CIVIL APPEAL NO

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA ( CORAM: KEREFU. J.A.. FIKIRINI. J.A. AND MASOUP. J.A.^ CIVIL APPEAL NO. 49 OF 2022 KALTIRE MINING TIRE GROUP (TANZANIA) LIMITED........................................................ APPELLANT VERSUS COMMISSIONER GENERAL, TANZANIA REVENUE AUTHORITY (TRA)............................ RESPONDENT (Appeal from the Judgment and Decree of the Tax Revenue Appeals Tribunal at Dar es Salaam) (Haji, Chairperson) dated the 6th day of October, 2021 in Tax Appeal No. 91 of 2020 JUDGMENT OF THE COURT 11th & 21st February, 2025 MASOUP, J.A.: The appellant, a limited company incorporated in Tanzania, is in this appeal faulting the judgment and decree of the Tax Revenue Appeals Tribunal (the Tribunal) on two grounds of appeal. The grounds relate to failure by the Tribunal to evaluate and analyse the evidence on the record of the trial Tax Revenue Appeals Board (the Board) and as a result, holding that the evidence adduced cannot prove that the appellant was defrauded to warrant deduction of fraud loss under section 39 (a) of the Income Tax Act, 2004 (ITA). The impugned judgment of the Tribunal confirmed the decision of the Board and dismissed the appellant's appeal contesting the respondent's disallowance of the fraud losses, allegedly, suffered by the appellant for the years 2013 - 2015. It all started in 2017 when the respondent conducted a tax audit on the appellant's tax affairs for the years of income 2013 - 2015 to ascertain her tax compliance. The conclusion of the audit resulted into a number of queries on various types of taxes including corporate tax assessment disallowing fraud losses of TZS 1,807,150,091.00, allegedly, suffered by the appellant. Dissatisfied, the appellant filed a notice of objection, and as a result, correspondences were exchanged between the parties. Consequently, the respondent on 21st November, 2018 made its final decision on the objection disallowing the fraud losses because the appellant's submission was not supported by sufficient evidence. As the appellant was disgruntled by the objection decision, she lodged the appeal to the Board whose decision, at the end of the day, was not in her favour. In her further appeal, the Tribunal confirmed the Board's decision having considered the evidence on the record, in particular, exhibit A7. Since the appellant was still aggrieved, she preferred the instant appeal before this Court challenging the Tribunal's decision. As earlier stated, the appeal is founded on two grounds that relate to failure of the tribunal to evaluate and analyse the evidence on the record. In particulars, the grounds read thus: 1. The Tax Revenue Appeals Tribunals erred in law by misdirecting itself and failed to evaluate the evidence on record vigorously and hold that the evidence submitted by the appellant cannot be said to be proof that the appellant was defrauded by its employee and that the losses cannot be deducted under section 39 (a) o f the Income Tax Act, 2004. 2. The Tax Revenue Appeals Tribunal erred in law by failing to evaluate the evidence on record vigorously and hold that the evidence submitted by the appellant did not meet the standard of proof under the law to justify fraud loss hence deductible. The hearing of the appeal was with the presence of Mr. Wilson Kamugisha Mukebezi, learned advocate who teamed up with Mr. Norbert Mwaifani, learned advocate for the appellant on one hand, and Mr. Hospis Maswanyia, learned Principal State Attorney, assisted by Mr. Athuman Mruma, and Mr. Hance Mmbando, both learned State Attorneys for the respondent on the other hand. Both sides had earlier on lodged their written submissions in accordance with Rule 106 (1) and (7) of the Tanzania Court of Appeal Rules, 2009 whose contents were respectively adopted by each side before addressing us orally as they clarified on some aspects of their written submissions. It is instructive that the appellant's written submission on the record mirrored two issues that the learned counsel for the appellant framed in line with the two grounds of appeal. The issues were, firstly, whether the Tribunal sufficiently evaluated and analysed the evidence admitted by the Board in holding that the appellant has not sufficiently submitted evidence to prove fraud loss it has suffered; and secondly, whether the honorable Tribunal sufficiently evaluated and analysed the evidence admitted by the Board when it held that the evidence submitted by the appellant did not meet the standard of proof under the law to justify fraud loss, hence not deductible. At the outset, we noted from those issues as is on the grounds that the appellant's concern is on the insufficiency of the evaluation and analysis of the evidence that were conducted by the Tribunal and not on complete absence of the same. To us, the obvious question is what is it that is in the claim of insufficiency of evaluation and analysis of the evidence by the Tribunal? The submission by the appellant's learned counsel religiously addressed the two issues, referring us to pages 586 through 765, and pages 961 and 962 of the record of appeal, whilst also arguing in a nutshell that