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CIR v. Algue, Inc., G.R. No. L-28896

The document summarizes the CIR v. Algue, Inc. case from 1988 regarding the doctrine of symbiotic relationship between taxpayers and the government. It discusses that Algue, a construction company, received an assessment for delinquent income taxes from 1958-1959 totaling P83,183.85. Algue filed a protest that could not be found. The CIR later refused to consider the protest and issued a warrant, though it was deferred until the protest was deemed insufficient. Algue then appealed to the Court of Tax Appeals. The court held that Algue adequately proved the validity of its claimed tax deduction. The conclusion discusses that taxes are paid for civilization and society, and that the government and taxpayers have a symbiotic

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6K views1 page

CIR v. Algue, Inc., G.R. No. L-28896

The document summarizes the CIR v. Algue, Inc. case from 1988 regarding the doctrine of symbiotic relationship between taxpayers and the government. It discusses that Algue, a construction company, received an assessment for delinquent income taxes from 1958-1959 totaling P83,183.85. Algue filed a protest that could not be found. The CIR later refused to consider the protest and issued a warrant, though it was deferred until the protest was deemed insufficient. Algue then appealed to the Court of Tax Appeals. The court held that Algue adequately proved the validity of its claimed tax deduction. The conclusion discusses that taxes are paid for civilization and society, and that the government and taxpayers have a symbiotic

Uploaded by

fay garneth buscato
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CIR v. Algue, Inc., G.R. No.

L-28896, February 17, 1988, 158 SCRA 9) – doctrine of symbiotic relationship


Entong, Jen

FACTS:

The private respondent, a domestic corporation engaged in engineering, construction and other
allied activities, received a letter from the petitioner assessing it in the total amount of P83, 183.85 as
delinquency income taxes for the years 1958 and 1959. Algue flied a letter of protest or request
for reconsideration, which letter was stamp received on the same day in the office of the petitioner. On
March 12, 1965, a warrant of distraint and levy was presented to the private respondent, through its
counsel, Atty. Alberto Guevara, Jr., who refused to receive it on the ground of the pending protest.

A search of the protest in the dockets of the case proved fruitless. Atty. Guevara produced his file copy
and gave a photostat to BIR agent Ramon Reyes, who deferred service of the warrant. On April 7, 1965,
Atty. Guevara was finally informed that the BIR was not taking any action on the protest and it was
only then that he accepted the warrant of distraint and levy earlier sought to be served. Sixteen
days later, on April 23, 1965, Algue filed a petition for review of the decision of the Commissioner of
Internal Revenue with the Court of Tax Appeals.

ISSUE: Whether or not the CIR correctly disallowed the P75,000.00 deduction claimed by private
respondent Algue as legitimate business expenses in its income tax returns

HELD: NO. The burden is on the taxpayer to prove the validity of the claimed deduction. In the present
case, however, we find that the onus has been discharged satisfactorily. The private respondent 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. This was no mean feat and should
be, as it was, sufficiently recompensed.

It is said that taxes are what we pay for civilization society. Without taxes, the government would be
paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural reluctance
to surrender part of one's hard earned income to the taxing authorities, every person who is able to
must contribute his share in the running of the government. 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. This symbiotic relationship is the rationale of taxation and
should dispel the erroneous notion that it is an arbitrary method of exaction by those in the seat of
power.

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