Roxas v CTA
GR No L-25043, April 26, 1968
FACTS:
Antonio, Eduardo and Jose Roxas, brothers and at the same time partners of the Roxas y Compania, inherited from their grandparents several properties which included farmlands. The tenants expressed their desire to purchase the farmland. The tenants, however, did not have enough funds, so the Roxases agreed to a purchase by installment. Subsequently, the CIR demanded from the brothers the payment of deficiency income taxes resulting from the sale, 100% of the profits derived therefrom was taxed. The brothers protested the assessment but the same was denied. On appeal, the Court of Tax Appeals sustained the assessment. Hence, this petition.
ISSUE:
Is Roxas liable?
RULING:
No. It should be borne in mind that the sale of the farmlands to the very farmers who tilled them for generations was not only in consonance with, but more in obedience to the request and pursuant to the policy of our Government to allocate lands to the landless.
In order to maintain the general public’s trust and confidence in the Government this power must be used justly and not treacherously. It does not conform with the sense of justice for the Government to persuade the taxpayer to lend it a helping hand and later on penalize him for duly answering the urgent call.
In fine, Roxas cannot be considered a real estate dealer and is not liable for 100% of the sale. Pursuant to Section 34 of the Tax Code, the lands sold to the farmers are capital assets and the gain derived from the sale thereof is capital gain, taxable only to the extent of 50%.
GR No L-25043, April 26, 1968
FACTS:
Antonio, Eduardo and Jose Roxas, brothers and at the same time partners of the Roxas y Compania, inherited from their grandparents several properties which included farmlands. The tenants expressed their desire to purchase the farmland. The tenants, however, did not have enough funds, so the Roxases agreed to a purchase by installment. Subsequently, the CIR demanded from the brothers the payment of deficiency income taxes resulting from the sale, 100% of the profits derived therefrom was taxed. The brothers protested the assessment but the same was denied. On appeal, the Court of Tax Appeals sustained the assessment. Hence, this petition.
ISSUE:
Is Roxas liable?
RULING:
No. It should be borne in mind that the sale of the farmlands to the very farmers who tilled them for generations was not only in consonance with, but more in obedience to the request and pursuant to the policy of our Government to allocate lands to the landless.
In order to maintain the general public’s trust and confidence in the Government this power must be used justly and not treacherously. It does not conform with the sense of justice for the Government to persuade the taxpayer to lend it a helping hand and later on penalize him for duly answering the urgent call.
In fine, Roxas cannot be considered a real estate dealer and is not liable for 100% of the sale. Pursuant to Section 34 of the Tax Code, the lands sold to the farmers are capital assets and the gain derived from the sale thereof is capital gain, taxable only to the extent of 50%.
Posts
Hello, Atty.! Your digests helps me a lot right now. I just want you to know that this blog is of great help to a lot of law students out there.
ReplyDelete