the Tribunal without sufficiently evaluating and analysing the evidence held that the appellant did not submit sufficient evidence to justify that she was defrauded by her employee. The submission brought to our attention exhibit A7 which, according to the appellant's counsel, was not sufficiently dealt with by the Tribunal because in the Tribunal's view there was no police report tendered in respect of the alleged fraud. Exhibit A7, it was stated, consisted of invoices, bank statements and cheques evidencing the alleged fraud. Inviting us to re-examine exhibit A7, the appellant's learned counsel urged us to pay a close attention to the reconciliation of the cheques that were diverted by the appellant's employee and which were meant by the appellant for payment of relevant taxes for the respective years. We were not only specifically referred to the cheques, namely, CIT Cheque 2013, CIT Cheque 2012, VAT Cheques 2013, VAT Cheques 2012, PAYE and SDL Cheques 2013, PAYE and SDL Cheques 2012, NSSF Cheques 2013, and NSSF Cheques 2012 for re-examination in the light of the finding of the Tribunal, but also referred to the corresponding amount of money in those cheques against the bunch of bank statements, allegedly, verifying the said amount as the same, according to the appellant, were not sufficiently evaluated by the Tribunal. In particular, we were urged by the appellant's counsel to add up the amounts of money appearing in those cheques and compare them with the figures in the bank statements which, according to the learned counsel for the appellant, correspond with TZS 1,852,556,970.00 suffered by the appellant as fraud losses. On whether or not the appeal raises a question of law, it was the submission of the appellant's learned counsel that the failure on the part of the Tribunal to sufficiently evaluate and analyse exhibit A7 in relation to the fraud losses suffered by the appellant is in itself a question of law squarely falling within the purview of section 25 (2) of the Tax Revenue Appeals Act (the TRAA). In fortification, we were referred to the cases of Atlas Copco Tanzania Limited v. Commissioner General, Tanzania Revenue Authority [2020] TZCA 317 (17 June 2020); and Unilever Tea Tanzania Limited v. Commissioner General, Tanzania Revenue Authority [2021] TZCA 623 (1 November 2021). Replying, the learned counsel for the respondent attacked the competence of the appeal, arguing that it raises matters of facts instead of questions of law contrary to section 25 (2) of the TRAA. The pitfall, it was argued, is apparent in the written submission by the appellant which answered the two issues by essentially evaluating the evidence without more and in so doing, inviting the Court to do so. In elaboration, it was contended that, whilst failure to evaluate evidence may appropriately raise a question of law, it was not the case in the present instance because there was no misapprehension or misdirection of the evidence amounting to a violation of a principle of law or procedure by the Tribunal which was shown by the appellant's counsel. It means therefore that contrary to the provisions of section 25 (2) of the TRAA, this Court, if it accepts the invitation to re-evaluate the evidence, will have to go through the evidence on the record, in particular exhibit A7 and analyse it in order to arrive at a conclusion on the two issues addressed by the appellant's counsel, it was argued. Reliance was in that regard made on Atlas Copco Tanzania Limited (supra). Without prejudice to the foregoing submission, it was argued in the alternative that, the Tribunal sufficiently evaluated and analysed the evidence. In fortification, we were in this respect referred to pages 957, 959 and 962 of the record of appeal. We have on our part examined the record before us in light of the grounds, issues framed and rival submissions of both sides. The issue is whether there was a failure by the Tribunal to sufficiently evaluate and analyse the evidence and whether the issue raises a question of law within the purview of section 25 (2) of the TRAA. Our reading of the impugned judgment of the Tribunal first took us to page 957 of the record of appeal where the Tribunal, after considering the rival submissions of the parties on the record, was of the view that the key issue in controversy was whether the appellant submitted sufficient proof for the fraud losses to qualify for deduction for tax purposes. In particular, the Tribunal insisted that for losses to be deducted for tax purposes under section 39 (a) of the ITA, there must be evidence to justify that a person claiming for such deduction suffered loss in business during the year of income. The Tribunal, after considering a number of authorities, was settled correctly so in our view, that allegations of fraud, which was at the heart of the claim by the appellant, must be strictly proved and that although the standard of proof may not be so heavy as to require proof beyond reasonable doubt; it is something more than a mere balance of probability applied in ordinary civil cases. Having appreciated the position of the law as to proof of fraud, the Tribunal went ahead to determine