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Pirovano Vs CIR

This document summarizes a Supreme Court case from 1965 regarding whether Maria Carla Pirovano should pay donees' gift tax. De la Rama Steamship Co. had insured the life of their president, who later passed away. The insurance proceeds of P643,000 were then given to the president's children. The Commissioner of Internal Revenue assessed gift tax against Pirovano and donor's tax against the company. The Court upheld the donees' gift tax assessment, finding that while the donation was made due to gratitude for the president's services, the consideration was not the services themselves, making it a taxable gift under the law.

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153 views2 pages

Pirovano Vs CIR

This document summarizes a Supreme Court case from 1965 regarding whether Maria Carla Pirovano should pay donees' gift tax. De la Rama Steamship Co. had insured the life of their president, who later passed away. The insurance proceeds of P643,000 were then given to the president's children. The Commissioner of Internal Revenue assessed gift tax against Pirovano and donor's tax against the company. The Court upheld the donees' gift tax assessment, finding that while the donation was made due to gratitude for the president's services, the consideration was not the services themselves, making it a taxable gift under the law.

Uploaded by

JDR JDR
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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AUG

23

MARIA CARLA PIROVANO, etc., et al. v. THE COMMISSIONER OF INTERNAL REVENUE. G.R. No. L-19865.
July 31, 1965

FACTS:

De la Rama Steamship Co. insured the life of Enrico Pirovano, who was then its President and General
Manager until the time of his death. The Company then received the total sum of P643,000.00 as
proceeds of the said life insurance policies. The Company renounced all its rights on the money in favor
of the decendent's children.

After a case that marred Estefania Pirovano, the guardian and the Company (see Pirovano vs. De la
Rama Steamship Co., 96 Phil. 335.), the Company paid in favor of the children.

The CIR then assessed donees' gift tax against Pirovano and donor's tax against the Company. Pirovano
contested with the CIR which she lost and thus appealed with the CTA.

The CTA held that donees' gift tax were correctly assessed.

ISSUE: Whether Pirovano should pay the donees' gift tax.

RULING:

YES. Pirovano contends that the Court itself declared that the donation was renumenatory and not
simple and it was made for a full and adequate compensation for the valuable services by decedent to
the Company; hence, the donation does not constitute a taxable gift under the provisions of Section 108
of the National Internal Revenue Code (old law).
The Court states that it is a donation; that the consideration for the donation was, therefore, the
company's gratitude for his services, and not the services themselves and whether the donation was
simple or renumenatory, it was still a gift taxable under the law

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