Bright Vision $da$.$ Bhd$.($BVSB$)$ is a controlled company situated in Perak. It is a profitable trading

business, with minimal tangible assets and no investments. On $1$ July $2020,$ BVSB acquired its

first real property a $100-$acre of plantation. Thereafter, BVSB continued to operate the

plantation but has incurred losses every year since the land acquisition.

On $1$ December $2021,$ BVSB acquired a further $20$ acres of land from the neighboring plantation

to gain accessibility to the main road. This rendered the entire $120$ acres suitable for property

development, but BVSB continued to operate the $120$ acre plantation.

Last week, BVSB received a very attractive offer for the entire $120$ acres from an unrelated

party to purchase the land. The sale is expected to occur on $1$ July $2023.$

Yesterday, BVSB received a letter from the Director General on the Inland Revenue Board

$($DGIR$)$ stating its intention to invoke the general anti$-$avoidance provisions in the ITA $1967$ and

its refusal to allow the losses from the plantation business to be offset against the profits of

BVSB$\text{'}$s trading business.

Required:

$($a$)$ Determine whether $BVSB$ is a real property company on each of the following dates:

Before $1$ July $2020$

On $1$ July $2020$

On $1$ December $2021$

On $1$ July $2023$

Students are required to show the workings.

$(8$ marks$)$

$($b$)$ In respect of the proposed disposal of land on $1$ July $2023,$ set out arguments for the

gains to be subject to:

$(1)$ Real property gains tox

$(2)$ Income tax