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    Limpan Investment Corp V CIR

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    Reena Ma
    The Supreme Court ruled that Limpan Investment Corp was liable for unreported rental income in 1956 and 1957. For 1956, the court rejected Limpan's claim that the rental income was collected by the owner and not the corporation. For 1957, the court held that Limpan had constructively received rental income deposits in court, even if the deposits were not physically received until 1958, since the deposits were not the fault of the tenants. The court also rejected Limpan's claim that some rental income was received by the corporation president personally rather than by the corporation.

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    Limpan Investment Corp V CIR

    Uploaded by

    Reena Ma
    57 views1 page
    The Supreme Court ruled that Limpan Investment Corp was liable for unreported rental income in 1956 and 1957. For 1956, the court rejected Limpan's claim that the rental income was collected by the owner and not the corporation. For 1957, the court held that Limpan had constructively received rental income deposits in court, even if the deposits were not physically received until 1958, since the deposits were not the fault of the tenants. The court also rejected Limpan's claim that some rental income was received by the corporation president personally rather than by the corporation.

    Original Description:

    Gross Income Taxation 1

    Original Title

    Limpan Investment Corp v CIR

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    The Supreme Court ruled that Limpan Investment Corp was liable for unreported rental income in 1956 and 1957. For 1956, the court rejected Limpan's claim that the rental income was collected by the owner and not the corporation. For 1957, the court held that Limpan had constructively received rental income deposits in court, even if the deposits were not physically received until 1958, since the deposits were not the fault of the tenants. The court also rejected Limpan's claim that some rental income was received by the corporation president personally rather than by the corporation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    57 views1 page

    Limpan Investment Corp V CIR

    Uploaded by

    Reena Ma
    The Supreme Court ruled that Limpan Investment Corp was liable for unreported rental income in 1956 and 1957. For 1956, the court rejected Limpan's claim that the rental income was collected by the owner and not the corporation. For 1957, the court held that Limpan had constructively received rental income deposits in court, even if the deposits were not physically received until 1958, since the deposits were not the fault of the tenants. The court also rejected Limpan's claim that some rental income was received by the corporation president personally rather than by the corporation.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Limpan Investment Corp v CIR

    Doctrine: constructive receipt of income

    Income even if not actually received is to be reported as income. “The withdrawal in 1958 of the
    deposits in court pertaining to the 1957 rental income is not sufficient justification for the
    nondeclaration of said income in 1957, since the deposit was resorted to due to the refusal of
    petitioner to accept the same, and was not the fault of its tenants; hence, petitioner is deemed to have
    constructively received such rentals in 1957.”

    Limpan Co, Petitioner is a corporation in the business of leasing out various properties in Pasay and
    Manila. It is owned by the Sps. Lim.

    BIR assessed deficiency taxes for 1956 and 1957. BIR alleged that Limpan had undeclared rental
    income of 20,199.00 and P81,690.00 for the years 1956 and 1957 respectively.

    WN Limpan is liable for tax on the unreported rental income? YES

    Explanations of Limpan Court Ruling


    For 1956
    a. It never received 20k income, this was Unmeritorious. The arrangement that Lim
    collected by Lim who retained ownership of retained ownership to the properties and
    the property and applied such to the turn over 6% to the corporation to be
    payment of rent. applied to rentals of the land and in
    exchange for whatever rentals they may
    collect from tenants who refused to
    recognize new owners was uncorroborated
    and unusual.
    12100 was omitted by the Treasurer, Solis Even their own witness admitted to the
    underdeclaration.
    For 1957
    part of the income totaling 31,380, of which Not proven. Lim was not presented as
    13500 was received by its President Lim witness.
    who turned over the said amount only in
    1959.
    And a certain tenant, Go Tong, The withdrawal in 1958 of the deposits
    deposited 10,800 in court (as in court pertaining to the 1957 rental
    consignment, since the tenant did not income is no sufficient justification for
    recognize Lim as the owner of the the non-declaration of said income in
    property) and 4200 of said income 1957, since the deposit was resorted to
    should not be declared as income since due to the refusal of petitioner to accept
    this was paid by a subtenant. the same, and was not the fault of its
    tenants; hence, petitioner is deemed to
    *MAIN kahit eto lang sabihin mo. have constructively received such
    rentals in 1957. The payment by the
    sub- tenant in 1957 should have been
    reported as rental income in said year,
    since it is income just the same
    regardless of its source.

    29,350 was omitted by Solis. Even their own witness admitted to the
    underdeclaration.

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