Facts:

The appellant is a Federal Government agency responsible for collection of taxes imposed by and accruing to the Federal Government of Nigeria. The respondent is a company carrying on business in Nigeria. The respondent had invested in Federal Government bonds which are a long term money instrument and exempted, by the provisions of the Companies Income Tax Act, from taxes. However, the respondent sold the bonds before the maturity date and derived a profit from the sale. As a result of the sale and profits derived therefrom, the appellant raised the tax liabilities of the respondent to the sum of N728,788,304.91 (Seven Hundred and Twenty Eight Million, Seven Hundred and Eighty Eight Thousand, Three Hundred and Four Naira, Ninety One Kobo) representing the Companies Income Tax and Education Tax. The respondent was dissatisfied with the assessment and consequently applied to the Tax Appeals Tribunal to determine the propriety or otherwise of the appellant’s action. After hearing the parties, the Tribunal ruled in favour of the appellant and upheld its actions.
Further dissatisfied, the respondent filed an appeal to the Tax Appeal Tribunal which upheld the decision of the Tax Tribunal. The respondent was still not satisfied with the decisions of the two tribunals and filed a suit against the appellant at the Federal High Court, Lagos Division. After a full hearing, the court ruled in favour of the respondent on the ground that the bond was a long term instrument and profit therefrom is exempted from taxation. The appellant was aggrieved and filed a notice of appeal at the Court of Appeal, Lagos Division urging the court to set aside the decision of the trial court and uphold that of the Tribunals.
The sole issue for determination is whether the Federal Government Bond with tenor of three to twenty years acquired by the respondent was converted to short term instrument taxable under section (9) (1) (g) of CITA by reason of the fact that the respondent disposed of the bond before their maturity date.