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[Nos. L-12100 and L-11812.

May 29, 1959]


BISAYA LAND TRANSPORTATION Co., INC., petitioner, vs. COLLECTOR OF INTERNAL
REVENUE, respondent. COLLECTOR OF INTERNAL REVENUE, petitioner, vs. BlSAYA
LAND TRANSPORTATION Co., INC., respondent.
Petitions for review of a decision of the Court of Tax Appeals.
The facts of this case as found by the court a quo are as follows:
Between June 1945 and January 15, 1957, petitioner Bisaya Land Transportation Co. acquired
equipment from the United States Commercial Co. which it used in the operation of its buses,
without paying the corresponding compensating and specific taxes. On investigation of its books
by revenue agents, it was discovered that its gross receipts of the transportation business from
1946 to 1951 were not declared for taxation. It was also found that from 1945 to 1952, the
petitioner issued freight receipts but the corresponding documentary stamps were not affixed
thereto. A deficiency additional residence tax was also determined.
After a series of exchange of communications between the petitioner and the respondent
Collector of Internal Revenue, the latter assessed the petitioner and demanded the total amount
of P4,949.91, consisting of (1) compensating tax; (2) common carrier's percentage tax; (3)
documentary stamp tax; and (4) additional residence tax.
On January 11, 1955, the present petition for review was filed with the Court of Tax Appeals,
which rendered a decision upholding the assessment, as to the deficiency common carrier's
percentage tax for 1946 and the first quarter of 1947 and the additional residence tax for 1947,
the collection of which was held to be barred by the statute of limitations.
In its brief, the petitioner company alleged that the Court of Tax Appeals erred (1) in not holding
that the claim for compensating tax and residence tax has already prescribed and (2) that the
Compensating tax, documentary stamp tax and common carrier's percentage tax are not
chargeable. The Government has also appealed.
Held:
Petitioner's pretense that the period of prescription, in relation to the first assignment of error,
should be computed from the filing of its income tax returns, is without merit. To begin with,
said income tax returns have not been introduced in evidence and therefore, there was no means
to determine what data were included in said return to apprise the Bureau of Internal Revenue
that the company should pay the compensating tax.
Secondly, income tax returns contain a statement of the taxpayer's income for a given year. The
taxpayer is not supposed to declare in said returns that he has purchased or received "from
without the Philippines", commodities or merchandise that are subject to the compensating tax.
Generally, such purchases are not "income," and, hence, have no place in income tax returns.

(2) Under its second assignment of error, the company maintains that the equipment and
materials it purchased from agencies of the U. S. Government are not subject to compensating
tax because they were acquired, not for business purposes but "in furtherance of the war efforts".
Suffice it to note that the acquisition of said effects took place between June, 1945 and January,
1947 while the hostilities in Japan and Europe ended in 1945.

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