whether the allegation of fraud relied upon by the appellant was proved by her on the required standard. In its determination eventually, the Tribunal from page 961 to 962 reasoned and held in relation to exhibit A7 as follows: Our understanding of the above holding of the court is that proof of fraud is not merely a presentation o f simple information with regard to fraud loss. More and serious actions need to be proved to have been invoked by the appellant\ such as instigation of criminal actions or other actions to claim back the defrauded loss from the employee. In this regard, we indeed, entirely subscribe to the view taken by learned counsel for the respondent that, since there was neither a police report as a proof of criminal offence nor civil proceedings as a proof that really the appellant was defrauded by his employee, it is hard to believe if the appellant was truly defrauded as alleged. However, the appellant submitted the proceedings of Commercial Case No. 129 o f 2014, which was later struck out. No further action was taken by the appellant to claim back the alleged fraudulent loss from his employee. It is our stand that, if the appellant's claim is genuine, why he did not take any initiative to demand his right. After the said commercial case was struck out, the appellant did not take appropriate action to re-institute proper proceedings against the employee to claim back the alleged loss. Therefore, it is our considered view that, the exhibit A7 which consisted o f invoices, bank statements and cheques, and copy of the Commercial Case No. 129 of 2014 which was struck out, collectively cannot in any weight justify the allegation of the appellant to the required standard..... Based on the foregoing premises, we are in agreement with the respondent's argument that the evidence submitted by the appellant cannot be said to be a proof that the appellant was defrauded by its employee and that the losses cannot be deducted as a loss from chargeable income under section 39(a) of the Income Tax A c t 2004. Therefore, we see not justifiable reasons to fault the decision of the trial Board..., It is evident from the foregoing that the conclusion arrived at was a result of evaluation and consideration of the evidence by the Tribunal which in our considered view was quite sufficient. Clearly, exhibit A7 consisting of invoices, bank statements and cheques and the record of the Commercial Case launched in vain against the employee who allegedly defrauded the appellant were all at the heart of the finding of the Tribunal confirming the Board's decision that the evidence led by the appellant was not sufficient to establish that the appellant was defrauded by her employee and as a result she suffered fraud losses which has to be allowed for tax deduction purposes. It is also clear to us that the finding was hinged on the standard of proof required in allegation of fraud which is on a higher degree of probability than that which is required in ordinary civil cases. Other than depicting a general complaint on the failure of the Tribunal to sufficiently evaluate and analyse the evidence, we were clearly in this appeal not shown by the appellant or find on the record before us any misapprehension or misdirection in the evaluation of the evidence amounting to a violation of a principle of law or procedure. In our considered view, the appellant is in this appeal simply inviting us to re-consider and re-examine the evidence in order to arrive at a different conclusion that will allow the alleged fraud losses to be deducted. As we were not shown any misapprehension or misdirection in the evaluation of the evidence on the record of appeal before us in relation to which a relevant principle of law or procedure was violated, we cannot accept the invitation as we are mindful of the express provisions of section 25 (2) of the TRAA. Accepting the invitation will amount to reopening the factual issues in support of the appeal. See for instance, Insignia Limited v. Commissioner General, Tanzania Revenue Authority, Civil Appeal No. 14 of 2007 (unreported); and Singita Trading Store (EA) Limited v. Commissioner General, Tanzania Revenue Authority [2021] TZCA 179 (6 May 2021). When all is said and done, we are satisfied and find that the grounds of appeal canvassed by the appellant do not raise a question of law which the Court has jurisdiction to entertain in terms of section 25 (2) of the TRAA. We are in this respect persuaded that the grounds of appeal raised and the submissions made therefor concern factual issues which are a subject of the concurrent findings by the Board and Tribunal. For the above reasons, we uphold the decision of the tribunal and dismiss the appeal with costs. It is so ordered. DATED at DODOMA this 19th day of February, 2025. R. J. KEREFU JUSTICE OF APPEAL P. S. FIKIRINI JUSTICE OF APPEAL B. S. MSOUD JUSTICE OF APPEAL The Judgment delivered this 21st day of February, 2025, in the presence of Ms. Suleina Salim, learned counsel for the Appellant linked via Video Conference from Dar es salaam and Mr. Yohana Ndila, learned State Attorney for the Respondent, is hereby certified as a true copy of the original.