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Taxation Mr Quah, an employee of a textile company and Mr Khoo, a banker made...

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Accounting

Taxation Mr Quah, an employee of a textile company and Mr Khoo, a banker made some profits on the purchase and sale of 7 units of cotton spinning plant. This was the only occasion that Mr Quah and Mr Khoo undertook a transaction of such nature. The units of cotton spinning plant were sold to different purchasers. Expenses such as commission, advertising, repairs, insurance, traveling and entertainment were incurred to facilitate the sale.

Required: Justify whether the profits arising from the above transactions are liable to income tax.

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