Case Digest (G.R. No. L-28896)
Facts:
Commissioner of Internal Revenue v. Algue, Inc., G.R. No. L-28896, February 17, 1988, the Supreme Court First Division, Cruz, J., writing for the Court. The petitioner is the Commissioner of Internal Revenue; the private respondent is Algue, Inc., a domestic corporation engaged in engineering, construction and allied activities; the Court of Tax Appeals (CTA) is the other respondent.
On January 14, 1965 the petitioner sent Algue a notice assessing delinquent income taxes totaling P83,183.85 for 1958–1959. Four days later, on January 18, 1965, Algue filed a written protest/request for reconsideration, which was stamp‑received at the BIR office that same day. Despite the protest, the Collector caused a warrant of distraint and levy to be prepared and on March 12, 1965 attempted to serve it on Algue; Algue’s counsel, Atty. Alberto Guevara, Jr., refused to accept service because of the pending protest. A search by BIR personnel could not locate the protest in its files; counsel produced his file copy and gave a photostat to a BIR agent, who deferred service. On April 7, 1965 counsel was finally informed the BIR had not acted on the protest and then accepted service of the warrant. On April 23, 1965 Algue filed a petition for review with the Court of Tax Appeals.
The Court of Tax Appeals (penned by Associate Judge Estanislao R. Alvarez, concurred by Presiding Judge Ramon M. Umali and Associate Judge Ramon L. Avancena) held that Algue’s protest effectively suspended the reglementary period and that the appeal to the CTA was therefore timely. On the substantive issue the CTA found that Algue properly deducted P75,000 as promotional fees paid to certain persons who procured the formation of the Vegetable Oil Investment Corporation and facilitated that corporation’s purchase of Philippine Sugar Estate Development Company (PSEDC) pr...(Pro-only)
Issues:
- Was Algue’s appeal to the Court of Tax Appeals filed timely and in accordance with law?
- Were the P75,000 in promotional fees deductible as ordinary, necessary and reasonable business expenses under the Tax Code and applicable reven...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)