CTA Case No. 2197

DECISION

MZ. Yashington Sycip, eduinistrator of the Estate of Colin M, Hoskins, hes sppealed izom the decision of the respondent vommissione: of interns ievenue deted Lecember 17, 1970, holding the decedent's es- tate subject to 2252,7'4.59 and 9219,657.86 as dew ficiency transfer taxes end penalties amounting to

P4329301 0256

The deceesed, me, Colin M. Hoskins, is en Ane~ rican citizen, 2 resident of the Philippines since 1909, and residing at od banga Avenue, nisniles In April, 1966, Me, Hoskins left for the United States for aedica) checkup and treatment. as a resident elien, he applied for and wes granted Se-entry Pere mit No. 27558 issued by the Commissioner of imnige retion which would expize on -ctober 14, 1966, Before the expicy cate of the said permit, the “ame missioner of lawigretion receivea a letter tron Se Hoskins requesting thet Ais Se-entry Permit be axteaded up te vecember Ji, 1966 because he had been eontinucusly under medical treatment since his arrival » 2997 Dl 1s ULA CAauS WO, 2197 2 in San Francisos, California, U. & A, va Becenber 6, 1966, “2, Hoskins inforsed tne Commissioner of immigration thet, for medical reasons, he is giving up his Pallippine residence effective damary 1, 1967. On Jamary 28, 1967, Colin mM, Hoskins died im San Francisco, California, U. 5. As, leaving in the Phiiippines and the United States of America peal and personal properties. Three (3) days after the death of Mr, Hoskins, the Mureau of Imeigration cancelled the Re-entry permit of said decedent.

On February 26, 1968, Mr, Sycip filed with rese pondent the estate end inheritanee tax returns for the decedent's estate, On March 27, 1968, administrator Syecip filed with respondent the corresponding anended estete and inheritence tex returns, After the investigetion and examination of the decedent's transfer tax returns, Revenue ixauiners Umiral ?. matic and Candido Vergel be Dios reported and recom mended to respondent the issuance of deficiency estete and inheritance tex assessments against the administrator of the decedent's estate. On September 30, 1970, deficiancy transfer tax assessments were issued by rea- pondent calling for the payment of P233,703.39 and P219,657.66 as deficiency estate and inheritence taxes, computed as followss “» 298

DC 15108

CTA CABS KO. 2197 3 Keal properties ee ee ee a a es ee) Personal properties “ao mm em eo Llatangible _—- assets «<= « -—_ =» «= -- ay earns am , 992 o* tion meet = = -~ = %7%,245.68 tot tones > 22S Leses state tax nnen em oe © = & @ Net hereditary estate subject to ener inheritance tex « < + = + = = = = = P4,330,152.25 ‘4° pate eS BbeAilOR di, SUAER Lilly Tah John 0. Hoskins \ephew P19,729.37 « Dean Soskins ° 19, 337 sebert U. Hoskins 35a" 4 9 98 John Hardy Noskins =” 127.95606 ie aa Constance doskins ” P2049 seredita . ote

Robert Mee Rae Hoskins " 9 5015

ohn - 6 > 5015

Zlizabeth Noskins Grandniece 95015

Gilman Hoskins " 7 945095

Hoskins s 9 Pr 5015 Keith Hoskins . pode 15 deskins a ose Judith Ann Rosking yd Md 9 Pt5e15 Berbara Jo iioskins ” rr) Marth Jean loskins Ld 9 P5015 geret Clain Hoskins . sooo te Sarah Jane Hoskins . 9 P5015 Peul Dean loskins “ sRre te Katherine Lee ee ‘ ” os 9232032 a Javier = 000. 500.00 bomestic Servant vonretae Trusted @aployee 1 1,400.00 ng Selerio teussee Smployee aeeee : Rogello Selerio =... 00 10.

Domestic Servant 1,020.

Total inheritance tax ,

=BISssartSsse=

DECISION

h a ‘ ‘ Peers neta. = 7” SERS Inheritance tex «<--=s+<++= 16,785.92 0s

30) Sureharge on 99467010 = = = 3355

Surcharge for ia ct on - P16, 956093 pat a ahs 867.85 trea Jamary 28, 1969 to" hovenbor 28, 970 osek @ @& » « 1,695.69 + nly Saree? Ere “ 1969" YEE. os 4,181.35 ; 1, 1969 to Ostaber cna te payuent ~ = « « ml 5 Inheritance tax orth. oaa PF ’ ® Least paid » to ted Jamary 22, 1969 « « « «» + _ 28,361.69.

Deficiency

inheri penalties «<«<«e«« #«w+« 2.2h20657.36.

