CTA Case No. 71 (Decision)

K� f' U3LIC OF THE PHILIPPINES COURT OF .TAx APPEALS ~NILA ''I BATANGAS TR~NSPORTATION COf1PAtiT, C. T. A. CASE NO . ?1 and I.AGUNI TAYABAS BUS COMPANY, � Petitioners, - versus - COLlECTOR OF llifTERNAL REVENUE, Respondent . x- - - - - - - - - - - - - - - -x DECISION This is an appeal from a decision of the respondent Col- lector of Internal Revenue assessing and demanding from the petitioners Batangas Transportation Company and Laguna Tayabas Bus Company the amount of �54,143. 54, allegedly representing deficiency income tax and compromise for t he years 1946, 1947, 1948 and 1949. Ho\vever, before filing his answer to the peti- tion for review, the respondent set aside his assessment of �<54, 143 . 54 and reassessed t he alleged i ncome tax liabilit ies of the petitioners at �'148, 890. 14. In their reply to respon- dent's answer, the petitioners therefore ask t his Court to consider their reply as an appeal from the said assessment of �'148, 890. 14 based upon the same grounds as those alleged in their original petition. It appears t hat the petitioners herein, the Batangas illransportation Company and t he Laguna �rayabas Bus Company, are two distinct and separate corporations duly organized and existing under the laws of t he Philippines, and are en- gaged in the business of land transportation by means of motor buses . The first was organized in 1918, and the second, in 1928, and each now has a fully paid-up capital of Pl , OOo, ooo. oo.

DECISION - I:. C. T. A. CASE NO . 71 - 2- Before the last war they maintained separate head offices, the Laguna Tayabas Bus Company in San Pablo, laguna, and the Ba- tangas Transportation Company in Batangas, Batangas, as well as separate books , fleets, management , personnel, maintenance and repair shops, and other facilities . During the war and as a result thereof, both companies lost their respective pro- parties, while their American officials were interned. Sometime in April, 1945, the companies resumed operations when they acquired fifty-six (56) auto-buses from the United States Army. Half of these trucks were acquired by the Ba- tangas Transportat ion Company, and the other half by the La- guna Tayabas Bus Company, being registered separately in their respective names. Beginning Harch 1, 1947, after the resignation of I\fajor l~tin Olson as Manager of the Laguna Tayabas Bus Company, }~ . Joseph Benedict, Manager of the Batangas Transportation Com- pany, was appointed manager of both corporations by their res- pective boards of directors. The office of the Laguna Tayabas Bus Company in San Pablo City was made the main office of both corporations. The placing of the t1vo companies under the sole managership of Hr . Joseph Benedict was made by the President of both corporations, Nr . Hax Blouse , under and by virtue of the authority granted by resolution of the Board of Directors of the Laguna Tayabas Bus Company on August 10, 1945 and ratified by the boards of the two corporations in their respective reso- lutions dated October 27, 1947. According to the uncontradicted- testimony of Y~. Benedict, the purpose of the joint management or the so-styled ''Joint Elmrgency Operation11 of the petitioners corporations by one management was to economize in overhead expenses. By means

D'CISION- I:. C. T. A. CASE JO. 71 - 3- of this joint operation it appears that the petitioners have been able to save the salaries of one manager and one assis- tant manager, fifteen inspectors, special agents , and one set of office clerical force . In fact , the petitioners have been able to save at least �200, 000. 00 a year, or PlOO, ooo. oo each. (pp. 14- 16, t . s . n. ) At the end of each calendar year, all gross receipts and expenses are determined and the net profit as of that date were transferred fifty- fift y (50-50) to the books of ac- counts of each corporation. (pp. 21- 22, t . s . n. ) . Examiner Miguel Grafilo of the Bureau of Internal Revenue , who made a thorough investigation of the operation of the lfJoint Emer- gency Oper ation, n of the t wo companies, testified that the books of accounts as well a s the reports of their auditors, Price, Waterhouse, White , Page & Company, show that one- half of the net profits of the joint management vrent to the Batan- gas Transpor tation Company and t he other half to the Laguna Tayabas Bus Company. (pp. 49, 54, t . s . n. ) . Each corporation then prepared its own income tax return from this fifty per- centum of t he gross rece ipts and expenditures, assets and lia- bilities t hus transferred to i t from the ''Joint Energency Operation'' and paid t he corresponding income taxes t hereon separately. On the theory that the resources of t he petitioners were pooled together in the "Joint Emergency Operation" and a joint venture was thus formed and organized, the Collector of Inter- nal Revenue wrote a letter to the Laguna Tayabas Bus Company, informing the latter that there was due from it and the Ba- tangas Transportation Company, the amount of �422, 210. 89 as

