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VOL. 8, MAY 31. 1963 168 Zamora vs. Collector of Internal Revenue No. L-15290. May 31, 1963. MARIANO ZAMORA, petitioner. vs. COLLECTOR OF INTERNAL REVENUE and COURT OF TAX APPEALS, respondents. No. L-15280. May 31, 1963. COLLECTOR OF INTERNAL REVENUE, petitioner, vs. MARIANO ZAMORA. respondent. No. L-15289. May 31, 1963. ESPERANZA A. ZAMORA, as Special Administratrix of Estate of FELICIDAD
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   VOL. 8, MAY 31. 1963168 Zamora vs. Collector of Internal Revenue No. L-15290. May 31, 1963.MARIANO ZAMORA, petitioner. vs.  COLLECTOR OFINTERNAL REVENUE and COURT OF TAX APPEALS,respondents.No. L-15280. May 31, 1963.COLLECTOR OF INTERNAL REVENUE, petitioner, vs. MARIANO ZAMORA. respondent.No. L-15289. May 31, 1963.ESPERANZA A. ZAMORA, as Special Administratrix of Estate of FELICIDAD ZAMORA, petitioner, vs, COLLECTOR OF INTERNAL REVENUE and COURT OFTAX APPEALS, respondents.No. L-15281. May 31, 1963.COLLECTOR OF INTERNAL REVENUE, petitioner, vs. ESPERANZA A. ZAMORA, as Special Administratrix, etc.respondent. Taxation; Income taxes; Business expenses as deductions.  — Promotion expenses constitute one of the deductions in con- 164 164SUPREME COURT REPORTS ANNOTATED Zamora vs, Collector of Internal Revenue ducting a business and should satisfy the requirements of Section30 of the Tax Code, which provides that in computing net income,  there shall be allowed as deductions all the ordinary and necessaryexpenses paid or incurred during the taxable year, in carrying onany trade or business (Vol. 4, Mertens, Law of Federal IncomeTaxation, sec. 25.03, p. 307). Same; Same; Same; Requisites for deduction of businessexpenses.  —Representation expenses fall under the category of business expenses which are allowable deductions from grossincome, if they meet the conditions prescribed by law, particularlysection 30(a) (1), of the Tax Code. To be deductible, they must beordinary and necessary expenses paid or incurred in carrying onany trade or business, and should meet the further test of reasonableness in amount. They should, moreover, be covered bysupporting papers; in the absence thereof the amount properlydeductible as representation expenses should be determined from allavailable data. (Visayan Cebu Terminal Co., Inc. v.  Collector of Int.Rev., L-12798, May 30, 1960.) Same; Capital gains taxes; Cost basis of property acquired inJapanese war notes.  —The cost basis of property acquired inJapanese war notes is the equivalent of the war notes in genuinePhilippine currency in accordance with the Ballantyne Scale of values, and the determination of the gain derived or loss sustainedin the sale of such property is not affected by the decline at the timeof sale, in the purchasing power of the Philippine currency. Statutory construction; Antecedents or legislative history of statute to be considered in its interpretation.  —Courts are permittedto look into and investigate the antecedents or the legislative historyof the statutes involved (Director of Lands v. Abaya, et al., 63 Phil.559).  APPEAL from a decision of the Court of Tax Appeals.The facts are stated in the opinion of the Court.  Solicitor General  for petitioner.  Rodegelio M. Jalandoni  for respondents.PAREDES, J.: In the above-entitled cases, a joint decision was rendered bythe lower court because they involved practically the sameissues, We do so, likewise, for the same reason. Cases Nos. L-15290 and L-15280  Mariano Zamora, owner of the Bay View Hotel andFarmacia Zamora, Manila, filed his income tax returns for 165  VOL. 8, MAY 31, 1963165  (1)(2)(3)(4)(1)(2) Zamora vs. Collector of Internal Revenue the years 1951 and 1952. The Collector of Internal Revenuefound that he failed to file his return of the capital gainsderived from the sale of certain real properties and claimeddeductions which were not allowable. The Collector requiredhim to pay the sums of P43,758.50 and P7,-625.00, asdeficiency income tax for the years 1951 and 1952,respectively (C.T.A. Case No. 234, now L-15290). On appealby Zamora, the Court of Tax Appeals on December 29, 1958,modified the decision appealed from and ordered him to paythe reduced total sum of P30,258.00 (P22,980.00 andP7.278.00, as deficiency income tax for the years 1951 and1952, respectively), within thirty (30) days from the date thedecision becomes final, plus the corresponding surchargesand interest in case of delinquency, pursuant to section51(e), Int. Revenue Code. With costs against petitioner.Having failed to obtain a reconsideration of the decision,Mariano Zamora appealed (L-15290), alleging that theCourt of Tax Appeals erred— In disallowing P10,478.50, as promotion expensesincurred by his wife for the promotion of the Bay View Hotel and Farmacia Zamora (which is 1/2 of P20,957.00, supposed business expenses):In disallowing 3-1/2% per annum as the rate of depreciation of the Bay View Hotel Building;In disregarding the price stated in the deed of sale,as the costs of a Manila property, for the purpose of determining alleged capital gains; andIn applying the Ballantyne scale of values indetermining the cost of said property.The Collector of Internal Revenue (L-15280) also appealed,claiming that the Court of Tax Appeals erred— In giving credence to the uncorroborated testimonyof Mariano Zamora that he bought the said realproperty in question during the Japaneseoccupation, partly in Philippine currency and partlyin Japanese war notes, andIn not holding that Mariano Zamora is liable for thepayment of the sums of P43,758.00 and P7,625.00 asdeficiency income taxes, for the years 1951 and1952, plus the 5%  surcharge and 1% monthlyinterest, from the date said amounts became due tothe date of actual payment.  (1)(2)(1)(2) Cases Nos. L-15289 and L-15281 Mariano Zamora and his deceased sister Felicidad Za- 166 166SUPREME COURT REPORTS ANNOTATED Zamora vs. Collector of Internal Revenue mora, bought a piece of land located in Manila on May 16,1944, for P132,000.00 and sold it for P75,000.00 on March 5,1951. They also purchased a lot located in Quezon City forP68,959.00 on January 19, 1944, which they sold forP94,000 on February 9, 1951. The CTA ordered the estate of the late Felicidad Zamora (represented by Esperanza A.Zamora, as special administratrix of her estate), to pay thesum of P235.50, representing alleged deficiency income taxand surcharge due from said estate. Esperanza A. Zamoraappealed and alleged that the CTA erred:— In disregarding the price stated in the deed of sale,as the cost of the Manila Property for the purpose of determining alleged capital gains; andIn applying the Ballantyne Scale of values indetermining the cost thereof.The Commissioner of Internal Revenue likewise appealedfrom the decision, claiming that the lower court erred:— In giving credence to the uncorroborated testimonyof Mariano Zamora that he bought the real propertyinvolved during the Japanese occupation, partly ingenuine Philippine currency and partly in Japanesewar notes; andIn not holding that Esperanza  A.  Zamora, asadministratrix, is liable for the payment of the sumof P613.00 as deficiency income tax and 50%surcharge for 1951, plus 50% surcharge and 1%monthly interest from the date said amount becamedue, to the date of actual payment.It is alleged by Mariano Zamora that the CTA erred indisallowing P10,478.50 as promotion expenses incurred byhis wife for the promotion of the Bay View Hotel andFarmacia Zamora. He contends that the whole amount of P20,957.00 as promotion expenses in his 1951 income taxreturns, should be allowed and not merely one-half of it orP10,478.50, on the ground that, while not all the itemized
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