Post on 29-May-2018
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C. F. CALANOC vs CIR
FACTS
To solicit and receive contributions for the orphans and destitute children of the
Child Welfare Workers Club of the Social Welfare Commission, CF Calanoc financed
and promoted a boxing and wrestling exhibition.
The CIR found that the gross sales generated by the exhibition amounted to
P26,553.00; the expenditures incurred was P25,157.62; and the net profit was only
P1,375.30. Upon examination of the receipts, the CIR also found the following items
of expenditures: (a) P461.65 for police protection; (b) P460.00 for gifts; (c)
P1,880.05 for parties; and (d) several items for representation. Calanoc remitted toSWC P1,375.30 only.
Based on its findings, the CIR assessed Calanoc an amusement tax of P7,378.57.
DECISION: Expenses were excessive and not justified, notdeductible
Calanoc denied having received the stadium fee P1,000, which was not included in
the receipts. And that even if he did, he could not be made to pay almost seven
times the amount as amusement tax. Evidence was submitted, however, that the
said stadium fee of P1,000, was paid by the O-SO Beverages directly to the stadium
management for advertisement privileges on the day of the exhibition. Since thefee was paid by the concessionaire, Calanoc had no right to include the P1,000
stadium fee among the items of his expenses. It results, therefore, that P1,000 went
into Calanocs pocket unaccounted.
Furthermore petitioner admitted that he could not justify the other expenses, such
as those for police protection and gifts. He claims further that the accountant who
prepared the statement of receipts was already dead and could no longer be
questioned on the items contained in said statement.
Most of the items of expenditures contained in the statement submitted to the CIR
were either exorbitant or not supported by receipts. The payment of P461.65 for
police protection was illegal as it was a consideration given by Calanoc to the police
for the performance by the latter of the functions required of them to be rendered
by law. The expenditures of P460 for gifts, P1,880.05 for parties, and other items for
representation were rather excessive, considering that the purpose of the
exhibition was for a charitable cause.
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A th l f th J t i M 1944 h th M il t
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As the value of the Japanese war notes in May, 1944 when the Manila property wasbought, was 1 of the genuine Philippine Peso (Ballantyne Scale), and since thegain derived or loss sustained in the disposition of this property is to reckoned interms of Philippine Peso, the value of the Japanese war notes used in the purchaseof the property, must be reduced in terms of the genuine Philippine Peso todetermine the cost of acquisition. It, therefore, results that since the sum of
P66,000.00 in Japanese war notes in May, 1944 is equivalent to P5,500.00 inPhilippine currency (P66,000.00 divided by 12), the acquisition cost of the propertyin question is P66,000.00 plus P5,500.00 or P71,500.00 and that as the property wassold for P75,000.00 in 1951, the owners thereof Mariano and Felicidad Zamora
derived a capital gain of P3,500.00 or P1,750.00 each.
For the Quezon City property, the CTA was correct in giving credence to Zamorastestimony that the same was purchased in Philippine currency, because it is quiteincredible that real property with an assessed value of P46,910.00 should have
been sold in Japanese war notes with an equivalent value in Philippine currency ofonly P17,239.75. Thus, the gain derived from the sale is P15,361.75, after deductingfrom the selling price the cost of acquisition in the sum of P68,959.00 and the
expense of sale in the sum of P9,679.25.
IN VIEW HEREOF, the petition in each of the above-entitled cases is dismissed, and
the decision appealed from is affirmed, without special pronouncement as to costs.
Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala andMakalintal, JJ., concur.
Labrador and Barrera, JJ., took no part.
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