DECISION - C.'I' . A. CASE NO. 71 - 4- deficiency income tax and compromise for the years 1946 to 1949, inclusive . Since the Collector of Internal Revenue caused to be distrained, seized, and advertised for sale all the rolling stock of the two corporations, the petitioners had to file a surety bond of ~422 , 210 . 89 to guarantee the paynent of the d.'oresaid income tax lia:bility. After some exchange of communications between the peti- tioners and the respondent, the latter wrote a letter dated January 8, 1955 , informing the former that after crediting the overp~ent made by them of their alleged income tax lia- bilities for the aforesaid years, pursuant to the doctrine of equitable recoupment , the income tax due from the 11Joint Emer- gency Operation" for the years 1946 to 1949, inclusive, is in the total amount of �54, 143. 54. The petition for review is an appeal from this assessment, but , as stated above , the respon- dent set aside his assessment of ~54, 143 . 54 and reassessed the alleged income tax liabilities of the petitioners at ~148 , 890. 14. The last mentioned amount is what we are now called to pass upon in review. Before proceeding further , mention should� be made of the decision of our Supreme Court in the case of Cesar Reyes, et als. vs. ~ax Blouse , et als., G. R. No. L-4420, 1~ 19, 1952. This was an action instituted by the plaintiffs as minority stockholders of the Laguna Tayabas Bus Company to restrain its Board of Directors composed of the defendants from carrying out a resolution approved by approximately 92-1/2% of the stockholders, authorizing said Board of Directors to take the necessary steps to consolidate the properties and franchises of the Laguna 'I'ayabas Bus Company with those of the Batangas

DECISION - C. 'l' . A. CASE' NO. 71 - 5- Transportation Compa~ . Among others,- the Supreme Court found that: 11To the fore going we may add the following: the Lagw1a Tayabas Bus Co . and the Batangas Trans- portation Co . are pre-war corporations organized in 1928 ro1d 1918, respectively. They ceased ope- rating during t he war . In April, 1945, they re- sumed operations, and pursuant t~ the authority granted by the respective Boa r d of Directors , t he two companies were jointly operated under a single management . In view of the success of this joint operation, it uas strongly recommended that it be continued and made permanent. For thi s pt~ose a meeting of the stockholders was called, and the disputed re solution was approved. And thi s reso- lution was approved because the stockholders found that with the consolidation, the two companies would enjoy the services of the same technical men, would invest much less in the purchase of spare parts, would effect s~vings in running one machine shop, instead of two, would employ less personnel, and in general, both companies would effect a substantial economy in men, materials and operation expenses . The merger or consolida- tion has been voted upon by two-thirds vote of the stockholders . Their action is decisive. They have acted having .in view only the best interests of both companies . It is not fair to allow a small minority to undo or set at naught vrhat t hey have done . The remedy of t he appellants is to r e- gister their objection in writing and demand pay- ment of. t heir shares from the corporation as pro- vided for _in section 28-1/2 of the corporation law. 11 � Furthermore, in tpe first portion of paragraph 4 of t he petition for revie\-1", the petitioners allege: 114. In order to economize in overhead ex- penses , it was decided by the boards of directors of both corporations to maintain only one princi- pal office for both under t he management of v~. Benedict. This management was styled ' Joint Emer- gency Operation. ' ~ch corpor ation retained owner- ship of its properties, franchi ses, and equipment and of the income therefrom, subject to the con- trol and disposition of its O\Jn board of directors . 11 And in paragraph 3 of his answer, the respondent avers�: 11e . That he admits the alle gat ion in para- graph 4 thereof t o t he effect that the Batangas Transportation Company and the Laguna Tayabas Bus Company prepared their own income tax returns , but

