CTA Case No. 1929 (Decision)

REPl'HJ.IC OF TilE PHILI PP I.~ES C(!lJHT OF TAX APPEALS QUJiZON Cl1'Y �� �9 ... - - - . I ll c ,.cit ts t rtc c it t!"t 35 ,542.. r i o"' 50 ,.._ c, c � J� il ' ~9 1l ' it to cn � r t r ./1 ( ) )"'... t p- . n � . .l :'\ ,6' to 1 1': c- n J:� t j !:) ' co r � l z co., t -t st t~ #- t ., to 5 7 n 5. 3 ' ct1 247

D)'}ClSl �. � c c ~ ~o. 1929 2 nJ. 1n n n eor~ n~ . th. oy t � t nrl 1nh tane or 1t c it t' w.r~ � i 1 b p 1 tio r y ' 19~7 9A5 , cttv~ly � .,f~r p . nt cr "th . 1- t onal trans r t . . d . , P"l i tio r 1 ocounta t t e. 91 th� t .. h � th~ ... ro 1 Or' C pot- nt th r vts tr . r r t n .; fi tng th t .t (1) . ~ th p a .tn h t.h ryo th y ve y lOWJ (2) c rt ur .c 1V bl s ' h th r t ~n; (3) t jU! 1<: w,.. r llo � n ct� o r o 0 s�t. t� ; � � (4) e t 1 cl 248 . \

- �~vr., lor TC ~ . 1 29 3 t �- d c s t t.t:) � rn no s b. ta.n t t . 1 ~e� On prtl ,; , 1.967 , s on~ant man fro t1- t1o � : , ~ c toto of y Pac �a t t ,. pay ~. n t. of rot owa s .. . . . . ������� . .. .. .. t to 8 ................. r- c . 1?t o� th 1 tt 0 Pr11 2 , 19f..?, pt. t tton r ' b 1i ll - t1o .. 0 � w r1 � b halt o � p t1t1on t" w.o w s by .nt to eoll et t~ t ;; 249

� (2) i - / � t 250

. ""C l J � 92 5 1 p. t t ' l t 9 0 11 () y �/ t 0, ht il lb ... t1o � co () y t � ~ !:; , h y t- i l ... ) t 1tl P" 1 to ' 19~ � e t th ... 0 t. 1 t 0 io �� . 1 c � ... nt ' o .. c. � 11 p yi t c00 t t f. t ,. 251

s o~ ... C~"' � o 19 .{ t _1n� 1 w r r � .t ..� 1 t t �~ n1 PP c on, 1 r c1 0 t y ' t:t r 0 0. 8y ...... .... ... .... ...... ............ . c ' nt. t 1 P'ti 252

-. . ,.,cr I c '.lf �' 99 7 cont""o . 111 f!! 1 t th r 1 t , 29 ' t 0 .......... ' o, "8". 3 n l p t t 3 :.t-2 912. oo, eo - pt 0 ct �' 253

- u n "C;r) I "" C C1 !. 'tle. 1929 8 !tt ! 3 , t oc� nt y vi� nt ..tl �1n urt1 1" .. th� t , t e� r ~ of h ot ... 1 l . r d b TC1' o. n val � t-io 0 th t 0 p l '. tl' it. b h~ 19, 074. ,;;.; ........ '39716 1,5' 1. 1 TO'l.~ .� ��. �� "' � T t1t"1e : i.osu 1n 0..;~. th n li lot i-'0 tl � tt d y th wo "' t r v n� X1 . ~ . , - l to �14 , 1 cl ~ 1 ' p � r c. ) . l,7l+. oor.r r �~d oy ~ a.pp atsal r port or r" 1 to.te pra 1S � ( 1 h �� - 3, � 149-15 , T � ) On t ~ . �"liJ:' n , th . eo s � ,.� rt d � of l a t 1 ~; y th V:S: c Yr tf tea. of ! t tl "o� 39716 � rir~t1 � s " .. 254

.C � l ,:! T(� 9 .-~ .). 1 �.L 0 � �o b t. t .... '� 3 (; t ... t" neon ct- 1 � p p .o p ro t ... tf.\!, p � c 'h 0 Q 1. 255

'10 t tr ' n .co t .. tctoey (etlll .r' � ,m,. , 237 ( ) 7) ,.. 3 0 r T 1t m t .. t e b� o. 397. 1 �- .r �s xp t ( . \acp tt ' 8o 1, t. � ) �~ c t. t / 1, 9 1t 28' . ~ y th ... t r ,� o, or th 1 t I a. . to 735 209.02, 2d,C5C.l2 ,1,.. anr1 QOl -,et1 1 f ... Oll '01/ V 0 &: (& � �, 34 &: 3 , B � r e. ) T. . r ... t c ~' l c �� "' t 05'0.1 ~; , . t, t lonJ tJ 7. 7f 7 ~ r.tSt :tt r e lVobl s me nt1nJ to 0 '!.:' . t in t~ tn- 1 e -:1 n ' t 0 t� 256

