Background

The tax authority estimated the net profits of the two defendants' business. The defendants objected to the estimates and the case was referred to the commission of tax appeal. The commission decided that the defendants should enjoy exemptions stipulated by Article 21 of Egypt Law No. 59/1979 and that the estimates should be decreased.

The tax authority appealed the decision made by the commission of tax appeal before the court of first instance.

The court upheld the exemption decision and ruled that the net profits for 1982 should be estimated at 4198 Egyptian Pounds.

The tax authority appealed the ruling before the court of appeal. The court upheld the appealed ruling.

Decision

The tax authority appealed the ruling before the court of cassation and said in its grounds of appeal that the ruling had erred in the application of law and that the court had established its ruling based on the incorrect concept of the exemption stipulated by Article 21 of Egypt Law No. 59/1979.