Module 1

CIR v Algue

RA 1125: the appeal may be made within thirty days after receipt of the decision or ruling
challenged. The burden is on the taxpayer to prove the validity of the claimed deduction. In
this case, Algue Inc. has proved that the payment of the fees was necessary and reasonable in
the 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. Taxation must be exercised reasonably and in
accordance with the prescribed procedure. If it is not, then the taxpayer has a right to
complain and the courts will then come to his succor.