CASE DIGESTS (Taxation I) Vectigalia nervi sunt rei publicae - taxes are the sinews of the state.

CIR v Algue (1988) Facts: 1. Jan 14, 65: resp corp who is engaged in engineering and construction business received from pet CIR a letter assessing an P83K income tax deficiency from 1958-59 2. Jan 18, 65: resp filed a letter of protest/request for reconsideration, stamped and received in the office of pet on the same day 3. Mar 12, 65: a warrant of distraint and levy was presented to resp through its counsel, At ty. Albert Guevara, Jr. Who refused it on the ground of pending protest 4. Protest was not found in the docket of the case so Atty. Guevara produced his own copy and gave a photostat to Ramon Reyes, BIR agent who deferred service of warrant 5. Apr 7, 65: Atty. Guevara was informed that the BIR is not taking any action on the protest and it was only then that he accepted the warrant 6. After 16 days, resp filed a petition for review on the decision of CIR w/CTA Issues: 1. W/N pet correctly disallowed the 75K-deduction as legitimate business expenses in its income tax returns claimed by resp 2. W/N the appeal of the private respondent from the decision of the Collector of Internal Revenue was made on time and in accordance with law Ruling: 1. NO a. The 75K should be deducted as ordinary and necessary expenses which were paid to Alberto Guevara, Jr., Eduardo Guevara, Isabel Guevara, Edith, O'Farell, and Pablo Sanchez for their services to Algue in one of its buss venture with Philippine Sugar Estate Development Company. PSEDC appointed resp as its agent authorizing it to sell its land, factories and oil manufacturing process. The persons mentioned worked for the formation of of the Vegetable Oil Investment Corporation, inducing other persons to invest in it. The VOIC later on purchased the PSEDC properties for w/c the latter gave 125K to resp as commission. 75K of this amount was given to the persons mentioned as promotional fees. b. Under the Tax Code, the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for personal services actually rendered; should be a reduction from gross income. 2. YES a. As a rule the warrant of distraint and levy is "proof of the finality of the assessment" and renders hopeless a request for reconsideration," being "tantamount to an outright denial thereof and makes the said request deemed rejected." b. But there is a special circumstance in the case that prevents the application of the abovementioned rule: four days before the warrant was served, a letter of protest was sent by resp to the tax authorities. During the intervening period, the warrant cannot was premature and cannot be served c. protest was pro forma and is based on strong legal considerations and thus should suspend the running of the reglemantary period w/c started on the date resp received the assessment. It only started to run again when resp was served with the warrant upon being informed that the BIR rejected the protest

CIR v Pineda (1967) Facts: 1945: Atanasio Pineda died, survived by wife , Felicisima Bagtas and 15 children, one is Manuel Pineda,a lawyer 2. Estate proceedings were had and Felicisima was the administratix of the prop. 3. Resp Manuels share was 2,500 4. After estate proceedings, BIR went investigated the income tax liability of the estate from 1945-48 since the corresponding income tax returns were not filed. 5. Collector of BIR filed said returns for the estate based on the estate proceedings amounting to P2,928 6. Resp who received the assessment contested the same, appealing before the CTA only the proportionate part pertaining to him as his share in the estate 7. CTA reversed the decision of the Commissioner the ground that his right to assess and collect the tax has prescribed. 8. Pet CIR appealled to SC aand the latter firmed the findings of the CTA w/respect to 1947 income tax bec it waas filed in 1948 so the right to assess it has prescribed, being beyond the five-year period 9. However, the 1945, 46 returns were filed only on 1953 and the action to collect tax was filed in 1957 (w/in the 5-year period). Right to assess has not prescribed 10. Court remanded the case to Tax Court for further proceedings 11. CTAs decision: resp Pineda was held liable for the payment of 1945 -47 deficiency corresponding to his share 12. Tax Court went to SC to hold resp liable not only to the amount of his share but to the whole amount of deficiency Issue: 1. W//N resp may be liable for the whole deficiency Ruling 1. 1.

