Limpan Investment Corporation vs Commission on

Internal Revenue
Limpan Investment Corporation is engaged in the business of
leasing real properties. The real properties consist of houses and
buildings located in Manila and Pasay. Corporation has duly
filed its income tax returns 1956 and 1957 reporting net income
of Php 3,287 and Php 11,098 respectively which it paid
corresponding taxes of Php 657 and Php 2,200.
In 1958 and 1959 BIR conducted an investigation and found out
that said tax returns for the mentioned years have not been paid
and that it had undeclared rental incomes of Php 20k and Php
801 during the said taxable years and had declared excessive
depreciation of the buildings totaling to Php 20 k. CIR then
demanded payment of said tax.

According to sole witness for the corporation Vicente Solis

admitted that he had failed to report the sum of Php 12k as
rental income during 1956 and the amount of Php 29k during
1957. The Commissioner then established that it did not collect
nor receive such amount through the same witness.
ISSUE: Whether or not there was an undeclared income
HELD:
Yes. Petitioner having admitted that it has undeclared income
through its witness was considered as unreported income by the
court. Supreme Court claimed that it was incumbent upon it to
establish the remainder of its pretensions by velar and
convincing evidence which as mentioned in the case was lacking.