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    Gatchalian Vs CIR

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    divina gracia hinlo
    1) The plaintiffs formed a partnership to purchase a sweepstakes ticket. Their ticket won third prize of P50,000. 2) The Collector of Internal Revenue assessed the partnership P1,499.94 in income tax. 3) The court ruled that a partnership was formed, not just a community of property. As a partnership, it is liable for income tax as an entity rather than dividing the tax among the individual partners.

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    Gatchalian Vs CIR

    Uploaded by

    divina gracia hinlo
    432 views1 page
    1) The plaintiffs formed a partnership to purchase a sweepstakes ticket. Their ticket won third prize of P50,000. 2) The Collector of Internal Revenue assessed the partnership P1,499.94 in income tax. 3) The court ruled that a partnership was formed, not just a community of property. As a partnership, it is liable for income tax as an entity rather than dividing the tax among the individual partners.

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    Partnership

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    Gatchalian vs CIR

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    1) The plaintiffs formed a partnership to purchase a sweepstakes ticket. Their ticket won third prize of P50,000. 2) The Collector of Internal Revenue assessed the partnership P1,499.94 in income tax. 3) The court ruled that a partnership was formed, not just a community of property. As a partnership, it is liable for income tax as an entity rather than dividing the tax among the individual partners.

    Copyright:

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

    Gatchalian Vs CIR

    Uploaded by

    divina gracia hinlo
    1) The plaintiffs formed a partnership to purchase a sweepstakes ticket. Their ticket won third prize of P50,000. 2) The Collector of Internal Revenue assessed the partnership P1,499.94 in income tax. 3) The court ruled that a partnership was formed, not just a community of property. As a partnership, it is liable for income tax as an entity rather than dividing the tax among the individual partners.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Gatchalian v.

    Collector of Internal Revenue, 67 Phil 666

    Facts:

    Prior to December 15, 1934 plaintiffs, in order to enable them to purchase one sweepstakes ticket valued
    at two pesos (P2), subscribed and contributed each. That immediately thereafter but prior to December
    15, 1934, plaintiffs purchased, in the ordinary course of business, from one of the duly authorized agents
    of the National Charity Sweepstakes Office one ticket bearing No. 178637 for the sum of two pesos (P2)
    and that the said ticket was registered in the name of Jose Gatchalian and Company. The said ticket no.
    won third prize in the amount of P50,000 and that the corresponding check covering the above-mentioned
    prize of P50,000 was drawn by the National Charity Sweepstakes Office in favor of Jose Gatchalian &
    Company against the Philippine National Bank, which check was cashed during the latter part of
    December, 1934 by Jose Gatchalian & Company.

    That on January 8, 1935, CIR made an assessment against Jose Gatchalian & Company requesting the
    payment of the sum of P1,499.94. The plaintiffs, through their attorney requested exemption from the
    payment of the income tax to which reply there were enclosed fifteen (15) separate individual income tax
    returns filed separately by each one of the plaintiffs. Plaintiffs paid the amount of demanded upon
    defendant the refund .of the total of P1,863.44 paid under protest by them but that defendant refused and
    still refuses to refund the said amount notwithstanding the plaintiffs' demands.

    Issues:

    (1) Whether the plaintiffs formed a partnership, or merely a community of property without a personality
    of its own; in the first case it is admitted that the partnership thus formed is liable for the payment of
    income tax, whereas if there was merely a community of property, they are exempt from such payment;
    and

    (2) Whether they should pay the tax collectively or whether the latter should be prorated among them and
    paid individually.

    Ruling:

    1. Yes. PARTNERSHIP OF A CIVIL NATURE; COMMUNITY OF PROPERTY;.—According to


    the stipulated facts the plaintiffs organized a partnership of a civil nature because each of them put up
    money to buy a sweepstakes ticket for the sole purpose of dividing equally the prize which they may win,
    as they did in fact in the amount of P50,000 (article 1665, Civil Code). The partnership was not only
    formed, but upon the organization thereof and the winning of the prize, J. G. personally appeared in the
    office of the Philippine Charity Sweepstakes, in his capacity as co-partner, as such collected the prize, the
    office issued the check for 50,000 in favor of J. G. and company, and the said partner, in the same
    capacity, collected the check. All these circumstances repel the idea that the plaintiffs organized and
    formed a community of property only.

    2. No. Having organized and constituted a partnership of a civil nature, the said entity is the one
    bound to pay the income tax which the defendant collected under the aforesaid section 10 (a) of Act
    No. 2833, as amended by section 2 of Act No. 3761. There is no merit in plaintiffs' contention that the
    tax should be prorated among them and paid individually, resulting in their exemption from the tax.

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