Escolar Documentos
Profissional Documentos
Cultura Documentos
HELD:
NO. The assessment against Respondent has not become final and not
appealable. It cannot be said that respondent failed to submit relevant
supporting documents that would render the assessment final because
when respondent submitted its protest, respondent attached all the
documents it felt were necessary to support its claim. Further, CIR
cannot insist on the submission of proof of DST payment because such
document does not exist as respondent claims that it is not liable to
pay, and has not paid, the DST on the deposit on subscription.
The term "relevant supporting documents" are those documents
necessary to support the legal basis in disputing a tax assessment as
determined by the taxpayer. The BIR can only inform the taxpayer to
submit additional documents and cannot demand what type of
supporting documents should be submitted. Otherwise, a taxpayer will
be at the mercy of the BIR, which may require the production of
documents that a taxpayer cannot submit. Since the taxpayer is
deemed to have submitted all supporting documents at the time of
filing of its protest, the 180-day period likewise started to run on that
same date.
3.) Commission on Internal Revenue v Filinvest Development
Corporation
Facts:
Filinvest Development Corporation (FDC) is a holding company owned
67.42% of the outstanding shares of Filinvest Land, Inc. (FLI). It is also
the owner of 80% of the outstanding shares of respondent Filinvest
Alabang, Inc. (FAI). On 29 November 1996, FDC and FAI entered into a
Deed of Exchange with FLI whereby the former both transferred in
favor of the latter parcels of land appraised at P4,306,777,000.00. In
exchange for said parcels which were intended to facilitate
development of medium-rise residential and commercial buildings,
463,094,301 shares of stock of FLI were issued to FDC and FAI.Filinvest
Development Corporation extended advances in favor of its affiliates
and supported the same with instructional letters and cash and journal
vouchers. The BIR assessed Filinvest for deficiency income tax by
imputing an arms length interest rate on its advances to affiliates.
Filinvest disputed this by saying that the CIR lacks the authority to
impute theoretical interest and that the rule is that interests cannot be
demanded in the absence of a stipulation to the effect.
On 13 January 1997, FLI requested a ruling from the Bureau of Internal
Revenue (BIR) to the effect that no gain or loss should be recognized in
the aforesaid transfer of real properties. The BIR issued Ruling No. S34-046-97 after finding that the exchange is among those
contemplated under Section 34 (c) of the old National Internal Revenue
Code (NIRC) which provides that no gain or loss shall be recognized if
property is transferred to a corporation by a person in exchange for a
stock in such corporation of which as a result of such exchange said
person, alone or together with others, not exceeding four persons,
gains control of said corporation."
ISSUE:
Whether or not the CIR may impute theoretical interest on the
advances made by Filinvest to its affiliates?
HELD:
NO. Despite the seemingly broad power of the CIR to distribute,
apportion and allocate gross income under (now) Section 50 of the Tax
Code, the same does not include the power to impute theoretical
interests even with regard to controlled taxpayers transactions. This is
true even if the CIR is able to prove that interest expense (on its own
loans) was in fact claimed by the lending entity. The term in the
definition of gross income that even those income from whatever
source derived is covered still requires that there must be actual or at
least probable receipt or realization of the item of gross income sought
to be apportioned, distributed, or allocated. Finally, the rule under the
Civil Code that no interest shall be due unless expressly stipulated in
writing was also applied in this case.
The Court also ruled that the instructional letters, cash and journal
vouchers qualify as loan agreements that are subject to DST
4.) Commission on Internal Revenue v Manila Bankers Life
Insurance Corporation
Facts:
Herein respondent is a duly organized domestic corporation primarily
engaged in the life business insurance. On May 28, 1999, petitioner
Commissioner of Internal Revenue issued Letter of Authority No.
000020705 authorizing a special team of Revenue Officers to examine
the books of accounts and other accounting records of respondent for
taxable year "1997 & unverified prior years."