03-13-2023, 06:13 PM
YAP Vs. BIR, CTA NO. 10019
March 9, 2023
HIGHLIGHTS
Deduction from Income Tax
It must be emphasized that for income tax purposes, a taxpayer is free to deduct from its gross income a lesser amount, or not to claim any deduction at all. What is prohibited by the income tax law is to claim a deduction beyond the amount authorized therein.
Commissioner of Internal Revenue vs. Phoenix Assurance Co. Ltd., et seq. , G.R. Nos. L-
19727 and L-19903, May 20, 1965.
Thus, even when a taxpayer has not claimed purchases and expenses, or declared a lesser amount thereof, in the Income Tax Return, such action is allowed, and shall not necessarily result in the imposition of income tax on the undeclared or underdeclared purchases.
In the same vein, just as no income tax should be imposed on the supposed undeclared purchases and expenses of petitioner, no VAT should likewise be imposed thereon.
March 9, 2023
HIGHLIGHTS
Deduction from Income Tax
It must be emphasized that for income tax purposes, a taxpayer is free to deduct from its gross income a lesser amount, or not to claim any deduction at all. What is prohibited by the income tax law is to claim a deduction beyond the amount authorized therein.
Commissioner of Internal Revenue vs. Phoenix Assurance Co. Ltd., et seq. , G.R. Nos. L-
19727 and L-19903, May 20, 1965.
Thus, even when a taxpayer has not claimed purchases and expenses, or declared a lesser amount thereof, in the Income Tax Return, such action is allowed, and shall not necessarily result in the imposition of income tax on the undeclared or underdeclared purchases.
In the same vein, just as no income tax should be imposed on the supposed undeclared purchases and expenses of petitioner, no VAT should likewise be imposed thereon.