Commissioner v. BOAC
[149 SCRA 395]: Income means “
cashreceived or its equivalent.”
It is the amount of money coming to a person within a specifictime. It is distinct from capital for, while the latter is a fund, income is a flow. As used inour laws, income is flow of wealth. The source of an income is the property, activity orservice that produces the income. For the source of income to be considered as coming fromthe Philippines, it is sufficient that income is derived from activity within the Philippines. INBOAC’s case, the sale of tickets in the Philippines is the activity that produces the income.
Fisher v. Trinidad
[43 Phil 973]: Stock dividend is not an income. Itmerely evidences the interest of the stockholder in the increased capital of the corporation.An income may be defined as the amount of money coming to a person or corporationwithin a specified time, whether as payment for services, interest, or profit for investment. Amere advance in the value of property of a person or corporation in no sense constitutes the“
specified in the revenue law. Such advance constitutes and can be treated merelyas an increase of capital. An income means cash received or its equivalent. It does not meanchoses in action or unrealized increments in the value of the property.
Income v. capital
Capital is a fund or property existing at one distinct point of time whileincome denotes a flow of wealth during a definite period of time.
The essential difference between capital and income is that capital is afund or property existing at one distinct point of time; income is a flow of services renderedby that capital by the payment of money from it or any other benefit rendered by a fund ofcapital in relation to such fund through a period of time. Capital is wealth, income is theservice of wealth. [
Madrigal v. Rafferty
, 38 Phil 414]
Capital is the tree while income is the fruit.
Sources of Income
What produces income?
The term “
source of income”
is not a place but the property, activity orservice that produced the income. In the case of income derived from labor, it is the placewhere the labor is performed; in the case of income derived from the use of capital, it is theplace where the capital is employed; and in the case of profits from the sale or exchange ofcapital assets, it is the place where the sale or transaction occurs.