectively. It is also apparent from the notice of assessment and Objection decision that the Applicant shared the documents with the Respondent during the audit and objection proceedings. 22.The Tribunal has not been shown any evidence to suggest that the Appellant/Applicant’s intended document indicate a calculated willful deception of the Tribunal by the Appellant/Applicant, nor does it seem to be the case that the 2013 TP Policy document sought to be produced is calculated to be utilised for the purposes of removing lacunae and filling gaps in evidence. The 2013 TP Policy is relevant to the Appeal, and it is in the interest of justice and fairness to allow the same to be admitted in evidence. 23.The Respondent has also not demonstrated to the Tribunal what kind of grave prejudice it is likely to suffer should the 2013 TP Policy document the Applicant seeks to adduce be admitted by the Tribunal. 24.It is thus the view of the Tribunal that the tests prescribed in the Mohamed Abdi Mahmud case (supra) have been met to the extent that the additional evidence sought to be adduced will generally help the Tribunal to resolve the issue in dispute and make a fair determination on whether the Respondent’s tax assessment against the Appellant/Applicant was justified. 25.The balance of convenience therefore falls in favour of the Appellant/Applicant who has shown a prima facie case deserving of the orders sought thereto. 26.The Tribunal is, in the circumstances, inclined to exercise its discretion in favour of the Appellant/Applicant and allow a similar latitude in filing any additional documents to the Respondent for the purposes of balancing out the competing interests of the Parties in the Appeal. Disposition 27.Based on the foregoing, the Tribunal finds that the Application is meritorious and accordingly proceeds to issue the following Orders: -a.The Notice of Motion Application dated 27th April 2026 and filed on 28th April 2026 be and is hereby allowed.b.The Appellant be and is hereby granted leave to file its 2013 Transfer Pricing Policy.c.The 2013 Transfer Pricing Policy document be and is hereby deemed to have been duly filed and served to the Respondent.d.The Respondent be and is hereby granted a corresponding leave to file and serve a Supplementary Statement of Facts and additional documents (if necessary) within Fifteen (15) days of the date of the delivery of this Ruling.e.No order as to costs. 28.It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 26TH DAY OF JUNE 2026.……………………………ROBERT M. MUTUMACHAIRMAN……………………………… ……GLORIA A. OGAGAMEMBER……………………………DR. TIMOTHY B. VIKIRUMEMBER……………………………JIMMY M. MALLAMEMBER