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Veronica Sanchez vs. The Collector of Internal

Revenue

Plaintif, appellant deendant, appellee ( Solicitor Ambrosio

Padilla, Sol. Esmeraldo Umali and Roman

Cansino ,Jr

Ponente : Reyes, JB

Nature: An appeal rom a judgment o te Court o !irst "nstance o

#anila

Facts: Veronica Sanchezconstructed er !oor accessoria

purposel$ or rent or pro%t& tat se ad been continuousl$ leasing te

same to tird persons since its construction in "#$& tat se

manages er propert$ ersel& and tat said leased olding appears toer main source o li'eliood& se is engaged in te leasing o real

estate, and se is a real estate dealer.

e building as an assessed 'alue o )*,+-, and te land

assessed at ,/0-& a total o )/,+-. "n *//, se deri'ed an income o

,+- annuall$, Se runs a small dr$ good store in Pasa$ mar1et 2it

an income o *, 3-- annuall$.

In early %art of "#&", CIR 'a!e a !e'an!e! u%on thea%%ellant for the %ay'ent of "().&" as inco'e ta* for the yr

"#&+, an! ()$as real estate !ealers ta* for the year "#( to

"#&+ ,plus te sum o +- pesos as compromise. e appellant paid

te ta4es demanded under protest. 5ct *6, */+* se %led and action

against C"R in te court o %rst instance.

Issue:

*. 7eter 8eronica Sance9 is a real estate dealer.). 7eter se is entitled or a reund o te ta4es se paid.

Rulin- of CFI:

". after trial the court foun! the a%%ellant to e such an

estate !ealer as !e/ne! y section"# of National Internal

Revenue Co!e, a'en!e! y R0 1 an! &22, an!!eclare!

8/9/2019 2 Tax Case Digest by Ms. Agnes

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the collection of ta*es in 3uestion is le-al an! in

accor!ance 4ith the sai! %rovisions.

CT0

e a%%ellant clai's a refun! of the a'ount of 21&.++

alle-e!ly %ai! y herto C"R as real estate ta4., it appears tat tesum o *63.3* corresponds to er income ta4 or te $r *//, so te

amount actuall$ in'ol'ed erein is onl$ 63, paid b$ Sance9 as real

estate ta4 dealer b$ te $r */6:*/+-.

R0 No. &22too1 efect onl$ on Sept )), */+-, 2ile te ta4 in

;uestion b$ te appellant or te $ear */6: */+-.

Rulin-:

Considering, tereore, tat te appellant constructed er door

accessoria purposel$ or rent or pro%t, tat se continuousl$ leasing

te same or te tird persons since its construction in */& tat se

manages er propert$ b$ ersel& and tat said leased olding appears

to be er main source o li'eliood, se is en-a-e! in the leasin- of

real estate, an! is a real estate !ealer as !e/ne! y section

"# of the IRC, as a'en!e! y R0 1.

5Real estate !ealers inclu!es all the %ersons 4ho for their o4naccount en-a-e! in the sale of lan!s, uil!in-s or interest

therein or in leasin- real estate.6 R0 1

0%%ellant Contention