Digests Tax I (2003)

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101 cases assigned under Atty. Villarubia (Arellano Law), Digests. (2003, individual documents; 2011 compilation)

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<p>DigestsTaxation Law IMichael Vernon Guerrero Mendiola 2003 Shared under Creative Commons AttributionNonCommercial-ShareAlike 3.0 Philippines license.</p> <p>Some Rights Reserved.</p> <p>Table of ContentsCommissioner vs. Algue, GR L-28890, 17 February 1988 ......... 1 Luzon Stevedoring Corp. vs. Court of Tax Appeals, GR L-30232, 29 July 1988 ......... 1 Lutz vs. Araneta, GR L-7859, 22 December 1955 ......... 2 McCollough vs. Maryland, 17 US 316 (1819) ......... 2 Panhandle Oil vs. State of Mississippi, 277 US 218 (1928) ......... 3 Commissioner vs. Lingayen Gulf Electric, GR L-23771, 4 August 1988 ......... 4 National Development Co. vs. Commissioner, GR L-53961, 30 June 1987 ......... 4 Domingo vs. Garlitos, GR L-18993, 29 June 1963 ......... 5 Commissioner vs. Itogon-Suyoc Mines, GR L-25299, 29 July 1969 ......... 5 Republic vs. Mambulao Lumber, GR L-17725, 28 February 1962 ......... 5 Francia vs. Intermediate Appellate Court, GR L-67649, 28 June 1988 ......... 6 Caltex Philippines vs. Commission on Audit (COA), GR 92585, 8 May 1992 ......... 7 Cu Unjieng vs. Patstone, GR 16254, 21 February 1922 ......... 7 Villegas vs, Hiu Chiong Tsai Pao Ho, GR L-29646, 10 November 1978 .........8 Apostolic Prefect of Mountain Province vs. City Treasurer of Baguio City, GR 47252, 18 April 1941 ......... 8 Philippine Airlines vs. Edu, HR L-41383, 15 August 1988 ......... 9 Progressive Development Corporation vs. Quezon City, GR 36081, 24 April 1989 ......... 9 American Mail Line vs. Basilan, GR L-12647, 31 May 1961 ......... 10 Saldana vs. Iloilo, GR L-10470, 26 June 1958 ......... 10 Compania General de Tobacos de Filipinas vs. Manila, GR L-16619, 29 June 1963 ......... 11 Philippine Acetylene Co. Inc. vs. Commissioner, GR L-19707, 17 August 1967 ......... 11 Commissioner vs. American Rubber, GR L-19667, 29 November 1966 ......... 12 Commissioner vs. Gotamco, GR L-31092, 27 February 1987 ......... 12 Pascual vs. Secretary of Public Works and Communications, GR L-10405, 29 December 1960 ......... 13 Republic vs. Bacolod-Murcia Milling Co., GR L-19824-26, 9 July 1999 ......... 13 31st Infantry Post Exchange vs. Posadas, GR 33403, 4 September 1930 ......... 14 Wells Fargo vs. Collector of Internal Revenue, GR 46720, 28 June 1940 ......... 15 Philippine Match Co. Ltd. vs. Cebu City, GR L-30745, 18 January 1978 ......... 15 Commissioner vs. British Overseas Airways Corp., GR L-65773-74, 30 April 1987 ......... 16 Commissioner vs. Air India, GR L-72443, 29 January 1988 ......... 16 Allied Thread vs. City of Manila, GR L-40296, 21 November 1984 ......... 17 Abra vs. Hernando, GR L-49336, 31 August 1981 ......... 17 Association of Custom Brokers vs. Manila, GR L-4376, 22 May 1953 ......... 18 Kapatiran ng mga Naglilingkod sa Pamahalaan vs. Tan, GR L-81311, 30 June 1988 ......... 18 Sison vs. Ancheta, GR L-59431, 25 July 1984 ......... 19 Juan Luna Subdivision vs. Sarmiento, GR L-3538, 28 May 1952 ......... 19 Shell Co. vs. Vano, GR L-6093, 24 February 1954......... 20 Victorias Milling Co. vs. Municipality of Victorias, GR L-21183, 27 September 1968 ......... 20 Punsalan vs. Manila, GR L-4817, 26 May 1954 ......... 21 Ormoc Sugar vs. Treasurer of Ormoc City, GR L-23794, 17 February 1968 ......... 21 Pepsi-Cola Bottling Co. vs. City of Butuan, GR L-22814, 28 August 1968 ......... 22 Vera vs. Cuevas, GR L-33693-94, 31 May 1979 ......... 22 American Bible Society vs. Manila, GR L-9637, 30 April 1957 ......... 23 Cagayan Electric Power &amp; Light Co. vs. Commissioner, GR L-60126, 25 September 1985 ......... 