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    The Commissioner of Internal Revenue appealed a decision by the Court of Tax Appeals (CTA) that ruled Philippine American Accident Insurance Company was not subject to a 3% tax on lending investors. The CTA determined, and the Court of Appeals affirmed, that the company's lending transactions were part of its insurance business and therefore not taxable independently. The Supreme Court held that findings of fact by the CTA, especially when affirmed by the Court of Appeals, are generally conclusive unless there is a grave abuse of discretion or clear error, which were not present in this case.

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    CIR v. PhilAm

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    The Commissioner of Internal Revenue appealed a decision by the Court of Tax Appeals (CTA) that ruled Philippine American Accident Insurance Company was not subject to a 3% tax on lending investors. The CTA determined, and the Court of Appeals affirmed, that the company's lending transactions were part of its insurance business and therefore not taxable independently. The Supreme Court held that findings of fact by the CTA, especially when affirmed by the Court of Appeals, are generally conclusive unless there is a grave abuse of discretion or clear error, which were not present in this case.

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    12 views1 page

    Facts:: BASIS: Delegation of Powers

    Uploaded by

    rb
    The Commissioner of Internal Revenue appealed a decision by the Court of Tax Appeals (CTA) that ruled Philippine American Accident Insurance Company was not subject to a 3% tax on lending investors. The CTA determined, and the Court of Appeals affirmed, that the company's lending transactions were part of its insurance business and therefore not taxable independently. The Supreme Court held that findings of fact by the CTA, especially when affirmed by the Court of Appeals, are generally conclusive unless there is a grave abuse of discretion or clear error, which were not present in this case.

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    © All Rights Reserved
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    Commissioner of Internal Revenue

    vs
    Philippine American Accident Insurance Company, Inc.
    GR No. 141658 March 18, 2005

    Facts:
     Philam Accident Insurance (respondent) is a domestic corporation licensed to transact
    INSURANCE business in the country.
     Respondents paid the BIR under protest the 3% tax imposed on lending investors
     Respondent sent a letter-claim to CIR seeking a refund of the said taxes they paid
    contending that they were not lending investors and as such were not subject to the 3%
    lending investors’ tax under section 195-a.
     CTA ruled that respondents were not taxable on their lending transactions independently
    of their insurance business and were entitled to their refund.
     CTA ruled that respondents were not taxable on their lending transactions independently
    of their insurance business and were entitled to their refund. The term "money lenders" was
    later changed to "lending investors" but the definition of the term remains the same.
     CIR appealed to CA. CA affirmed CTA’s decision and ruled that respondents are not
    taxable as lending investors

    Issue: Whether or not the findings of fact of the Court of Tax Appeals (CTA), particularly when
    affirmed by the Court of Appeals, are generally conclusive on the SC.

    Held: YES. Dedicated exclusively to the study and consideration of tax problems, the CTA has
    necessarily developed an expertise in the subject of taxation that this Court has recognized time
    and again. For this reason, the findings of fact of the CTA, particularly when affirmed by the Court
    of Appeals, are generally conclusive on this Court absent grave abuse of discretion or palpable
    error, which are not present in this case.

    BASIS: delegation of powers

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