YES a. As a holder of property belonging to the estate, Pineda is liable for the tax up to the amount of the property in his possession. Govt has a lien on the 2500 he received as inheritance for unpaid taxes for w/c the estate is liable Sec 315, last par of Tax Code: If any person, corporation, partnership, joint-account (cuenta en participacion), association, or insurance company liable to pay the income tax, neglects or refuses to pay the same after demand, the amount shall be a lien in favor of the Government of the Philippines from the time when the assessment was made by the Commissioner of Internal Revenue until paid with interest, penalties, and costs that may accrue in addition thereto upon all property and rights to property belonging to the taxpayer The govt has two remedies in collecting the tax in question: 1 is to go after all the heirs and collect from each one of them the tax due based on their proportionate share in the inheritance. 2 is to subject the property of the estate wc is in the hands of an heir to the payment o the tax due nd the heir will have the right of contribution from all the other heirs. . The Bureau of Internal Revenue should be given, in instances like the case at bar, the necessary discretion to avail itself of the most expeditious way to collect the tax because taxes are the lifeblood of government and their prompt and certain availability is an imperious need.

b.

c.

d.

Vera v Fernandez Facts: 1. The Motion for allowance of claim and for payment of taxes dated May 28, 1969 was filed on June 3, 1969 in a special proceedings for the indebtedness to the govt of Luis D Tongoy or income tax deficiency of P3,254 2. Resp administrator of the estate Tongoy opposed on the ground that it was barred under Sec 5 rule 86 of the RoC 3. Resp judge dismissed the motion for allowance of claim by Regl Dir of BIR 4. MR filed, denied Issues: 1. W/N claim was filed beyond the period provided for by Sec 2, Rule 86 o RoC 2. W/N claim for taxes by the govt was barred by Sec 5, Rule 86 Ruling: 1. NO Under said rule, court shall state the time w/in w/c filing of claims on the estate of a person may be had. But a creditor, upon his application, may also file a claim anytime before the order of distribution is issued if a cause is shown or under equitable terms b. Pet filed a claim before the order of distribution is entered. It should have been granted by the court specially considering that it was for allowance Of claim for taxes due from the estate, which in effect represents a claim of the people at large Said rule refers to claims for money against the decedent, arising from contracts, express or implied, whether the same be due, not due, or contingent, all claims for funeral expenses and expenses for the last sickness of the decedent, and judgment for money against the decedent. No mention was made on monetary obli create by law such as taxes. Expressio unius est exclusio alterius, the mention of one thing implies the exclusion of another thing not mentioned. Thus, if a statute enumerates the things upon which it is to operate, everything else must necessarily, and by implication be excluded from its operation and effect. The reason for the more liberal treatment of claims for taxes against a decedent's estate in the form of exception from the application of the statute of non-claims, is not hard to find. Taxes are the lifeblood of the Government and their prompt and certain availability are imperious need. Upon taxation depends the Government ability to serve the people for whose benefit taxes are collected. To safeguard such interest, neglect or omission of government officials entrusted with the collection of taxes should not be allowed to bring harm or detriment to the people. This is the philosophy behind the government's exception, as a general rule, from the operation of the principle of estoppel. a.

2.

CIR v CTA Facts: 1. Resp Mla Golf Club maintains a golf course and operates a clubhouse w/lounge, bar and dining room exclusively for its members and it charges on a cost-plus-expense basis. 2. It claims exemption from privilege taxes were it not for the last paragraph of Section 191-A of the Omnibus Tax Law: Where the establishments are operated or maintained by clubs of any kind or nature (irrespective of the disposition of their net income and whether or not they cater exclusively to members or their guests) the keepers of the establishments shall pay the corresponding tax at the rate fixed above . 3. Percentage tax was also assessed on its business. 4. Resp protested claiming it has no basis since Pres. Marcos vetoed Sec 42 of House Bill No. 17839, which carries that proviso on caterers tax. 5. The protestation of the club was denied by the petitioner who maintains that Section 42 was not entirely vetoed but merely the words "hotels, motels, resthouses" on the ground that it might restrain the development of hotels which is essential to the tourism industry. 6. CTA, however, asserts the President cannot veto a part of an item of the bill. It has to be the whole item. Meaning, the whole paragraph. Issues: 1. W/N resp is exempted from the 20% caterers tax 2. W/N the Press veto was valid Ruling: 1. Resp is not exempted from payment off such taax bec the veto was only for the hotels, motels, resthouses, not clubs 2. Veto was valid bec Pres vetoed only certain items on the bill and when we say item, it doesnt mean section, but kind of tax

