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Commissioner of Internal Revenue (CIR) vs. Court of Tax Appeals (CTA) and Smith Kline

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. COURT OF TAX APPEALS and SMITH KLINE & FRENCH OVERSEAS CO. (PHILIPPINE BRANCH), respondents.

G.R. No. L-54108 | 1984-01-17

D E C I S I O N

AQUINO, J.:

This case is about the refund of a 1971 income tax amounting to P324,255. Smith Kline and French Overseas Company, a multinational firm domiciled in Philadelphia, Pennsylvania, is licensed to do business in the Philippines. It is engaged in the importation, manufacture and sale of pharmaceuticals, drugs and chemicals.

In its 1971 original income tax return, Smith Kline declared a net taxable income of P1,489,277 (Exh. A) and paid P511,247 as tax due. Among the deductions claimed from gross income was P501,040 ($77,060) as its share of the head office overhead expenses. However, in its amended return filed on March...