Professional Documents
Culture Documents
SUPREME COURT
Manila
EN BANC
G.R. No. L-21570
Zamora, Nos. L-15280, L-15290, L-15289 and L15281, May 31, 1963), the foregoing error is devoid
of merit.
Wherefore, the appealed decision should be, as it
is hereby, affirmed. With costs against petitionerappellant, Limpan Investment Corporation.
Concepcion, C.J., Barrera, Dizon, Regala,
Makalintal, Bengzon, J.P., Zaldivar, Sanchez and
Castro, JJ., concur.
Income Tax in General
FACTS:
BIR assessed deficiency taxes on Limpan Corp, a
company that leases real property, for underdeclaring its rental income for years 1956-57 by
around P20K and P81K respectively.
Petitioner appeals on the ground that portions
of these underdeclared rents are yet to be
collected by the previous owners and turned over
or received by the corporation.
Petitioner cited that some rents were deposited
with the court, such that the corporation does not
have actual nor constructive control over them.
The sole witness for the petitioner, Solis
(Corporate Secretary- Treasurer) admitted to
some undeclared rents in 1956 and1957, and that
some balances were not collected by the
corporation in 1956 because the lessees refused to
recognize and pay rent to the new owners and
that the corps president Isabelo Lim collected
some rent and reported it in his personal income
statement, but did not turn over the rent to the
corporation.
He also cites lack of actual or constructive
control over rents deposited with the court.
ISSUE: Whether or not the BIR was correct in
assessing deficiency taxes against Limpan Corp.
for undeclared rental income
HELD: Yes. Petitioner admitted that it indeed had
undeclared income (although only a part and not
the full amount assessed by BIR). Thus, it has
become incumbent upon them to prove their
excuses by clear and convincing evidence, which it
has failed to do. When is there constructive
receipt of rent? With regard to 1957 rents
deposited with the court, and withdrawn only in
1958, the court viewed the corporation as having
constructively received said rents. The noncollection was the petitioners fault since it
refused to refused to accept the rent, and not due
to nonpayment of lessees. Hence, although the
corporation did not actually receive the rent, it is
deemed to have constructively received them.
Deductions Depreciation
FACTS: Petitioner is a domestic corporation
engaged in the business of leasing real properties.