DECISION - C. T. A. CASE NO . 71 - 6- denies specifically the allegation that the 'Emer- gency Joint Operation' established by the peti- tioners herein bas for its purpose the economizing of their overhead expenses, and states that said 'Emergency Joint Operation' is a new and distinct corporation. � � " The pet itioners presented the testimony of their manager Joseph Benedict as to the purpose of placing the two corpora- tions under a joint management. (pp. 13- 16, t . s . n. ) . The respondent having failed to introduce evidence to the contrary, and there being no reason to doubt the testimony of y~ . Bene- / diet, the stated purpose, namely, economy in overhead expenses, should therefore be considered as duly established without contradiction. ~only question in this case is whether or not the "Joint Emergency Operation" or joint management is a new and I distinct corporation liable to income tiX under the provisions of section 24 of the ~ational Internal Revenue Code, separately and independently from its members , the petitioners herein. The law which defines t he word corporation as contemplated by said sect ion 24, is section 84 (b) of the same Code , which reads as foll m..rs: 11SEC. 84. Definitions.--When used in this Title- X X X X 11 (b) The term ' corpor ation 1 includes partner- ships, no matter how created or organized, joint- stock companies, joint accounts (cuentas en parti- cipacion) , associations or insurance companies , but does not include duly registered general co- partnerships (compafiias colectivas} . tt As stated above, the term "corporation� used in t he income tax law, embraces not only the ordinary corporation organi zed under the corporation law (Act 1459} but also those organizations enumerated therein.

DECISION - C. T. A. CASE NO. 71 - 7- The respondent does not and cannot claim that the "Joint E:!Rergency Operation11 is a corporation organized under the Corp- oration Law, hence the issue is limited to whether the said "Joint Emergency Operation" comes within the purview of the - other organization included in the foregoing' definition. ~Ap plying the statutory definition of the t erm 11Corporation11 to the joint emergency operation or joint management, there can be no question that it is not a partnership as the same is de- -fined by our laws. Even if the t erm is given a broad non- tech- nical significance and includes within its purview any medium for the transaction of profit-seeking activities, the 11Joint I Emergency Operation" still lacks t he essential characteristics of a partnership, defined under Act 1767 (New Civil Code , Art. 1665 , Span. Civil Code) . This is because there was no contri- bution to a common fund and no property of the petitioners was ever transferred to the joint management. The companies r etained ownership and ultiD~te control of their respective properties, the joint emergency operation being confined only to acts of management. Furthermore, there would be serious doubts of the legal capacity of these corporations to operate in partnership, there being no express authority under our Corporation Law (Act 1459) to such effect. "Unless the authority is expressly conferred , as a general rule , the management of a corporation cannot bind it to continue in a partnership rela- tion with another, as thi s is considered to involve too great a delegation of the power of management ex- ercised by the board of directors. The general ma- nager or officers 6f a corporation would have to ob~ the orders of the board of directors but each partner is co-equal in the management of the firm unless otherwise agreed. As t he Tennessee Supreme Court has said: 1the whole policy of the law creat- ing and regulating corporations looks to the exclu- sive management of the affairs of each corporation

DECISION - C. T. A. CASE NO. 71- - 8- Qy the officers provided for or authorized qy its charter. This management must be separate and ex- clusive, and any a~ement by which the control of the affairs of the corporation should be t aken from its stockholders and the authori zed officers and agents of the corporation would be hostile to the policy of our general incorporation acts�n. (Ballantine , Corporations, 1946 Ed. PP� 234-235 , citing J.VJallory v. Hanaur Oil- Workers, 86 Tenn. 598, 8 SW396 and Hosher- Platt Co. v . Miller, 238 ~~ss . 518, 131 N. E. 310) . ( For the same reasons , we hold that the 11Joint Emergency Operation" cannot be embraced by the t er ms 11 joi nt-stock com- pany or a joint account (cuenta en participacion) . " The "Joint Emergency Operation" was not organized primari ly for the purpose of carr,ying on business and naking prof its; and no capital stock, was contributed by t he petitioners _nor did they receive transferable shares of stock. For even greater rea sons, this arrangement of 11 joint management cannot be classi- fied as an insurance company, for it is obvious t hat even t he minor essentials of an insurance company are not present. ) Considering that the "Joint Ene rgency Operation" is not a partnership, joint stock company, joint account (cuenta en participacion) nor insurance company, the question at bar t here- fore is narrowed down, to whether it is an t�association" within the purview of t he definition of 11corporation11 under section 84 (b) , N. I . R. C. cited supra. This question appears to be of first impression. In passing, it is well to observe that our section 84 (b) is identical to section 3797 (a) (3) of the United St ates Internal Revenue Code of 1939, and in this respect, resort may be made to American aut horit ies on t he concept of ttassociation11 as embraced within the term 11corparationn for income tax pur- poses.