~c ro .. c 929 ll pos � 1 s o!' 37, 07 � ? w - l ct ;t1 1 th l t t0 t (3) . t S COt!Cl to y io ct nj 0 1 .. +t ort. "" t.l t c1 l.., ceo ts t 0t n" t c ., 1- � .() t� t l 0 nr - , r G et o. ., t ti' e n t l t� t concl ' the 257

_:Cl~, IO ..., C l C ~ � No. 1,29 12 t1� ti t tl: � , x- t 0 0 ~1 lly i - bl s ru t7(, $65. � � t PP� 175� '! 3, CT r �e. ) 1 e by itt ~ ~ 2 � , , .,, Z-1 t bt x�n1n� ~~ r r c o'r c i4 0 1<1 nc to 1n w � ~it s th t tc tl n:� fo �... p:. b - �t 0 . !I - of' th ill 01' th t t. t- lb .. 0 ti .' � it - ti 2 .ooo. c � ...... ��������..�.�.�.�..�.�.�.~"�.�..�.�.�.�. lriliiiiiil{li!!i!I!C!iill=a= �� 258

- 13 0 fl ,o .o ' th~ ur Hl)( ) Oi t c ..., .� J. d r �1, .,)2?.43 t tat,, l 0r j bj tho au 'e :r nt in.... 1n.; n b c '� '3 P� o�... .� � t 'r.�'l no t ct 1" 11n 111- "lllrt, :: , thor...roro, c th t t '� r - y 9, 19 J, th. .y c cow. ot h a 1 a 1l.1t:J...."" l, 01,.327. 3 eh ort r 0 0 s:.1 <:l' t 1n t t1ng th~ atl'l 'tr�n l1'"b1l1t.ia<: r:!t r ... 1 o . . 1n �h ��9 2 bal nc ut ch o is i.ol:l lon 1s not suft1c:1 t to w 1'~ t , of th ' ) 0 th.~ t , 101, 32-7. � l hil t n t "� t . r~ eo t"! u eo 1th s te fin 0 t th . lo � �� "" r th nt 1 t � ~0 th - $ 1 tn� b by th 1 t. tly , t.axp: .. .r ' e ec unt .. 1 n4 1 259

7C ION - CT C o. 1929 14 liability hich o s o t appear in his balance she t ./ has no material b a ing on his income tax 11 bility. bov all th conclusion an sp cul.ation of the r - inv~stioatin xaminers , it has b en st blish by th pr~pon ranc of Vid nee at th~ trial of this cas that th lat y Pac was in bt in th total amount of P-1 ,101,327. 43 to th~ China Banking Corpora- tion, Philippin Bank of Co unications and Philippin ational Bank in th~ amounts of �555 ,169.49, P200 ,454. 48 and 11345,703 . 46, resp ctiv ly, at th t e of his ath on bruary 9, 19 3. {S e pp. 1 , 5 & 35, Bm r c. ) 50% Surchar� � h 50~ surcharg as fra p n lty impos d by S ction 102 of th National Inte rnal Revenue Co e is not applicabl . to t h is cas becaus "'PO nt ' s xaminers !'ailo to s tablish by Vid nee that the ec nt �s cuto an . adminis trator has fra . ed the 'ov rnment of its la~>~ful r. v n � On th contrary, r spon nt ' s thr e ( 3) aminers app ar to be car 1 ss and haphazar in th 1 inv s tigation of the d c ent ' s ..stat � s, oains t th fi ings of t r ven xamine this Court oun in th r co an in t~ Vi ence sub- . � mitt~ by petition. er a lo r net taxable estate of th lat y Pac ~nting to only 722t389. 80 co pute as follows: 260

I ... ..................,. ) I . thl" 1 tr ns - 1 n or t. ,-. c u �n . �h~ t .. n i nr to ctat ,?7o. �~ J. 'C () t dlt � ~ !J t. � 0 t or .. c1.1on r .sp~n t is� lo ~ t" - l r p l ~ -~ �S 0~ 35'lt9+ .-33 u .. ~ tr th;, ( t:IIQ CHltor <!'} t t to . i c ne 11 n o" inll ... t.o CO"' " :o c a i! ~ ct. '1thc t ir1no ..nc � t so ' C1 Dec 2, 1973- 261