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C. M. Hoskins & Co., Inc. vs. Commissioner Of Internal Revenue

C. M. HOSKINS & CO., INC., petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, respondent.

G.R. No. L-24059 | 1969-11-28

D E C I S I O N 


TEEHANKEE, J.: 

We uphold in this taxpayer's appeal the Tax Court's ruling that payment by the taxpayer to its controlling stockholder of 50% of its supervision fees or the amount of P99,977.91 is not a deductible ordinary and necessary expense and should be treated as a distribution of earnings and profits of the taxpayer. 

Petitioner, a domestic corporation engaged in the real estate business as brokers, managing agents and administrators, filed its income tax return for its fiscal year ending September 30, 1957 showing a net income of P92,540.25 and a tax liability due thereon of P18,508.00, which it paid...