DECISION - C. T. A. CASE NO. 71 - 9- According to a general recognized treatise on income taxation (Mertens, !.a.l.oT of Bederal Income Taxation, 1943 Ed. Vol. 7A, Sec . 43. 10, p. 801), jurisprudence establish three concurring essential tests for determi$g ether a particular organization is taxable as an association which are as follOivs: nrr (1) two or more individuals are ~ ciated together in a joint enterprise (2) for the carrying on of a business for profit and (3) the enterprise has substantial resemblance to a corporation, it falls within the provisions o?the income tax statutes as an association axation as a corporation. All of tpese ele- ~ts are essential , no one of them standing alone being sufficient to charac~erize an or- ganization as an association taxable as a corp- oration. rr (Mertens, cited supra. ) In applying the foregoing texts to the case at bar, the issue will ultimately be one regarding the determination as to whether or not, the 11 j oint emergency operation11 of' the peti- tioners has a resemblance to a corporation. This question has been raised in the leading American case of l~rrissey v . Com-~ missioner (1935 , 296 u. s. 344, 80 L. ed. 563) , which involved a trust sought to be treated as an association and taxable as a corporation. The entity in question was created to d~velop a large tract of land by constructing and operating golf courses, club houses , etc . , and to conduct incidental business, including the purchase , operation and sale of' properties. The powers of manage- ment and control. thereof were vested in the t rustees , who were authorized to add to their number and to designate their succes- sors. However, they were without power to bind the beneficiaries , and all persons dealing with the trust were required to look to the trust property for payment or indemnity , Transferable com- mon preferred share certificates were issued, representing bene- ficial interests with described rights and priorities. The

DECISION - C. T. A. CASE NO. 71 - 10- trustees were empowered to convene the shareholders to make reports and'to receive recommendations, but the stockholders ' votes were purely advisory. The death of a trustee or bene- ficiary had no effect upon the life of the trust which was to continue for twenty-five years unless sooner terminated b.Y the trustees. The Supreme Court of the United States held that the trust was taxa'i:)le as an "association" within the purview of the term 11 corporation11 in income taxation, and in its decision stated among others, that: 11While it is impossible in the nature of things to translate the statutory concept of 'as- sociation' into a particularity of detail that would fix the status of every sort of enterprise or organization ~ich ingenuity may create, the r recurring disputes emphasize the nedd of a fur- ther examination of the congressional intent. x xxxx 11The inclusion of associations with corp- . orations implies resemblance; but it is resemblance and not identity. The resemblance points to fea- tures distinguishing associations from partnerships as well as from ordinary trusts . As we have seen, the classification cannot be said to require organi- zation under a statute, or with statutory privileges. The term embraces associations as they may exist at common law. Hecht v . Malley (265 u.s. 144). We have already referred to the definitions, quoted in that case , showing the ordinary meaning of the term as applicable to a body of persons united without a charter 'but upon the methods and forms used by in- corporated bodies for the prosecution of some com- mon enterprise . 1 The�se definitions, while helpful, are not to be pressed so far as to make mere formal procedure a controlling test. The provision itself negatives such a construction. Thus uni ncorporated joint-stock companies have generally been regarded as bearing the closest resemblance to corporations. But, in the revenue acts, associations are mentioned separately and are not to be treated as limited to 1 joint-s~ock companies, 1 although belonging to the same group. Whi le the use of corporate forms may furnish persuasive evidence of the existence of an association, the absence of particular forms, or of the usual terminology of corporations , cannot be re- garded as decisive. x x x x x 3}

