CTA Case No. 1806 (Decision)
REPUBI,JC OF THE PHIL1P'P i~fi8 UOURT OF TAX APPEALS QUEZON CITY � JCJ I A!t�t . . . . . ' - v .rsu X - - - - - - - - - .. """ X ., 0l ' r.-.+ r. o'' +he c s :�r "'1 0~""+- ~ ~mi ~ 1 " "'" r of (~r I" l . lc 1.,.. , +- h � .. :'err "-b am U"'+- - r J 77, 605 . �~~2 <: '"' (. ' 7 ) ' 531 . 12 ' r c +-1 ly, or C� +o �;1 �f 1153,1.}7. 04 , U.l l 0 !:' .. i. s 1">0 !� 33 2
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nh~I~!OV ... c .-~r . ;~ . CJtSl!f 10 . lll06 - .3 .. l 21,600. 0;, � , (-)1' ~his & OUl"+ t I'.H~OOl'di""i +o .. t1~ d. OCU00~"'~ +, f 600 . 0 . 'Wfl$ paid , Vhf.le h, b lu""cs of 921 , or.o . ' 0 � .a u der... tclt .. .,. ..o"b rnid�t~ "" n (l\) o 4ual a~n al i~sttllma~� ot f92 11 01 i 00 ooeht tli -thi:l fl 's+ vnym' r.t +-o ti due 0" eh 1 1 19.56 &.. ~d .t-he � s ubsequ.~n+ o"' t:tV(!r.y y !Ill' ~h r a e1� Ut' +o �.~ "'ch , 1965. TO .U1r~~t . �h- ~ . m~"� o f t 8 �~1d boliH"CG, B firS~� mor +gog W S CfO-nst l. +U4>e(} y e buy~ ~orr� r ~-1 ~"~ l _� ri:lv;:; � o ~ h e s ll ;r3 . Jos:.. ~. rt;r(:'t 1 0�'11':." 1'\Q Jati l(iJ n;. ~nr e:l ,...:;. . J1e �:>r ij'Vt +o +-tt 'boo�s .f +- <)ol:p or t. i �~ , tt�� i S:tm ,.. ... o'' +-h bsl ane� qf' Hte ~~~<..,urt t �or f 921, (100 . ():') was fl rr lly comr.l� + �cr 1., +h. 1 n s: 1971}-'/l. c ao.t'd o"' prym � to' ~ s s p ~ved du:r1t~g 1- h +r 1 1 ( zxh. W'tJ) is ns f llnw~u ..:'Oii..tll ".moo~" (' U. 8it por ':e ' of f:al ~ wi~t !1o:r+eeg\A - Jr:.ly 5, 1955 . ~21 ,600 . 00 ,. ,. ,.. Fnym t ~"~t 60. ! 09 1921 ' '1f)"J. 00 ~- ~ ss: r~~~ ellm~ ""t P~y <:.~ t s {�c ivt::d 19~6 1959 1961 1963-1964 l96~i>-l965 19(,5-1966 196C-1967 l967- 196G 1965-1969 .. 969-19'/IJ l 77C-1971 ( wgd) Ge.rrnP.t"' '_.sguo.rl~f Jr . ( G) . ,n �U\ ...uGU ..I-1 :L � r: :~ f i .d Put~Uo , <:am.... + ,.,t � " i~ 3 3 4
D6Cto:nn...... C . or �A� nt .l:, ~ 0,. 1806 - lt .. . wh .11E~ p � t.t+f.r,.~r ra i,.,.:.H:v�tdu.ally � ~"'~d t-he B reelo,..a ~ r s, l lh h~>v b<lle � fill"' .� th t r ir:-e �?tme tax r t . ns 1.. , ulr:.r ly, +ht:; or er ditl ....a~ d �elar or .fElport 1 ... *:h !r ,�+t,tf?"fs for ""h y 1;1;;. 1955 l"'!o.r 1~ ~l� eix� �r ..ur"".f.t f, r '"h~ sue t:ro l g '"axabl y �a.r . d �"tro~ +r 1 ~sac+loft t�hougb h sate ~ra~"'~s o- tto~ a r . ct ~ 1~ ~hs bal ~ce sh ~s a�+aoh d lr +- r. P +1- "' � ... aati.OI"t was du ~ppar """"ly t-o ~"'.eir b lief t ~+ � 1d +r '"'S c+ o ._,�.,.s ""O"" "&:x-ubl , or t-hat. 1 +he s m!\. 11 s +,. xabl , + � r1ved t-h r - peid. rc+urns ....d '" <. b �Oks n'! accou. t g �h Pt: io t � :rom 1958 ued o~ ~ ,ru JY 26 1 1965 ~p 3 3 5
I> .~ TO N - o. ... t . ~ . l!t (' t,; 180 ... ; ... pro 1,._ d: 1Ved f'r n; ._ t�~ til Of +he � f or 1d pare ls or l~"d� -... s~rv � d upor1 p{;; +-t��i"l..,..-r of") rove:mbt\!r 1 0 , 1965 V~ rrra :4- o-r ... tl�a1 ...+- a"'d 1 vy . �t d. ~: ep+ ' a.. u + . 0 us r � o+ y +; e.,.. c ... +- .e � 1d go,.,.,. � � "L � hoto .+a+ cor 1� s, of +h
1'fl� 'P' Ir .... C � r � .& � CJJ3 NO. 1 J se d l ... t: r � ~�. e.. ~ :~ i s m """"e.r wa broughf- +o t. , u � +� rti '')"' or +h<. Ch.i ~~. f , Cnllec+-ton Bx s"'ch, l)eg 1ornl f'f'ico ~~o . it, f,Jue .e , f"; City, r spil !'lder~+. 1'!ausea t h t s �uunce .,of a ,.o+io o"" s izure da+ �ed ~otto Upor motto" of pf ti t 1 o~ers , and .rt~~ du o,..ice O""o hear 1ng t ._. i .s c oul'+- issu""( '1 ~ Bct:ober 27, 1966 . �ri+ of pr limif"l :ry- inju,..c+1o" suo e"'d"" ir"~ ~ +-he eollt:.c+io... ot� .,h all� ed d fie! ~"'OY itt- co e t ax :t""' ques "io"' ~md (). r.Joir:1"i r�es ond "'+. fJ";.:: m p.toc~eei""g 1v:t,.. h +-b-~ al;.c+-io"" sale o""' the pro1~ -ttios of u ,+1""1.orer s seher:- l ., or C ,+Pber 28 , 1966, en ~ i to~ e upo" ~ he p s+lrg by p +1- t-io ...er ot a sure+y bond 1 ... tb. s r.t or �155, ('00. oo . flfhr a prov vl o f th bOI"d pos+ed by ptEr+-it.:lo"'ars, � � 337
DJ.1.1 ~ lc !0~ - c . ~ . ~ . Cf.SL hO . 1806 - 7- e!u.r i n.g �h _ y <:W' S \.,rhc,""' payta r')foo.S W'Gl' ltl~;d by +-h Bn.r e dO~"~t~ Farms . l ""O: � +'o 1:~~ Bnr elo~a b.ro+h'-,rs? r r aa- "i o,.. 1"' .;u of-1 : ~ L~. s b � 'i'\ rk.ly r p<i>r+ed 11"\ t he i "'com +ax l'l'�tu.rr-s .- f' "'-h . t-1 +-i Ol'\ers I"'O t h!� .. f'r a..,sac*- 1o"' a,.,d o er +h�: :t"ollo11W1"g ye:Yr , mq ..._he +n~oyers be charged with fraud 1~ � etr r .. t-ur~s s �o p.re �� uc � +b .1-r cl 1 of r�r s crip- b7 pe . iti a~ rs t ~ +ha ~r~ ct ~h~+ t he ri dh� o +-h Gov~ r~"merrt +o &:~ts. fiHts a.gai""s� them t-:ho d~ f1- rw re. :!v d by + h m o,.. t i:.~rc h 17 EJ nd 22 , 1965 ., '..:�! .s~��r1l .�) r. idtiJ%.' t.rs"- bis issue~ ~ht reeord.s stw�('/ tur t ~.e t:t+io"'c:r'o f'i lt~d +- heir