Davao Lumber v CIR, CA Facts: 1. Pet is a licensed forest concessionaire possessing a Timber License Agreement granted by the Ministry of Natural Resources 2. purchased, from various oil companies, refined and manufactured mineral oils as well as motor and diesel fuels, which it used exclusively for the exploitation and operation of its forest concession. 3. Specific taxes are paaid by said companies under Secs 153-156 of the NIRC w/c aare shouldered by consumers when they purchase from these companies 4. On 198, pet file for a claim of refudd beffore the resp CIR representingg 25% of specific taxes actually paid on fuels aand oils. Claim based on Insular Lumber Co. vs. Court of Tax Appeals and Section 5 of RA 1435: whenever any oils mentioned above are used by miners or forest concessionaires in their operations, twenty-five per centum of the specific tax paid thereon shall be refunded by the Collector of Internal Revenue upon submission of proof of actual use of oils 5. Pet followed procedure on refund 6. Pet filed a review t the CTA where it rued for a partiall refund off specific taxes a. Claim on lubricating oil and other manufaactured oilld had pprescribed b. Some were disallowed bec not inclluded in the origg claaim with CIR c. Other purchases, refund based on rates paaid under RA 1435 not on higher rates actually paid 7. pet, believing that increased rate of Sec 153-156 should be used, pet went to CA for review but CA affirmed CTAA Issues: 1. Whether or not petitioner is entitled under Republic Act No. 1435 to the refund of 25% of the amount of specific taxes it actually paid on various refined and manufactured mineral oils and other oil products taxed under Sec. 153 and Sec. 156 of the 1977 2. W//N refund should be based on the increased rates of specific taxes which it actually paid, as prescribed in Sections 153 and 156 of the NIRC Ruling: 1. YES a. b. petitioner is entitled to a partial refund under Section 5 of RA 1435, which was enacted to provide means for increasing the Highway Special Fund. The specific taxes collected on gasoline and fuel accrue to the Fund, which is to be used for the construction and maintenance of the highway system. But bec mining and lumber concessionaries dont use natl hways so much, they dont directly benefit from it so taaax refund is a relief for them Since the partial refund authorized under Section 5, R.A. 1435, is in the nature of a tax exemption, it must be construed strictissimi juris against the grantee A tax cannot be imposed unless it is supported by the clear and express language of a statute. We have carefully scrutinized RA 1435 and the subsequent pertinent statutes and found no expression of a legislative will authorizing a refund based on the higher rates claimed by petitioner. there is no tax exemption solely on the ground of equity

2.

NO a. b.

c.