DECISION - C. T.A. CASE NO . 71 -11- " \~at, t hen, are the s~lient feature~ of a trust-- when ~~ted and_maiQtained' as ~medium for_~~~- ing on of a business enterprise and sh~ring its gains-- which may be r egarded as making ~t analogou~. to a cor~ orate organization? A cor�orat i on, as an entity, ho~q~ the title to the ~ro�erty embarked in t he co~~~~ gndertaki ng. Trustees, as a continuing body with pro- vision for succession, n~y afford a corresponding ad- vantage during t he existence of t he trust . Cor�orat~ orga~ization furnishe~ t he O��Ortunity for a centralized ~~ment t hrough repre sentatives of t he members of the cor~oration . The designation of trustees, who are charged \.Jith the conduct of an enterprise, --who act 1in such the same manner as directors 1--may provide a similar scheme, with corresponding effectiveness . Whether iillLtrust~ are named in t(le tr1J.st instrument \vith poi�Jer t&,.J?_~ect successors, so as_to constftute ~ self-uerpetuating bod;v:, or are selected by, or with the advice of, those bene- ficially interested in the undert aking, centralization of management anal ogous to t hat of corporate activities may be� achieved�; An .enterprif!!e carried QB..l?x._means of Lt..rust may Q.e secure ~rom termination or interrupti~-g. by the death of owners of beneficial interests and in this respect t heir interests are distinguished from those of partners and are akin to the interests of members ot ~ruoration . And the trust type of organization faci- litates, as does corporati�n organization, the tra~sfer of beneficial intere s~ithout affecting_ihe qontinui~ of the enteruris~, and also the_~troduction of lar~ numbers of participant~. The trust method also permits the !imitation of the personal liabilii[ of partici pants to the property embarked in the undertaking. nIt i s no ansvrer to say tha:t these advantages flow from the very nature of trusts. For the question has arisen because of the use and adaptation of the trust mechanism. The suggestion ignores t he postulate that we are considering those trusts which have the distinctive feo.ture of being created to enable the participants to carry on a business and divide the gains which ac crue from their common undertaking, -- trusts that thus �atisfy the prin~ conception of association and have the attributes to which we have referred, distinguishing t hem from partnerships . L~ sugp a case , we thi~hat these attributes make the trust su:ffuieg_1J:y_~nalogo'!.�._to cor11.orate organizat~on tq justify tQe conclusion that Con~ess intended that the income o� the_~~er�rise should be taxed. in the same manner as that of corporations . " (pp. 356-360 ) . (underscoring supplied. ) In a later case (Commissioner of Internal Revenue v. Rector & Davidson, (1940) 11 F. 2d 332), involving the question whether a s,rndicate constituted a partnership or an association within

DECISION - C. T.A . CASE NO . 71 - 12 - the concept of 11corporation� for income tax purposes , the Cir- cuit Court of Appeals sunmarized succinctly the five salient features of a ' corporation ' 11 as contemplated by the Income Tax Law following the Morrissey decision, as follows: "(1) title to the property held by the entity, (2) centralized management, (3) continuity uninter- rupted by deaths among the beneficial 01.mers, (4) transfer of interest without affecting the cont inuity of the enterprise, and (5) limitation of the personal liabil ity of participants. " (p. 333) In another case (Wabash Oil & C~s ~ssociation vs . Commis- sioner of Internal Reven~e (1947) 160 F. 2d Series 658) , the Circuit Court of Appeals, citing the case of l"iorrissey vs. Com- missioner, ~u~~' as authority , held that in determining whether an 11association11 can be properly classified as a 11corporation11 for income tax purposes, the basic problem is whether the salient features of the organism created as the medium for carrying en a business venture raakes it analogous to a conventional corporation. ~ In the light of the doctrine laid down by the United States Supreme Court in the MOrrissey case and the other aforecited cases, it is essential that the entity or association must have substantially the salient features of a corporation to be taxable as a 11corporation11 � Considering that our revenue la\-r is based upon the United States Tax Code , it is clear to us and we so hold, that the real criterion to be appl ied when the question is raised as to whether an association should be taxable as a ncorpof ation11 under the income tax laH, is whether it substantially resembles in purpose, general form and mode of operations an ordinary corp- oration. Applying the above test to the 11Joint Emergency Operation11 or joint management of the petitioners, it will readily be seen

DECISION - I... C. T. A. CASE NO. 71 - 13 - that it does not meet the aforesaid doctrine of resemblance to a corporation form of organization. The outstanding charac- teristics of a conventional corporation are entirely lacking in the . said "Joint Emergency Operation. 11 The title to the pro- perties of the petitioners was never vested in the enterprise , for as a matter of fact , in the findings above, the companies retained mmership and ultimate control of their respective properties. In law or in fact it had no capacity to hold and dispose of property as a unit nor the ability to sue and be sued. While the purpose of the joint emrgency operation \vas for cen- tralized management, there is no provision for the continuity in its life since the withdrawal by or dissolution of the corp- orations involve, would work a termination of its existence, besides the fact that there was no bar to any such withdrawal. It is also significant that there was no stock issued, no pro- vision for succession was agreed upon, and no limitation of per- sonal liability of the petitioners was entered into. Clearly, \ve find that the Joint Em:lrgency Operat ion11 involved in this case is wanting in the essential features of an association and does not quali~ to t he rule of res- enb.lance to a corporate form of organization nor could it be said to be analogous to a �Qnventional corporation. While there may be some �divergence of view as to the mimi- mum features and degree of resemblance sufficient to treat an associatiom taxable as a corporatiQn, we see no necessity to consider this question in the present case because the "Joint Emergency Operation11 involved , does not have the semblance of a corporation in the method, mode and form of procedure in the conduct of its affairs. j3(

