Facts:
The petitioner made an assessment of P22,123.55 on respondent. This was made on the networth method, which was based upon an investment in the sum of P60,000 made by Enrique Avelino in the National Livestock Produce Corporation, organized in June 1947. He having filed no income tax return for such year, said amount was considered as his unreported income therefor. Upon the other hand, Enrique Avelino maintained that said sum of P60,000 had been lent to him by a naturalized Filipino, named Severino Sayque, who returned to China in 1948 or 1949 and has not been heard from since then.
Issue:
Whether or not such defense of respondent has been sufficiently established
Ruling:
No.In the present case, the prima facie correctness of the assessment in question is bolstered up by the undisputed fact that Enrique Avelino had invested P60,000 in the National Livestock Produce Corporation in 1947. It was, therefore, incumbent upon him to establish that said sum had been merely borrowed by him. His evidence thereon is, however, far from satisfactory.
Another reason relied upon by the Court of Tax Appeals in reversing the decision of the Commissioner of Internal Revenue is that, in making the questioned assessment, the latter had failed to establish either the opening net worth of Enrique Avelino in 1947 or the source of the income in question (P60,000.00). However, Avelino's net worth at the beginning of 1947 was nil, for it is an undisputed fact that he then had no money or property of any kind whatsoever. Besides, we have already ruled that:
“In civil cases, as the one at bar, it has been held that the application of the net worth method does not require identification of the sources of the alleged unreported income and that the determination of the tax deficiency by the government is prima facie correct. (Eugenio Perez v. CIR, G.R. No. L-10507, May 30, 1958.)”
The petitioner made an assessment of P22,123.55 on respondent. This was made on the networth method, which was based upon an investment in the sum of P60,000 made by Enrique Avelino in the National Livestock Produce Corporation, organized in June 1947. He having filed no income tax return for such year, said amount was considered as his unreported income therefor. Upon the other hand, Enrique Avelino maintained that said sum of P60,000 had been lent to him by a naturalized Filipino, named Severino Sayque, who returned to China in 1948 or 1949 and has not been heard from since then.
Issue:
Whether or not such defense of respondent has been sufficiently established
Ruling:
No.In the present case, the prima facie correctness of the assessment in question is bolstered up by the undisputed fact that Enrique Avelino had invested P60,000 in the National Livestock Produce Corporation in 1947. It was, therefore, incumbent upon him to establish that said sum had been merely borrowed by him. His evidence thereon is, however, far from satisfactory.
Another reason relied upon by the Court of Tax Appeals in reversing the decision of the Commissioner of Internal Revenue is that, in making the questioned assessment, the latter had failed to establish either the opening net worth of Enrique Avelino in 1947 or the source of the income in question (P60,000.00). However, Avelino's net worth at the beginning of 1947 was nil, for it is an undisputed fact that he then had no money or property of any kind whatsoever. Besides, we have already ruled that:
“In civil cases, as the one at bar, it has been held that the application of the net worth method does not require identification of the sources of the alleged unreported income and that the determination of the tax deficiency by the government is prima facie correct. (Eugenio Perez v. CIR, G.R. No. L-10507, May 30, 1958.)”
Posts
No comments:
Post a Comment