Atlas Consolidated V Cir

9. ATLAS CONSOLIDATED MINING AND truck.
The series of transactions engaged in by

DEVELOPMENT CORPORATION v. CA, CIR ACMDC for the lease of its aforesaid properties could
and CTA; also be deduced from the fact that for the tax years 1975
GR No 105563 and 1976 there were profits earned and reported
*(Presumption of regularity of assessments) therefor. It received a rental income of P630,171.56 for
tax year 1975 39 and P2,450,218.62 for tax year 1976.
FACTS:
Considering that there was a series of transactions
The CIR, acting on the basis of the report of the involved, plus the fact that there was an apparent and
examiners of the BIR, caused the service of an protracted intention to profit from such activities, it can
assessment notice and demand for payment of the be safely concluded that ACMDC was habitually
amount of P12,391,070.51 representing deficiency ad engaged in the leasing out of its plane, motor boat and
valorem percentage and fixed taxes, including dump truck, and is perforce subject to the contractor’s
increments, for the taxable year 1975 against tax.chanrobles law library : red
ACMDC. Likewise, on the basis of the BIR examiner’s
report in another investigation separately conducted, The allegation of ACMDC that it did not realize any
the Commissioner had another assessment notice, with profit from the leasing out of its said personal
a demand for payment of the amount of properties, since its income therefrom covered only the
P13,531,466.80 representing the 1976 deficiency ad costs of operation such as salaries and fuel, is not
valorem and business taxes with P5,000.00 supported by any documentary or substantial evidence.
compromise penalty, served on ACMDC on We are not, therefore, convinced by such disavowal.
September 23, 1980. ACMDC protested both
assessments but the same were denied, hence it filed Assessments are prima facie presumed correct and
petitions for review in the CTA. made in good faith. Contrary to the theory of
ACMDC, it is the taxpayer and not the Bureau of
The CTA ruled that ACMDC was not liable for Internal Revenue who has the duty of proving
deficiency ad valorem taxes on copper and silver for otherwise. It is an elementary rule that in the absence
1975 and 1976. However, the tax court held ACMDC of proof of any irregularities in the performance of
liable for the amount of P1,572,637.48, exclusive of official duties, an assessment will not be disturbed. All
interest, consisting of 25% surcharge for late payment presumptions are in favor of tax assessments. 41 Verily,
of the ad valorem tax and late filing of notice of failure to present proof of error in the assessment will
removal of silver, gold and pyrite extracted during justify judicial affirmance of said assessment.
certain periods, and for alleged deficiency
manufacturer’s sales tax and contractor’s tax. Finally, we deem it opportune to emphasize the oft-
repeated rule that tax statutes are to receive a
ACMDC elevated the case to the CA, it assailed that reasonable construction with a view to carrying out
part of the decision ordering it to pay P1,572,637.48 their purposes and intent. 43 They should not be
representing alleged deficiency assessment. The CA construed as to permit the taxpayer to easily evade the
further reduced the tax liability of ACMDC. Still not payment of the tax. 44 On this note, and under the
satisfied with the said judgment which had reduced its confluence of the weighty considerations and
tax liability as a final recourse ACMDC came to this authorities earlier discussed, the challenged assessment
Court on a petition for review on certiorari. against ACMDC for contractor’s tax must be upheld.
ISSUE:
WON petitioner is liable for payment of the
contractor’s tax and surcharge on the alleged lease of
personal property during the taxable years 1975 and
1976 plus interest."
RULING:
No. It cannot validly claim that the leasing out of its

personal properties was merely an isolated transaction.
Its book of accounts shows that several distinct
payments were made for the use of its personal
properties such as its plane, motor boat and dump

Atlas Consolidated V Cir

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9. ATLAS CONSOLIDATED MINING AND truck.

The series of transactions engaged in by

No. It cannot validly claim that the leasing out of its

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