Marcos v CA Facts: 1. pres Marcos died in Sept 1989 I Honolulu, Hawaii. 2. In 1990, a Special Tax Audit Team was created to conduct examinatinos and investigations off tax liabilities of the pres, ffamily and cronies. 3. A memorandum was issued concluding its investigation, finding that the family failed to file a written notice of the decedents death, estate tax returns aand several income tax returns for 1982 -86, in violation of the NIRC. Crim charges were filed vs Imelda 4. CIR caused the filing of estate tax return and income tax returns of Marcos spouses and that of pet. Deficiency estate and income tax were issued by the CIR. 5. CIR contends notices were personally and constructuvely served to pet and Imelda. 6. Deficiency tax were not protested by Imelda and other heirs of Pres. w/in 30 days from service of assessments. Notices on levy of real prop were also issued by the BIR Com 7. Counsel for pet requested the BIR Comm to send copies of notices affecting the interest of Pres and his client 8. Notices of sale of pub auction of real property posted. No bidders, forfeited for the govt 9. Ferdinand R. Marcos II, the eldest son of the decedent, questions the actuations of the respondent Commissioner of Internal Revenue in assessing, and collecting through the summary remedy of Levy on Real Properties, estate and income tax delinquencies upon the estate and properties of his father, despite the pendency of the proceedings on probate of the will of the late president 10. He posits that while there is a probate proceedings on the estate of the deceased, only the probate court may decide w/n to grant even the claim for taxes presented by the govt. 11. Pet filed a pet for certiorari with writ of preliminary injunction and TRO before CA seeking to annul and set aside notices of levy on real property issued by CIR, notices of sale and to enjoin Head Revenue Executive Assistant Director II from proceeding with auction of real properties covered by Notices of sale 12. CA: the deficiecy assessment of the estate of the late Pres has become final and unappealable thus the CIR may enforce it by resorting to the summary remeddy of levying the prop. BIR: that the state's authority to collect internal revenue taxes is paramount. Thus, the pendency of probate proceedings over the estate of the deceased does not preclude the assessment and collection, through summary remedies, of estate taxes over the same. Issue: 1. 2.

W/N the actions taken by the CIR to collect the deficiencies of the late Pres were lawful W/N the BIR has the authority to collect by summary remedy tax deficiencies of the deceased w/o cognition and authority of the probate court

Ruling: 1. YES a. b. c. d. e. The powers to assess and collect taxes was delegated to the BIR by Congress under Sec. 3 of the NIRC. It is therefore executive in character There is aa liberal treatment of internal revenue taxes in previous Court rulings. Probate court was allowed to make direct payment of taxes upon showing of assessment Tax def may be collected even after distribution of shares of inheritance to the heirs. Govts 2 ways of collecting taxes It can be shown that approval from probate court is not a manadatory req for collection of taxes

f. g. h.

There is even aa provision in the NIRC prohibiting probate court from distributing share to heirs w/o certification from the CIR The proper admin avenues to protest assessment is request ffor reinves or reconsid w/in 30 days from receipt of assessment Notices of Levy were served w/in the prescription period, under Art 223 of the NIRC, failure to file a return authorizes BIR to assess it and collect w/I 3 years following the assessment of tax

Reyes v Almanzor Facts: 1. Pets are owners of parcels of land leased and occupied as dwelling by tenants who pay retals not more than 300 pesos. 2. RA 6359 was enacted prohibiting landlords from raising rental fees on dwelling units where rentals dont exceed 300 one year from its effectivity, allowig them not more than 10% increase thereafter and suspending pr 1 of Art 1673 of the CC isallowing ejectment of lessees upon expiration of the usual period of lease 3. PD 20 was issued suspending the provision indefinitely except leases with a definite period and absolutely prohibiting increase of rentals when amt does not exceed 300 4. City Assessor of Mla reclassifies and reassessed the value o prop w/c entaailled increase in tax rates. Respondents opted instead for the "Comparable Sales Approach" on the ground that the value estimate of the properties predicated upon prices paid in actual, market transactions would be a uniform and a more credible standards to use especially in case of mass appraisal of properties 5. Memorandum of Disagreement with the Board of Tax Assessment Appeals was filed by pets averring that they are excessive for being more than the income they earn annually from the props. Shouldve been income approach, not sales approach used in assessment 6. The Board, however, upheld the validity of assessment. 7. Appealled to Central Board of Assessment Appeals but it affirmed the earlier assessment on 3 lots but reduced by 20% that of 3 lots 8. MR denied Issue: W/N Comparable Sales Approach was the correct method of assessing the value of the prop Ruling: It has been stressed that the assessors, in finding the value of the property, have to consider all the circumstances and elements of value and must exercise a prudent discretion in reaching conclusions. Under Art. VIII, Sec. 17 (1) of the 1973 Constitution, then enforced, the rule of taxation must not only be uniform, but must also be equitable (burden is on those who are better able to pay) and progressive (rates depend on the resources o persons affected). Uniformity has been defined as that principle by which all taxable articles or kinds of property of the same class shall be taxed at the same rate Adversely effecting as it does property rights, both the due process and equal protection clauses of the Constitution may properly be invoked to invalidate in appropriate cases a revenue measure. An obvious example is where it can be shown to amount to confiscation of property. It suffices then that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different both in the privileges conferred and the liabilities imposed By no strength of the imagination can the market value of properties covered by P.D. No. 20 be equated with the market value of properties not so covered. The former has naturally a much lesser market value in view of the rental restrictions.

PBCom v CIR Facts: 1. Pet filed its quarterly income tax returns for 1 and 2 quarter of 1985. taxes assessed and Tax Debit Memos were issued by BIR 2. In the year-end of 1985, pet incurred losses, declaring loss of 25M, therefore no income tax liability. Same with the succeeding year 3. But during these two years, PBCom earned rental income from leased properties. The lessees withheld and remitted to the BIR withholding creditable taxes st nd 4. Pet requested for taax credit from CIR representing overpaayment of taxes in 1 and 2 Q of 1985 5. It also claimed for refund of creditable taxes withheld by lessees from prop rentals 6. pending investgation, pet filed pet or review before CTA 7. CTA: denied claim for tax refund or credit on the ground that it was filed beyond the 2-yr reglementary period. Refund claim also denied on the assump that it was automatically credited by PBCom vs taax paayment for succeeding year 8. MR denied 9. CA affirmed in toto 10. Pet contends its claims for refund and tax credits are not yet barred by prescription relying on the applicability of RMC No. 7-85 states that overpaid income tax with BIR are not covered by the 2-yr prescriptive period under tax code, but prescriptive period is 10 yrs 11. He cites a case where it was ruled that government is precluded from adopting a position inconsistent with one previously taken where injustice would result therefrom or where there has been a misrepresentation to the taxpayer. Issue: 1. W/N CA erred in denying the plea for tax refund or tax credits on the ground of prescription, despite petitioners reliance on RMC No. 7-85, changing the prescriptive period of two years to ten years
st nd

Ruling: 1. Upholding the principle that taxes are the lifeblood of the nation. The primary purpose is to generate funds for the State to finance the needs of the citizenry and to advance the common weal, claims for refund or tax credit should be exercised within the time fixed by law because the BIR being an administrative body enforced to collect taxes, its functions should not be unduly delayed or hampered by incidental matters. In any case, under Sec 230 of NIRC, no such suit or proceeding shall be begun after the expiration of two years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment It is widely accepted that the interpretation placed upon a statute by the executive officers, whose duty is to enforce it, is entitled to great respect by the courts. Nevertheless, such interpretation is not conclusive and will be ignored if judicially found to be erroneous. CIR cannot issue guidelines contrary to legislation. Further, fundamental is the rule that the State cannot be put in estoppel by the mistakes or errors of its officials or agents. Sec 69 of NIRC provides that any excess of the total quarterly payments over the actual income tax computed in the adjustment or final corporate income tax return, shall either (a) be refunded to the corporation, or (b) may be credited against the estimated quarterly income tax liabilities for the quarters of the succeeding taxable year.

Phil Guaraanty v CIR Facts: 1. The Philippine Guaranty Co., Inc., a domestic insurance company, entered into reinsurance contracts, on various dates, with foreign insurance companies not doing business in the Philippines 2. Pet agreed to cede to the foreign reinsurers a portion of the premiums on insurance it has originally underwritten in the Philippines, in consideration for the assumption by the latter of liability on an equivalent portion of the risks insured. 3. Reinsurance contracts siggned by pet in PH, by foreign com outside except Swiss w/c are signed both in SW 4. A proportionate amt of taxes on insurance premiums not recovered from the original assured were to be paid for by the foreign reinsurers. 5. 5% of the reinsurance premiums wqs agreed to be given to pet for managing their Phil affairs 6. Venue or conflicts in Manila. SW contract construed by PH laws 7. Pet does nto pay for the portion of insurance premiums ceded to foreign companies 8. CIR assessed against pet withholding tax on the ceded reinsurance premiums 9. Pet protested saying these are not subect to w/holding tax, maintains that the reinsurance premiums in question did not constitute income from sources within the Philippines because the foreign reinsurers did not engage in business in the Philippines, nor did they have office here. Appealed to CTA, denied Issue: 1. W/N foreign reinsurance contracts are taxable Ruling: 1. Show however that transactions or activities that constituted the undertaking to reinsure pet. against loses arising from the original insurances in the Philippines were performed in the Philippines. The liability of the foreign reinsurers commenced simultaneously with the liability of pet. under the original insurances. 2. pet kept in Manila a register of the risks ceded to the foreign reinsurers. Entries bind foreign reinsurers. Reinsurance contracts, being signed here except the Swiss but stipulated that it be construed based on PH laws show their intention to submit to PH laws. Pet was paid ffor managing affairs o foreiggn companies here 3. Section 24 of the Tax Code subjects foreign corporations to tax on their income from sources within the Philippines. The word "sources" has been interpreted as the activity, property or service giving rise to the income Tax Code does not require a foreign corporation to engage in business in the Philippines in subjecting its income to tax. It suffices that the activity creating the income is performed or done in the Philippines. 4. Considering that the reinsurance premiums in question were afforded protection by the government and the recipient foreign reinsurers exercised rights and privileges guaranteed by our laws, such reinsurance premiums and reinsurers should share the burden of maintaining the state. 5. No deduction recognized under Sec. 53

Philex v CIR Facts: 1. Philex entered into a mining license agreement w/DENR. 2. purchased from several oil comp maanufaactured mineral oils amounting to more than 2M 3. pursuant to RA 1435, petitioner filed a claim for refund with the Commissioner of Internal Revenue representing 25% o specific taxes paid (600K plus) 4. pending CIR action, pet filed with CTA a case for tax refund. CTA: only 16K CA affirmed Issues: 1. W/N tax refund shall be based on Sections 1 and 2 of R.A. 1435, instead of the increased rates imposed by Sections 142 and 145 Ruling: 1. Court, in a string of decisions, repeatedly held that the tax refund under R.A. 1435 is computed on the basis of the specific tax deemed paid under Sections 1 and 2, and not on the increased rates actually paid under the 1977 NIRC. R.A. 1435, An Act to Provide Means for Increasing the Highway Special Fund, states that the specific taxes collected on gasoline and fuel which accrue to the Fund shall be used for the construction and maintenance of the highway system. Mining and lumber companies seldom use national highways. Since the gasoline and fuel purchased by mining and lumber companies are used within their own compounds and roads, and they do not benefit directly from the Fund, the government granted to these companies a 25% partial refund of specific taxes paid on purchases of manufactured diesel and fuel oils. Although Philex Mining Corporation paid the taxes on their oil and fuel purchases based on the increased rates, the latter law did not specifically provide for a refund based on the increased rates.

North Camarines Lumber Co. vs. CIR Facts: 1. Pet is engaged in lumber business. 2. It sold 2,164,863 board feet of logs to the General Lumber Co., Inc., with the agreement that the latter would assume responsibility for the payment of the sales tax thereon in the amount of P7,768.51. 3. CIR: no objection to arrangement so long as Gen Lumber would file the corresponding bonds to cover the sales tax liabilitiles. 4. Gen Lumber complied but it failed to pay tax liabilitiles 5. CIR asked pet to pay for them with penalties 6. Pet requested for reconsideration of assessment twice but denied 7. Went to CTA, rule it was filed beyond the 30-day period prescribed by Section 11 of Republic Act No. 1125, it has no jurisdiction to try the same. Dismissed Issue: 1. W/N CTA has jurisdiction or the appeal was filedd on time Ruling: 1. 33 days hadd lapsed before appeal was filed out of time. Cannot countenance that theory that would make the commencement of the statutory 30-day period solely dependent on the will of the taxpayer for "taxes are the lifeblood of the government, and their prompt and certain availability an imperious need."

Lorenzo v Posadas Facts: 1. Thomas Hanley died in zamboanga leaving a will and considerable amount of real and personal prop 2. Probate proceeding begun. Will states: a. Money left to be given to nephew b. Real prop not tobe sold w/in 10 yrs from death. Same be handled by exec and proceeds given to Matthew and he be directed to use it for education of brothers children and descendants c. 10 yrs after death, property iven to Matthew to be disposed of in a manner he deems advantageous 3. resp CIR went to the probate court praying that the trustee, plaintiff herein, be ordered to pay to the Government the said sum of P2,052.74 4. Pet paid in protest asking CIR to refund the amount or suit to be brought. Overrued, refused to refund Issues: 1. When does inheritance tax accrue 2. what value to base the inheritance tax, from death or after 10 yrs? 3. deductible compensation due to trustees? 4. What law governs the case at bar? Should the provisions of Act No. 3606 favorable to the tax-payer be given retroactive effect? 5. Has there been delinquency in the payment of the inheritance tax? Ruling: 1. Section 1536 as amended, of the Administrative Code, imposes the tax upon every transmission by virtue of inheritance, devise, bequest, gift mortist causa, or advance in anticipation of inheritance,devise, or bequest. The tax therefore is upon transmission or the transfer or devolution of property of a decedent, made effective by his death, which is the transfer to Moore, the trustee. Tax shall have been paid beofre such transfer 2. If death is the generating source from which the power of the estate to impose inheritance taxes takes its being and if, upon the death of the decedent, succession takes place and the right of the estate to tax vests instantly, the tax should be measured by the value of the estate as it stood at the time of the decedents death 3. There is no statute in the Philippines which requires trustees commissions to be deducted in determining the net value of the estate subject to inheritance tax There is no statute in the Philippines which requires trustees commissions to be deducted in determining the net value of the estate subject to inheritance tax 4. Act. No. 3606 went into effect on January 1, 1930. It, therefore, was not the law in force when the testator died on May 27, 1922. The law at the time was section 1544 above-mentioned, as amended by Act No. 3031, which took effect on March 9, 1922. It is well-settled that inheritance taxation is governed by the statute in force at the time of the death of the decedent 5. delivery to the trustee was delivery to the cestui que trust, the beneficiary in this case, within the meaning of the first paragraph of subsection (b) of section 1544 of the Revised Administrative Code. The delinquency in payment occurred on March 10, 1924, the date when Moore became trustee. The interest due should be computed from that date

Churchill and Tait v Concepcion Facts: 1. Pets copartners of Mercantile Advertising Agency, owners of a sign or billboard containing an area of 52 square meters constructed on private property in the city of Manila and exposed to public view, were taxes thereon P104. 2. The tax was paid under protest and the plaintiffs having exhausted all their administrative remedies instituted the present action under section 140 of Act No. 2339 against the Collector of Internal Revenue to recover back the amount thus paid 3. Pet contends the tax impose will result to losses on the business due to expenses to maitain it and depreciation of its value Issues: 1. tax as imposed by virtue of Act No. 2339, as amended by Act No. 2432, as amended by Act No. 2445, constitutes deprivation of property without compensation or due process of law, because it is confiscatory and unjustly discriminatory 2. tax is void for lack of uniformity, because it is not graded according to value; because the classification on which it is based on any reasonable ground; and furthermore, because it constitutes double taxation. Ruling: 1. It will thus be seen that the contention that the rates charged for advertising cannot be raised is purely hypothetical, based entirely upon the opinion of the plaintiffs, unsupported by actual test, and that the plaintiffs themselves admit that a number of other persons have voluntarily and without protest paid the tax herein complained of. The tax herein complained of falls far short of being confiscatory. 2. "Uniformity," as applied to the constitutional provision that all taxes shall be uniform, means that all property belonging to the same class shall be taxed alike. The statute under consideration imposes a tax of P2 per square meter or fraction thereof upon every electric sign, bill-board, etc., wherever found in the Philippine Islands. Or in other words, "the rule of taxation" upon such signs is uniform throughout the Islands. The fact that the land upon which the billboards are located is taxed at so much per unit and the billboards at so much per square meter does not constitute "double taxation." Double taxation, within the true meaning of that expression, does not necessarily affect its validity.