CTA Case No. 1348 (Decision)

RFDI RIIC OF THE PHILIPPIN S COURT OY TAX APPEALS QUEZON CITY

PRILIPPINE NATIORAL BANK, as Adsinistrator of the Intestate Fotate of JOCE CASTILLO Y REPUSRZO - vorats - Petitionet C.T.A, Ne. 1348 CAST

CO1MISSIONER OF INTSHNAL REVERUS Hesnondent.

DECISION

Thie refers to the claim for refund of the sum of P19,600.C0 which petitioner paid to respondent as pertial payment of the transrer

taxes on the estate of the lnte Joae Castillo

y Hefuarzo.

, Petitionor, as administrator of the Intestate tata of Jose Caatillo y Refuergo, who died on

Deeanher 25, 1953, filed the corresponding eatate

and inheritance tax return on Deconber 2+, l9+

declaring thurain tha amoumt of 13+20.00

as the assessed value of the renl property laft

by the decoased, and tho #um of P197,572.21 as

tho fair markot valua of his personal property.

Ponding investigation, respondent, on January

19,1955, iseued Estate and Inheritance Tax Notice

No. Ei-25748-53 against petitioner Bank for ths

ums of 21,096.53 ana P700.+0 as estate an

inheritance taxes, respectively, or a total of 28,197.03

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C..AEO.13 DEOISION -

2 Puraunt to the said assesaent, Detitioner

paid the total anount of P32,322.04, ineluaive

of aurcharge, intarest atd cciapredsa

After investigatiun, reapondent ooneeded the

Vaiwaticn of the personal property of the estate

correctly deelnred but determined the fair

narket valne of tho entire estate of the deceasec

nt Pl,618,309.88 and a net taxable estate or

Pl,l46.702.l0. Consequently,zespoaant issued Aso9smant Notice unhered n-2574-53,demnn g payment of the sus of v162,1917 and P82,253.40 as dafieianoy estate and inheritance

taxe9, ft cditine ho u of 19,257.22

ad P10,56346 previounly pai on accownt of the

aforesntd provinional assessent.This dcfieieney

anseaament ts bnacd upon the incronued vaiuntion of tho Feal property an detertnea by respondent.

Pendirig ita requswt for neconstderation or rechction of t deficiency asnessment, petitionor cn Fchruary 15,1963,pe1a tho anot of P19,600.00

an psrtial paynt mder Aasessment Notise Ho. A-25748-53.ResyonGent donied the request for econsideraticn, but ccnceded the correctnens of the position or petitioner with respect to the personal property deseribed aa follovs

ing of tve promioaory notos dne from nd Angola Vargas Sonli m Fenns to Lofon for the reason thnt ono of the the mpounca Traneisco Beniter, Jr. l.The ountof P25,0o0corpri-

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C4.CA8O.13 DOISTON -

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cote for 5,000 im xelusively in favor er the widov of Che decedent and that the originnl aount of the no longer ita praaant valuo at the decidad 0fpr196. wrs.Bectri K. Vaa.6o Caatillo other zromisory note for P20,000 is time.or Geath of the Geceasod ns by he Court thra its Orde

to e truatod vice vozon but not to be of redeanod San iguel Brevary atocks ahoul refiected wder tstouks and Bonds cr *CAGH* tazan up in both captions. x x x The mot of B00 velu ir he aama anount ia to be No doduotod rron the anount of

aa thiaamaunt csos not forn a part or i Novbor 1953 to vory aame anaumt yal hended to Kra Patria Castillo-uandia in ths amgunt sf 5,000 ahoula ba eloto Tro tho totals of iCradit Dug the Netate che otats a of ongnbar 25 bo used as oducationil exponues o he sthr teo eirs, Lyia and Ivonne Castillo, ho vere thon studying in (tiss at danth or the docelent This theited 3tatosX. 3Thecroete from rs 1953

Petitioner asaatln tha correctness of the

inrt ansnnnnent. lomoc, tha cinim for refund f the t of 1900.0

The principal isaue raised in hi care relateg to she valnation of ths renl proporty

left hy the decensed Jose Caetille y Keruormo

for purposes of aatate and inhsritance taxes.

In Cetersing the feir nsrket value of

roal property ur tranafer ax purposas, tae

inw provides

0 2 th as Itams I, PP338339BIrrfred 20 nh44

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C.T.ACANO.134 DSCISION-

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reai property the assessad value as tion of ths executor, adiinistrator be considered as the fair market value, at its fair mmrket value as of the estate tax or the heirs in the case of inheritonca tax. purposa of determining fho value of death, as shovm by the tax rolls shall 91, Revonue Code. time af death, or aa of six nonths there- after, at the electicn of the ezecutor cr edministrator in the case of the or the time or death, or, at tha elee- or the heirs, aa of six months after unless the contrary i showm (Sec. yhe estate shall be appraised Hovover, for the

