Given To Messrs. Kuenzle and Streiff."
Given To Messrs. Kuenzle and Streiff."
Given To Messrs. Kuenzle and Streiff."
FACTS:
1. Petition for review of CTA decision that declared petitioner liable for deficiency income tax for 1950-
1952.
2. Petitioner deals with import of various products; insurance and lumber; and exports. In its ITRs for
1950-1952, it deducted from its gross income certain items such as salaries, bonuses, and interests on
earned but unpaid salaries.
3. Respondent disallowed the deductions above, and assessed (and demanded) petitioner income tax
deficiencies (around P124k for the 3 years). Petitioner requested for re-examination of assessment.
4. Respondent modified the assessment and allowed the fees and salaries of its officers to be deducted,
but disallowed the rest for they were in excess of the salaries of such. The new assessment was at
around P57k for the 3 years. Upon appeal to the CTA, the assessment was further modified to amount
to around P33k.
5. Petitioner: appeals the portion of the CTA ruling which holds that the measure of the reasonableness
of the bonuses paid to its non-resident officers should also be applied to its resident officers and
employees in determining their deductibility.
6. Respondent: appeals the portion of the ruling which allows the deduction of so much of the bonuses
which are in excess of the yearly salaries the recipients were already receiving.