23 Casanovas vs. Hord, GR L-3473, 22 March 1907 ......... 24 Churchill vs. Concepcion, GR 11572, 22 September 1916 ......... 24 Villanueva vs. Iloilo City, GR L-26521, 28 December 1968 ......... 25 Eastern Theatrical Co. vs. Alfonso, GR L-1104, 31 May 1944 ......... 25 Reyes vs. Almanzor, GR 49839-46, 26 April 1991 ......... 26 Abra Valley College vs. Aquino, GR L-39086, 15 June 1988 ......... 26</p> <p>Herrera vs. Quezon City Board of Assessment Appeals, GR L-15270, 30 September 1961 ......... 27 Lladoc vs. Commissioner, GR L-19201, 16 June 1965 ......... 27 Bishop of Nueva Segovia vs. Provincial Board of Ilocos Norte, GR 27588, 31 December 1927 ......... 28 Commisioner vs. Bishop of Missionery District of the Philippine Islands, GR L-19445, 31 August 1965 ......... 28 Hodges vs. Iloilo City, GR L-18129, 31 January 1963......... 29 Procter and Gamble vs. Jagna, GR L-24265, 28 December 1979 ......... 29 Commissioner vs. Lednicky, GR L-18169, 31 July 1964 ......... 30 Commissioner vs. Javier, GR 78953, 31 July 1991 ......... 30 Meralco vs. Vera, GR L-29987, 22 October 1975 ......... 31 Commissioner vs. Manila Jockey Club, GR L-8755, 23 March 1956 ......... 31 SSS vs. Bacolod City, GR L-35726, 21 July 1982 ......... 32 Nitafan vs. Commissioner, GR L-78780, 23 July 1987 ......... 32 Commissioner vs. Robertson, GR L-70116-19, 12 August 1986 ......... 32 Reagan vs. Commissioner, GR L-26379, 27 December 1969 ......... 33 Davao Light and Power vs. Commissioner of Customs, GR L-28739 and L-28902 ......... 33 Surigao Consolidated Mining vs. Collector, GR L-14878, 26 December 1963 ......... 34 Wonder Mechanical Engineering vs. Court of Tax Appeals, GR L-22805 and L-27858, 30 June 1975 ......... 35 Visayas Cebu Terminal vs. Commissioner, GR L-19530 and L-19444, 27 February 1965 ......... 35 Lealda Electric vs. Commissioner, GR L-16428, 30 April 1963 ......... 36 Misamis Oriental vs. Cagayan Electric, GR 45355, 12 January 1990 ......... 36 Hilado vs. Collector, GR L-9408, 31 October 1956 ......... 37 Commissioner vs. Court of Tax Appeals, GR 44007, 20 March 1991 ......... 37 Maceda vs. Macaraig, GR 88291, 31 May 1991 ......... 38 Commissioner vs. Phoenix Assurance, GR L-19727, 20 May 1965 ......... 39 Commissioner vs. Connel Bros. Co., GR L-27752-53, 30 August 1971 ......... 39 Commissioner vs. Firemans Fund Insurance, GR L-30644, 9 March 1987 ......... 40 Commissioner vs. Cebu Portland Cement, GR L-29059, 15 December 1987 ......... 40 Republic vs. Vda. de Fernandez, GR L-9141, 25 September 1956 ......... 41 Tanada vs. Tuvera, GR L-63915, 24 April 1985 ......... 41 Bagatsing vs. Ramirez, GR L-41631, 17 December 1976 ......... 42 Commissioner vs. Burroughs Ltd., GR L-6653, 19 June 1986 ......... 42 Commissioner vs. Mega General Merchandise, GR L-69136, 30 September 1988 ......... 43 Commissioner vs. Court of Tax Appeals, GR 108358, 20 January 1995 ......... 43 Commissioner vs. Court of Appeals, GR 119761, 29 August 1996 ......... 44 ABS-CBN Broadcating vs. Court of Tax Appeals, GR L-52306, 12 October 1981 ......... 44 In RE Zialcita, AM 90-6-015-SC, 18 October 1990 ......... 45 Commissioner vs. Court of Appeals, GR 96016, 17 October 1991 ......... 45 Borromeo vs. Civil Service Commission, GR 96032, 31 July 1991 ......... 46 Esso Standard Eastern vs. Commissioner, GR 28508-9, 7 July 1989 ......... 46 Guagua Electric Light Plant Co. vs. Collector, GR L-23611, 24 April 1967 ......... 47 Republic vs. Limaco and De Guzman Commercial Co., GR L-13081, 31 August 1962 ......... 47 Interprovincial Autobus Co. vs. Collector of Internal Revenue, GR L-6741, 31 January 1956 ......... 48 Tan Guan vs. Court of Tax Appeals, GR L-23676, 27 April 1967 ......... 