Beruflich Dokumente
Kultur Dokumente
FACTS:
Algue, Inc. then received an assessment letter from the CIR for the
total amount of P83,183.85 as delinquency income taxes for the
years 1958 and 1959 wherein the former filed a letter of protest or
request for reconsideration, duly received by the office of the
petitioner. However, a warrant of distraint and levy was presented
to the private respondent, through its counsel, Atty. Alberto
Guevara, Jr., who refused to receive it on the ground of the
pending protest. The BIR agent deferred service of the warrant.
Finally, Atty. Guevara was informed that the BIR was not taking any
action on the protest and only then that the former received the
warrant of distraint and levy. However, they filed a petition for
review of the decision of the Commissioner of Internal Revenue
with the Court of Tax Appeals.
ISSUE:
RULING:
The Court ruled that the petition was filed seasonably as an appeal
may be made within thirty days after receipt of the decision or
ruling challenged. This case has a special circumstance since the
warrant of distraint and levy was issued notwithstanding the private
respondents protest over the petitioner’s assessment. Hence, the
warrant was premature and could therefore not be served as there
was no finality yet on the assessment.
However, the Court found that the suspicion was baseless as the
payments were not made in lump sum but periodically and in
different amounts as each payee's need arose. Being a family
corporation, strict business procedures were not applied and
immediate issuance of receipts was not required. Even so, at the
end of the year, each payee made an accounting of all of the fees
received by him or her, totalling P75,000.00.
The court ruled that the promotional fees was not excessive as
Algue still had a balance of P50,000.00 as clear profit from the
transaction.
The Court ruled that the private respondent has proved that the
payment of the fees was necessary and reasonable in light of the
efforts exerted by the payees in inducing investors and prominent
businessmen to venture in an experimental enterprise and involve
themselves in a new business requiring millions of pesos. This was
no mean feat and should be, as it was, sufficiently recompensed.
HELD:
The appeal of the private respondent was filed on time with the
CTA in accordance with Rep. Act No. 1125.
That the claimed deduction by Algue, Inc. was permitted under the
Internal Revenue Code and should therefore not have been
disallowed by the CIR.