... o ��~~n;r c.�" � ". AS~ m. Hl<t6 - 8- th. ev t>f 1 t~.r �..,e.l .,u~- ~or 196~ or a et od of ~.,r 1956.. n 1 h� pe.rlod pro 1d +ho � +be te - e r r De~l d p.rovi.aod. lf' 3ec+- :tor. 132 p!!" the �evta""'u.e God.e hzluld: a;::~ ply, oiti..,g /! ~"" r 'Y . CoUl"t: ''I f. 'tt ,.;x A,. p � at ~� �2 ' 569 1 li.U ,IJS t� 2.3 1 l97 , 5 �C A ;19, tt~d ot +h 'f'iv -y- r.r. l~ri.,rl ��r 1d d 1,. .:: cti~., 31 . th~~4-, :'Xt.n; ;~�� "" &s providE:ld f,... oect: 1o,.. 332, nf�.,+:rn~t!.l ~ r~il r ~ 0 ftl e ~1�--( --a--P-a-.. e--2-2-6-, -a-t-r--.r-~-e -. - 339
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D . n. 0c ~� o. 18. 6 w� .. 1 - ov r .... 1 "f6 rs . 1:,1.,..5 �c 196~", rld t +r "'8 cl ly e Nl +ed in t b f" ' orpor + "� onsid� r- r. c., ic� ly ""h sol .. ,., t ... p t: OI 1 r ... 1.,,..., , .. +h y +oc h 1 rs or r1 r� s , .... l .,.h ... s r OS o-r .. +-h S�. eo~du +- . d t ul.. "'C'JU ly d ur u 0~ , X ... s t� ... h r UdU ~�- ...... ~y I'\.f. +o +-ex e .., + d tG th m. t~ . c+-, +h b ur+ .... r. 0 ds .,. ... tn 1 :ly ho +h .., ..ur. ""'0 x+ ...... ~f' ... r ""'. ac'� .... 1.r.v + ~ .l ~ p e ls 0 1 ,., +we r he f.. ...... lo~r bl'!)+h -r ..... ... h ar. 0 '!<'~ �rns, r.-c. w ch a.I' P ...0 .. "' l"'Q t'l f-o 0 f ... .... s rd A +r r ~~ t I .. w s st b i""+ ( ... t:'J"' l . . r. + 1' f' u ZO"" I 1+y, ho .s uris v c�i ~ !'\ r r t ;a ,s .. 0 t . - ct- ...... . ' ""a ... r� .. "'g +-h f ct ""d d1 l]g 1. ""' V. ""h 1 .l r +h �le c i'" ... lo d 1"' q e t'l d+ :) ... r l"'~t su j ..t +-h ..., o"' ""Y A f'1o + X r~. +h 1 r 1955 .... 195 { '1\'"). �I l� 341
- . ;c tao.� ... � ' � ft . '#I l - 11 - d ....y '� ?p ov < hy Cb1 �f o-r +h I - ve~ttg "ior- "'C 4 n:i CO CU 1 1 +- h G h . ' e. J udi 1 ~'"': I � hil cords :) no+ 1 0 t: ::'}t'l 1 ir c"" r ') ,r 2' 1. su " .. Jl .... 0 ~h +c 'i " 0 ~ Lf1 1 ,.. y ... .. o~ �x bl ./ .. . t- Y~ r 19 5� / P� y p~ .. 1+1n '.:> 1 of �h 0. +o i"'Vi + .. s i ... +-h � i o .... ov "'� �' ... 0 .. 0 0 - 6. 1 /:r . c~ ...... o+- pr �um ( als 1...... *" "' no� l:l ed c ..ei.t�lly 1 . .. or e0 Li r r l' 4-h lit-y of ..... acf-io .... 1,, t !': t c � 1 ....-. ,.. 'i'on d, fc "' .. .l 0 r sr .... +b r 0 1 ,! ..... h(;. r ' ' 1 o+- ++ r w t .l ,..ts,..~ v 0: +� c ...... �r. 1 + ~ y 1 w. ~� 3 4- "~
D!:.'.: :r� ro.~ - "! � 'f' . r, . G.':__.� ... l\1:0 " ltl06 - 12 - +he :s l . bje t- Jf v o d "" +- ht. �. x. ( !~<�c Az.., .r n .. l..~on. ..- of '1ta:x A TlCJ �l.t, ltml'l� J .t' ~e 'i? 1 !: l!.ct.l le fU. � � lj qpo+ "'r:'> . se~ <~ d . i- t!ll"~E; d'~h. o" fn~+ s ; 4- hl f n "'I