The inv requires thnt .the estata be valued

at its fair market value which has been fudicial

ly defined as follows

xination. A valuetion of absoluto accuracy is impossibls. prudance on the National Internal ney- enue Code, page 597 citing City or RAilvay Co.V. Fabie,17 Phil.206 sctence and the valuntion reuched by Manila V. Manila Raiirond Co. V. Alano, 36 Phil 500; Manila Hailrond Co.V Velnsquez 32 Phil.286 Maniim Railroad Co.V. Eminont Dmain 2ec 78 stock Yards Case, 120 Me.y+l Socanegra V. an abnolute term, it involves hrnan ocuntion. Valuntion is an inaxact whetever method mast remain an appro- nihility of precise vaiunticn is goneral- Genorally, howevor, the rarket value or property is tha prics which it will one vho dosires, but is not obliged Caligsihan, i7 9.G:1345, Lovis on 1y bring when it is orfered for sale by is tnder ns necessity or having it (IIFormilleza, Con. R to to requiro'mathemntical certainty. soll it and Pecognizod, the law is not so oxact whe tera 'narket value is not C.A..420,Oe.1,1959. strada,25 Phi1l.208;Manil is bought by one who Commentaries and Juris- This impos-

Petitioner claima thnt the valuetion mede

by respondant is grosaly exeessive. It is

arguod that the assessed vnlue of the real

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CAENO13 DRCIGIOH

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proparty ns ahom by the covering tax ceclarations

in foree ae of the daath of the decoased shoule

be eonsidored as the fnir merket valun. It is

llaged that the exeeinors had no porgcnel kno

ladge or the oondition and valne of the property in question nt the time of the denth or the doca-

dent+ On the other hand, roapondent maintains

that the valnation given by the exaniners of the

Bureau oc Intarnal Revanie representa the fair

maritot vaiue at the time of the decedent = domt

os as of aix montha theraafter.

An eximination of hg records shovs that

Paapondant oppraiso4 the Toal property in question

higher than the asesad valmes appanrine in th

tax rolia In the detormination of the fei markzt value of the real property, various factors wore takan into considerntim hy pondent xt the time of th f Joao Ceatillo y Refuermo inveatigetlon and olar inspection of ths nrope

ty by resyondent's agents to asgertain ths kind

locationy condition ani nature hereofg and the

prices of innds ooar cr edjoinine the property in

guostion, as gathered fron reprosentative dceds of aales secred from notaries pablic.

V here being ovience that the asseseod value cf thig renl proparty in queation as etom by the

tax rolla dose not Yepresent tie fair nrrot valve

Uhereef, ws find respsndant etorination t

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C.A.CA.1348 DECTIO -

6 bo the correct fair arket value. thder Soction 91 of the Boveme Code the real property is required to ho appraisod at its fair market valae

and the assessed value thareof shall be ccmsi-

dered ar the fair market velue cnly when evidenee to the contrry has not bon shom.Bce Coll.vs. PiarC.R.os.I-116and I-11688,Jan.28 l96l). It hna been clearly showm tn thia caae

that thc aisoased vale of satd real property does not represent ita fair market value J

But petiticner chailengas tho competency

cf the soaminern in appreising the real property

of the deceaued and tried to direredit the valua

tion made by them. That the exaniners have no

peraonal imovledge of the condition and value of the property at the time of death of the deco dent ia not oufrieiont evidence to shov th in-

corrcetoeea of the valu tion in the abecnce of

proor that the apprainnl is wmrenaonahle,

Respondont hovover agraod to delete the amount of 5,000.00 as dedacti1le iten om the perscnal property of the decedent imilarly respondent sgreed tht the amomt of Pl,800.00

Peyresenttng the velue of the redeened San Mguel Brewery atoeks, be considered only onos.

With respeot te tho ount of P25,000.00 due

from the pousen Fraeisco Benitex, Jr. end Angels Vargas, it is not disputed that the pronismory note

Ior PhG0o.00 xeouted by es.Angola Benitez i

the ptraphernal property of the viaov, Mrs.Bentriz

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DEOISTON C..CASE O.1348

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M. Vem. de Castillo, and therefore, it ahould be

dahieted aceordingly.The other pronisnory note

for P20,000,00 #hould be redueed to P10,800.90 Der findinca of the Court of Pirst Instanee of

Kanila, Baneh XVI, 2n Civi1Case Mo38200.

Eh3,p37-331,BIRr0.

Wsntrow, the claim for refund is deaied

and petitioner is hereby orderod to pay the sms of 162,191.47 nd 82,253. as defi0ienoy

eatate und inheritance taxes, sureharge and

nteret, miu the anount of 51,922.o4 previos-

ly pai, and the anount correspcnding to the

f 5,0000,800.00

an 14,200.00, plua nterot at ths rate of 1

a month aa provided in Sec.1cibi of the

Tax Code With conta ugainst petitioner.

O OERT. Qn CyAp1 30 1966

Aeting Preoia ing Jadge 7O (nd ROHAN M.UMALI

I cou

SKS Assooiate Juige AdrKa oUCC FE AGALVAR AE

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