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Commissioner v. Algue

Commissioner v. Algue

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Published by: juanbago on Jul 19, 2012
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06/17/2014

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Commissioner v.

Algue GRL-28890, 17 February 1988 Facts: The Philippine Sugar Estate Development Company (PSEDC) appointed Algue Inc. as its agent, authorizing it to sell its land, factories, and oil manufacturing process. The Vegetable Oil Investment Corporation (VOICP) purchased PSEDC properties. For the sale, Algue received a commission of P125,000 and it was from this commission that it paid Guevara, et. al. organizers of the VOICP, P75,000 in promotional fees. In 1965, Algue received an assessment from the Commissioner of Internal Revenue in the amount of P83,183.85 as delinquency income tax for years 1958 amd 1959. Algue filed a protest or request for reconsideration which was not acted upon by the Bureau of Internal Revenue (BIR). The counsel for Algue had to accept the warrant of distrant and levy. Algue, however, filed a petition for review with the Court of Tax Appeals. Issue: Whether the assessment was reasonable. Held: Taxes are the lifeblood of the government and so should be collected without unnecessary hindrance. Every person who is able to pay must contribute his share in the running of the government. The Government, for his part, is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that is an arbitrary method of exaction by those in the seat of power. Tax collection, however, should be made in accordance with law as any arbitrariness will negate the very reason for government itself. For all the awesome power of the tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate that the law has not been observed. Herein, the claimed deduction (pursuant to Section 30 [a] [1] of the Tax Code and Section 70 [1] of Revenue Regulation 2: as to compensation for personal services) had been legitimately by Algue Inc. It has further proven that the payment of fees was reasonable and necessary in light of the efforts exerted by the payees in inducing investors (in VOICP) to involve themselves in an experimental enterprise or a business requiring millions of pesos. The assessment was not reasonable. Sulaw

TAXATION
Commissioner vs. Algue 158 SCRA 9 Facts: The Philippine Sugar Estate Development Company (PSEDC). Appointed Algue Inc. as its’ agent. Algue received a commission of ₱ 125,000.00 and it was from their commission that it

.00 in proportional fees. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that is an arbitrary method of exaction by those in the seat of power.paid organizers of VOICP ₱75. On the other hand. taxes are the lifeblood of the government and should be collected without unnecessary hindrance. Issue: Is the CIR correct? Ruling: No. Every person who is able to pay must contribute his share in the running of the government. such collection should be made in accordance with law as any arbitrariness will negate the very reason for government itself. He filed a letter of protest or reconsideration. reasonable or necessary expense.000. The CIR contends that the claimed deduction was properly disallowed because it was not an ordinary. The government for its’ part is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. He received an assessment from the CIR.

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