49 Dayrit vs. Cruz, GR L-39910, 26 September 1988 ......... 49 Collector vs. Benipayo, GR L-13656, 31 January 1962 ......... 50 Meralco Securities Corp. vs. Savellano, GR L-36181, 23 October 1982......... 50 Commissioner vs. Abad, GR L-19627, 27 June 1968 ......... 51 Commissioner vs. Procter &amp; Gamble Philippines, GR L-66838, 15 April 1988 ......... 51 City Lumber vs. Domingo, GR L-18611, 30 January 1964 ......... 52 Villamin vs. Court of Tax Appeals, GR L-11536, 31 October 1960 ......... 52 Sy Po vs. Court of Tax Appeals, GR L-81446, 18 August 1988 ......... 53</p> <p>This collection contains one hundred one (101) cases summarized in this format by Michael Vernon M. Guerrero (as a sophomore law student) during the First Semester, school year 2003-2004 in the Taxation Law I class under Atty. Diogenes Villarubia at the Arellano University School of Law (AUSL). Compiled as PDF, July 2011. Berne Guerrero entered AUSL in June 2002 and eventually graduated from AUSL in 2006. He passed the Philippine bar examinations immediately after (April 2007).</p> <p>www.berneguerrero.com</p> <p>Digests (Berne Guerrero)</p> <p>[1] Commissioner vs. Algue GRL-28890, 17 February 1988 First Division, Cruz (J); 4 concur Facts: The Philippine Sugar Estate Development Company (PSEDC) appointed Algue Inc. as its agent, authorizing it to sell its land, factories, and oil manufacturing process. The Vegetable Oil Investment Corporation (VOICP) purchased PSEDC properties. For the sale, Algue received a commission of P125,000 and it was from this commission that it paid Guevara, et. al. organizers of the VOICP, P75,000 in promotional fees. In 1965, Algue received an assessment from the Commissioner of Internal Revenue in the amount of P83,183.85 as delinquency income tax for years 1958 amd 1959. Algue filed a protest or request for reconsideration which was not acted upon by the Bureau of Internal Revenue (BIR). The counsel for Algue had to accept the warrant of distrant and levy. Algue, however, filed a petition for review with the Coourt of Tax Appeals. Issue: Whether the assessment was reasonable. Held: Taxes are the lifeblood of the government and so should be collected without unnecessary hindrance. Every person who is able to pay must contribute his share in the running of the government. The Government, for his part, is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that is an arbitrary method of exaction by those in the seat of power. Tax collection, however, should be made in accordance with law as any arbitrariness will negate the very reason for government itself. For all the awesome power of the tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate that the law has not been observed. Herein, the claimed deduction (pursuant to Section 30 [a] [1] of the Tax Code and Section 70 [1] of Revenue Regulation 2: as to compensation for personal services) had been legitimately by Algue Inc. It has further proven that the payment of fees was reasonable and necessary in light of the efforts exerted by the payees in inducing investors (in VOICP) to involve themselves in an experimental enterprise or a business requiring millions of pesos. The assessment was not reasonable. [2] Luzon Stevedoring Corp. vs. Court of Tax Appeals GR L-30232, 29 July 1988 Second Division, Paras (J): 4 concur Facts: Luzon Stevedoring Corp. imported various engine parts and other equipment for tugboat repair and maintenance in 1961 and 1962. It paid the assessed compensation tax under protest. Unable to secure a tax refund from the Commissioner (for the amount of P33,442.13), it filed a petition for review with the Court of Tax Appeals (CTA). The CTA denied the petition, as well as the motion for reconsideration filed thereafter. Issue: Whether the