oc,�r IC � .. � r:!AS , fJO � 1806 - 13 ... ir"' wl+h1 te.- yta~.::rs c f't. '1' +-h di.s- eovery (} r� t h (1) fnls tt-y, (2) f r ud, {3) Z")mts s 1,-:-r . u.r &+ h .,d +-h;.~ *' - +h..l law tf � Old b~ if'1.., erpre+e ., )- me.-. n ep&.rs ... +io~ :">f t:bc ,.h.rGo diffcal''E:I" t si ��utlf-io,..s of-fttlse r ttur , rr u-.c. 1 ,.t ro+a n with to 1?'1 +,~""+- ~0 G Vat~ +!J.:~t, '~'~ C f-ilUl"'t' file a rc:... u.r" ia s+re ... gt � ~"'Cd i mmeasurably by 1- he last; port t o '"' .:;1' *'he pr ...vi.s1ll" which Sfi.i gr g t-es +-ht: :�d. tu~~ io"'S� l,..+o +!.l"f;C 11f f'l" .., 1M3S'- S ,..~H!"Iely ' - .r�f..,lst+yu, ""'r uc., , tn�� J=.- 1ssio:r-" . "!"t bt. +;h..::, r~ i~; .:~ d1.f~. t{P''ce � ltai�-w-~,..�"f~l~ r +-u "'" ~;~ � vrr 1Ut.itJ l� .," ro... ur i'tu ea not e '.,.a .... :i�~d.. ~�.h ilt: the Pirs t- trteral.y :h - pl ElS d,; tri n~to ...� fr� m +-h .. ...ru+cf", whe+h r ;l..htt.~r -+>ioh al oJ.~ "'o t- t th � e c -' '"''i 1mpl1e $ i~+ e"+i "nl ~ec- 1+ ful ~+ry w1+h 1~~ e~+ +-o ~ vadG ,. 1 t-~x s du � 11 .Fr "'Aly , t f :r a u. dul ~:: ~"~f. l y, :~ 3 4 4
.... llr .. ,. pet~a ott . ~ lire ut1ule t--. 0 ~ '"ax r tur~ ... ~-o_ ,. �, d ... � It is belie ed, wi'. t:h0ut t~+ "'*' " "' 'rl:� r rroi" +o urals or ~h r f'llf' . t t a+ +h l w ii'T+ ~ds . n l't.: �I o""lY ~o cas .s 11'\>velv.... 1'"'' fl' utlule'~"~"' r +-tu���ui, o+hor'wi s , "'' ,..fo 331 . t-l"o 1 1""' � or .. ~~t: f':tw -y � r~r s::.t ip.. lv . et'1od ~\ t ry. +n d~ ~h thl iv �Y. r 't' per to p v1 � 1. ... ..... +i "' ri 1e s ef'e:r, to f�.ls Ol' ' +r . _.., 331 ll'"}~ lli eCll' 0 'f� t~.:tr�~s to �?h!cl� t, ar� ,, c~r 1od prov1d Dpl ic ble.. �;o quttt O.VEit'"''- $0 as t1r
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1' �I o ! O � ... no. 1 :� ~ 6 c �;� � �.. c AoE - 16 ... 0s }. I'! t: he A.z l"' a s +o whic t he f ive- y cr p - I'!c d pl' :) 1 ~et1 1" "~- c+ 0 .... 331 of +- h ;l Vti "'U, G d~ s prop'lflrly tfr plic ble . ""}� i,s i s e "' t i:r�ely di ffer ""~ 'bl " f i. v - Y El r" v" 31 of ... h . n .. v ~u . + 0 ... ' di s. tl �1s e s . e...,+ � ho v � r 1 t ma (~ � rt< g~ rot l"lr' +- .1e ch< r ti;e o f 'P t-1- t-1:>n e r~ th� >t + e ... e r i s ,, ' ...Ve!:l .. i g��"-io" o rried out ,.. 347
'"': !':~ IO � ... c .. �} � J\~ �' . 0 � 1806 - 17 .. t rm.ret:r bo""'d ror ~155 , (i C-') ,.ilti.id by ptd�i+� <~,..~u�s a. io ber by ca~ e ll ,..,.o pr;)ftOU~"~eemfH"~+ as to cos+s. A~ ocia+ Jtt~i - ~smon .; Avorc �d d d ~ot + ak~ pbr+. ,. 348
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