Ican 2026 Advanced Taxation Question 5

Specific sections of relevant tax statutes were amended by Finance Acts 2019, 2020, 2021, and 2023, in line with the macroeconomic policy reforms of the Federal Government and for efficient financial management of the Federation. CRD Hotels Limited commenced operations in 2010. It has six branches in each of Nigeria’s geo-political zones. In order to add beauty and glamour to their hotel premises, the management of the company in 2021, decided to acquire at a cost of N20,000,000, an array of Nigerian traditional and contemporary artefacts and artworks. In May 2023, all the artworks were disposed of at an all inclusive sales proceeds of N19,200,000, thereby making a capital loss of N800,000. Another set of artefacts and artworks was acquired at a cost of N12,200,000 in October of the same year. The management observed that these artworks did not attract significant customers as earlier envisaged, hence in August 2025, the company decided to approach a professional auctioneer to help sell all the artefacts and artworks. The company’s accountant presents the following financial details in respect of the disposal of the artefacts and artworks: