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Commissioner of Internal Revenue vs. Algue Inc. GR No. L-28896 | Feb. 17, 1988
Facts:
Issue:
Held/Ruling:
Facts: Algue Inc. is a domestic corp engaged in engineering, construction and other allied activities On Jan. 14, 1965, the corp received a letter from the CIR regarding its delinquency income taxes from 1958-1959, amtg to P83,183.85 A letter of protest or reconsideration was filed by Algue Inc on Jan 18 CIR contentions: the claimed deduction of P75,000.00 promotional fees was properly disallowed because it was not an ordinary reasonable or necessary business expense payments are fictitious because most of the payees are members of the same family in control of Algue and that there is not enough substantiation of such payments
Commissioner of Internal Revenue vs. Algue Inc. GR No. L-28896 | Feb. 17, 1988
Issue: Should an uncommon business expense be disallowed as a proper deduction in computation of income taxes, corollary to the doctrine that taxes are the lifeblood of the government?
Commissioner of Internal Revenue vs. Algue Inc. GR No. L-28896 | Feb. 17, 1988
Held/Ruling: It is well-settled that taxes are the lifeblood of the government and so should be collected without unnecessary hindrance On the other hand, such collection should be made in accordance with law as any arbitrariness will negate the very reason for government itself. It is therefore necessary to reconcile the apparently conflicting interests of the authorities and the taxpayers so that the real purpose of taxation, which is the promotion of the common good, may be achieved. In this case, Algue Inc. has proved that the payment of the fees was necessary and reasonable in the light of the efforts exerted by the payees in inducing investors and prominent businessmen to venture in an experimental enterprise and involve themselves in a new business requiring millions of pesos.