DECISION - C. T. A. CASE NO. 71 �'. I - 14 - We believe that to protect the revenues of the government a person vested with the right to receive income should not be allowed to escape the tax due thereon Qy any means which ingenuity may cr~ate , and procures the p~ment thereof to another (Commis- sioner vs. Sunnen (1948) 333 u.s. 591, citing Harrison vs. Schaf- fner , 312 U. S. 579) . However, it is fundamental that in income taxation, the tax should be borne primarily, in the absence of statutory provision to the contrary, by those who earn or other- \dse have the right to receive it and enjoy its benefits when paid. (Helvering vs . Horst (1940) 311 u.s. 112) . Applying these con- cepts here, we find that we cannot see any basis to justify col- lection of the income tax in question. The evidence on record show.sthat the 11Joint Energency Operation11 constituted by the pe- titioners , by which they could economize overhead expenses, had no income of its own, nor had received any benefit . All that the 11Joint Emergency Operation" did was to manage the Batangas Transportation Company and the Laguna Tayabas Bus Company. Al - t hough there are indications to show that it was the recipient of income , the "Joint Emergency Operation11 1-Tas only serving as a conduit or transmitter of such income to the petitioners. If we are to follow the theory of the respondent , it would r esult in the imposition of a tax on income p~able by a person other than the owner of the property or investment from which the in- come is derived. There is no merit in the contention of the respondent that in t he light of the decision of our Supreme Court in the case of Cesar Reyes vs . l'hx Blouse, suRra, the 11Joint Emergency Operation11 of the petitioners is a corporation distinct and separate from the Laguna Tayabas Bus Company and t he Batangas �rransportation Company. That case was brought Qy Cesar Reyes and other minority

DECISION - C.T.A. CASE NO. 71 - 15 - stockholders of the Laguna Tayabas Bus Company against Pax Blouse and other members of the Board of Directors of the corporation to restrain the said board from carrying out a re- solution approved by about 92. 5% of the stockholders in a meet- ing held on July 20, 1947. The said resolution authorized the Board of Directors to take t he necessary steps to consolidate the properties and franchises of Laguna 'I'ayabas Bus Company with those of the Batangas Transportation Company. While the Supreme Court held that the resolution in question did not seek to dissolve the Laguna Tayabas Bus Company but merely to transfer its assets to a new corporation in exchange for its corporate stocks, the evidence on record do not show that the new corp- oration proposed by the resolution had been actually organized. Neither does it appear that 11Joint Emergency Operation11 or joint management of the petitioners is the same corporation or entity proposed. On the contrary, r~ . Joseph Benedict testified that the new corporation contemplated in the r esolution has not yet been organized pending the result of this case (pp. 36-37, t.s . n.) The respondent having failed to introduce proofs to prove his allegation, and there being no reason to doubt the testimony of ~~ . Benedict, we would rather believe that the 11Joint Emergency Operation11 of the petitioners is not a new corporation distinct and separate from t he Laguna. 'l'a.ya.bas Bus Company and the Batanga.s Tra.nsp7ation Company. / 1-le �Te, therefore, of the opinion and so hold that the tlJoint Emergency Operation" or joint management of the peti- tioners Bata.ngas Transportation Company and Laguna. 'I'ayabas Bus Company is not a. corporation within the contemplation of section 84 (b) of the Nat,ional Internal Hevenue Code much less a partner-

D' CISION - C. i . A. CASE NO. 71 - 16 - ship, association or insurance company, and therefore hold t hat the same is not subject to t he i ncome tax under the provisions of section 24 of the same Code , separately and i ndependently from the petitioners. WIIE FORE , the decision of t he r espondent Collector of Internal Revenue asse ss ing and demanding f rom the petitioners the p~ent of the amount of ~54,143 . 54 and/or t he amount of 148, 890.14 is hereby reversed without special pronouncement as to costs. SO ORDERED. Manila, Philippines, August 11, 1955 . I concur: