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    Gatchalian Vs Cir

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    mitsudayo_
    The plaintiffs contributed money to purchase a sweepstakes ticket that won a P50,000 prize. They were assessed income tax on the winnings but argued they were exempt. The court found that by contributing money with the intent to split any winnings, the plaintiffs formed a civil partnership and were therefore liable for income tax. The court affirmed the tax assessment, finding the plaintiffs organized a partnership when they purchased the ticket with the purpose of dividing any prize money won.

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    Gatchalian Vs Cir

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    mitsudayo_
    1K views2 pages
    The plaintiffs contributed money to purchase a sweepstakes ticket that won a P50,000 prize. They were assessed income tax on the winnings but argued they were exempt. The court found that by contributing money with the intent to split any winnings, the plaintiffs formed a civil partnership and were therefore liable for income tax. The court affirmed the tax assessment, finding the plaintiffs organized a partnership when they purchased the ticket with the purpose of dividing any prize money won.

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    Gatchalian vs Cir

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    The plaintiffs contributed money to purchase a sweepstakes ticket that won a P50,000 prize. They were assessed income tax on the winnings but argued they were exempt. The court found that by contributing money with the intent to split any winnings, the plaintiffs formed a civil partnership and were therefore liable for income tax. The court affirmed the tax assessment, finding the plaintiffs organized a partnership when they purchased the ticket with the purpose of dividing any prize money won.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views2 pages

    Gatchalian Vs Cir

    Uploaded by

    mitsudayo_
    The plaintiffs contributed money to purchase a sweepstakes ticket that won a P50,000 prize. They were assessed income tax on the winnings but argued they were exempt. The court found that by contributing money with the intent to split any winnings, the plaintiffs formed a civil partnership and were therefore liable for income tax. The court affirmed the tax assessment, finding the plaintiffs organized a partnership when they purchased the ticket with the purpose of dividing any prize money won.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 2

    GATCHALIAN VS.

    COMISSIONER OF INTERNAL REVENUE


    67 Phil. 666. April 29, 1939.
    J. Imperial.
    FACTS:
    Gatchalian and company contributed money in order to purchase
    one sweepstakes ticket valued at two pesos (P2) from one of the duly
    authorized agents of the National Charity Sweepstakes Office, and the
    same was registered under the same name. The ticket consequently won
    one of the third prizes with the amount of P50,000. Gatchalian and
    company then cashed the prize check against the Philippine National
    Bank. Gatchalian was required to file the corresponding income tax
    return covering the prize won. The defendant had an assessment against
    Gatchalian and company requesting that the payment of the sum of
    P1,499 to the deputy provincial treasurer in Bulacan. The plaintiffs,
    through their respective counsels, requested the exemption from the
    payment of the income tax but were denied.
    Due to failure of payment of the tax demanded, a warrant of
    distraint and levy against the property of the plaintiffs was made. To
    avoid embarrassment, the plaintiffs paid under protest a sum of P601 as
    part of the tax and penalties to the municipal treasurer and requested that
    they be allowed to pay under protest the remaining balance in monthly
    installments. The request was granted by the defendant with the condition
    that the plaintiffs file the usual bond secured by two solvent persons to
    guarantee prompt payment of each installment as it becomes due. Before
    the first installment was due, the plaintiff's formally protested against the
    payment of the sum of P601 but the defendant overruled the protest and
    denied the refund. Due to failure of the plaintiff's to pay the installments
    in accordance to the bond filed by them, the defendant ordered the
    municipal treasurer to execute within five days the warrant of distraint
    and levy against the plaintiffs. In order to avoid further embarrassment
    and annoyance, the plaintiff's paid under protest the sum of P1,260
    representing the unpaid balance of the income tax and penalties
    demanded by defendant. A claim for the refund of the total sum of
    P1,863.44 paid under protest by them but that defendant refused and still
    refuses to refund the said amount notwithstanding the plaintiffs demand,
    hence this appeal.


    ISSUE:
    Whether or not the plaintiffs formed partnership hence liable for
    income tax

    HELD:
    Yes, a partnership of a civil nature was formed. The appealed
    decision is affirmed, with the costs of the instance to the plaintiff
    appellants.

    RATIO DECIDENDI:
    Under Article 1767 of the Civil Code, by contract of partnership
    two or more persons bind themselves to contribute money, property, or
    industry to a common fund, with the intention of dividing the profits
    among themselves. In the instant case, 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. The
    partnership was not only formed, but upon the organization thereof and
    the winning of the prize, Jose Gatchalian personally appeared in the
    office of the Philippine Charity Sweepstakes, in his capacity as co-
    partner, as such collection the prize, the office issued the check for
    P50,000 in favor of Jose Gatchalian and company, and the said partner, in
    the same capacity, collected the said check. All these circumstances repel
    the idea that the plaintiffs organized and formed a community of property
    only.

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