corporation is exempt from the compensation tax. Held: As the power of taxation is a high prerogative of sovereignty, the relinquishment of such is never presumed and any reduction or dimunition thereof with respect to its mode or its rate, must be strictlyTaxation Law I, 2004 ( 1 )</p> <p>Digests (Berne Guerrero)</p> <p>construed, and the same must be couched in dear and unmistakable terms in order that it may be applied. The corporations tugboats do not fall under the categories of passenger or cargo vessels to avail of the exemption from compensation tax in Section 190 of the Tax Code. It may be further noted that the amendment of Section 190 of Republic Act 3176 was intended to provide incentives and inducements to bolster the shipping industry and not the business of stevedoring, in which the corporation is engaged in. Luzon Stevedoring Corp. is not exempt from compensating tax under Section 190, and is thus not entitled to refund. [3] Lutz vs. Araneta GR L-7859, 22 December 1955 First Division, Reyes JBL (J): 8 concur Facts: AWalter Lutz, as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma, sought to recover the sum of P14,6666.40 paid by the estate as taxes from the Commissioner under Section e of Commonwealth Act 567 (the Sugar Adjustment Act), alleging that such tax is unconstitutional as it levied for the aid and support of the sugar industry exclusively, which is in his opinion not a public purpose. Issue: Whether the tax is valid in supporting an industry. Held: The tax is levied with a regulatory prupose, i.e. to provide means for the rehabilitation and stabilization of the threatened sugar industry. The act is primarily an exercise of police power, and is not a pure exercise of taxing power. As sugar production is one of the great industries of the Philippines; and that its promotion, protection and advancement redounds greatly to the general welfare, the legislature found that the general welfare demanded that the industry should be stabilized, and provided that the distribution of benefits therefrom be readjusted among its component to enable it to resist the added strain of the increase in tax that it had to sustain. Further, it cannot be said that the devotion of tax money to experimental stations to seek increase of efficiency in sugar production, utilization of by-products, etc., as well as to the improvement of living and working conditions in sugar mills and plantations, without any part of such money being channeled diectly to private persons, constitute expenditure of tax money for private purposes. The tax is valid. [4] McCollough vs. Maryland 17 US 316 (1819), Marshall (CJ) Facts: The United States Congress incorporated a bank, the Bank of the United States; and established a branch in the State of Maryland. The State of Maryland, in turn, through its legislature, imposed a tax upon the bank. Issue: Whether the State of Maryland can tax a federal bank. Held: The Government of the United States, though limited in its powers, is supreme. Its laws, when made in pursuance of the Constitution, form the supreme law of the land, anything in the Constitution or laws of any State, to the contrary, not withstanding. Among the enumerated powers of the government are to lay and collect taxes; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies. Still, the power of taxation is retained by the States. It is not abridged by the grant of a similar power to theTaxation Law I, 2004 ( 2 )</p> <p>Digests (Berne Guerrero)</p> <p>Government of the Union. It is to be concurrently exercised by the two governments. Consistently with a fair construction of the Constitutions: the power to tax involves the power to destroy; the power to destroy may defeat and render usele...</p>