Scribd
Upload
120 views1 page

CIR v. Algue, Inc., G.R. No. L-28896, February 17, 1988

The CIR assessed Algue Inc. for delinquent income taxes from 1958-1959 totaling P83,183.85. Algue filed a protest which was not acted upon. In 1965, the CIR served a warrant to Algue which was refused until the protest was deemed not taken. Algue then appealed to the Court of Tax Appeals. The court ruled in favor of Algue, finding the P75,000 business expense deduction valid as the fees paid were necessary and reasonable for the experimental business venture. The court discussed that taxes are required for a functioning government and citizens have a duty to contribute through taxation.

Uploaded by

fay garneth buscato
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
120 views1 page

CIR v. Algue, Inc., G.R. No. L-28896, February 17, 1988

The CIR assessed Algue Inc. for delinquent income taxes from 1958-1959 totaling P83,183.85. Algue filed a protest which was not acted upon. In 1965, the CIR served a warrant to Algue which was refused until the protest was deemed not taken. Algue then appealed to the Court of Tax Appeals. The court ruled in favor of Algue, finding the P75,000 business expense deduction valid as the fees paid were necessary and reasonable for the experimental business venture. The court discussed that taxes are required for a functioning government and citizens have a duty to contribute through taxation.

Uploaded by

fay garneth buscato
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

    (CIR v. Algue, Inc., G.R. No.

L-28896, February 17, 1988, 158 SCRA 9) –

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.

You might also like