The foregoing assessments were contested and disputed by petitioner by alleging that, prior te the death of Mr. Hoskins om January 26, 1967, his me 300

Dac ISILON

CTA CASE NO. 2197 5 legal residence was already established in San Franeispo, California, U.i.4. Yor estate and inhe~ ritance tex purposes, petitioner contended that the intangible personal property of the late Mr. Hoskins lecated in the United States does not form part of his gross estate in the Philippines. The said pro- test was, however, denied by the respondent Comais- sioner of internal Reveme, Honce, this appeal. The principal issues submitted to this Court for resolution are the followings

(1) Whether or not the late Colin M, was a resident of the bo section lt yA. Fy b ——————ao sents were predicated on petitioner's failure to inelude in the decedent’s estate and inheritance tax returns the intangible personal properties of the said decedent located in the United States, namely: (1) Savings Account, (2) Commercial Account, (3) Treasury Bondsy and (4%) Accrued interest amounting to P1,269,216.66 in all.

Respondent Comuissioner of Internal Kevenue

vigorously contends thet at the time of Mr, Hoskins death on Jamary 28, 1967 in San Pranciseo, Califor-

DSC ISiON

CEA CASE NO. 2197 Bia, he was a resident of the Fhilippines and, there- fore, hie intangible personal properties abroed should be included in his gross estate in accordance with Section 83 of the National Internal Kevemme Code, ‘am relation to Section 122 of the same Code, the pertinent peBtions of which read as follows:

Section 88, - The vee ine of the es ° decedent shall be de by including the vae ee ee ee SS ee See © oe eee perty, tang or intangible, wherever aitua exe real property situated outside the ppines « Por estate end inheritance tax purposes, the term “residence” is synonymous with "“domicil” and that the two terms may be used interchangeably. (Collector of Internal Keveme v,. Domingo de Lara, et ale, 102 Phil, 817; Velilla ve Posadas, 62 Phil. 62%). However, a man can have out one domicile at e time, (Aleantara v. Secretary of the Interior, { BETA no. ane?

7 61 Phi. 499). It is,therefore, indispensable for this Court te determine whether the late Colin Me Hoskins wos a resident of the Philippises or the United States st the time of his death on Jenuary 28, 1967 in order te decide whether oF nct the im tengible persone] properties of the said decedent located in the United States are subject te Philippine estate anc inheritance taxes.

| The essential elements of domicile or “preemi- nent headquarters” are twof olds (1) physical pre- sence known es the fectum, residence in fact,” coupled with (2) the intention te make the plece ef residence onels own home, known as the anigua. There must be physicel presence; intention alone is insufficient, as is cise physics] presence without intention, In brief, in crder to acquire a domi-e eile by choice, there must concur (1) residence or bedily presence in the new locality, (2) an intention to remain there and ‘3) an intention te avandon the old domicile. (Gailego v. Vera, 73 Phil. 453).

' The evidence adduced by beth the petitioner and the respondent as to the residence of Celia M, Hoskins at the time of hie death on January 28, 1967 fall within o pattern ef contradiction.

Lio slOM 8 As the deceased has resided in two pisces, tre Philippines and the Jnited Srates, his intention as the cecisive factor in detenst ning © feoce at the tine of hie desth. Intention is, >°f course, @ subjective condition of stete ox mind, There is, however, sufficient authosity to the efiect thet more evidence i5 requinec :e ssieblish 3 Shenae of vomicile fron ene pasion to ancthere (a, sevle, ~ontlict of Baws, p. 245 (1935), du Bois, The *ignificance in Conflict cf Laws ol the Distinction between Interstate end Intesnstional trensactions, 17 Minn, ist, 363, IT] (1935). it is the submission of petitioner thet the lete Colin m Hoekins eceuired a comicil in San Prencisco, Californis, and chestusd hie chilippine domici] prior to his Gesth on January «é, 1907 besed om the following facts ana circumstances, to wits

(1) Om Gctober 5, 1907, queee Felix Me vomingo of the UFi of manile ssued an Order in Special Pxccescings No. 66369 wherein it wes statea, others, that at the time of death of = ive Hoskins on January 46, 1967, he was 6 resident of San Francisco, 1967, he wVe®ere!

(2) Me, Remon Aranzeso, decedent's confidential assistent, bookkeeper and over~ ell supervisor, testified in court thet the late Mr, Hoskins purchesed in 3964 «4 con- a " 304 CTA CaSé NO. 2197 doninaiun apartment Ne. 16+] at the Ha- = Hotel, San Francisco, Califer- ay

(3) Atty. rahe J. “Abbs in his affidavit du Gated abroad sta- ted that the gee Me. “oskine bewght on Cetober 1], 1964 a larger apartment of the Hemilton Hotel, Sen Francisco, Cae liforni a;

Pee ric Seer kine notifi y thet he wes vacating hie residence at 63 Mange Avenue, Manila, Uncez the lease egreement, the lease is terminated four months efter notice to the landlady, that is, et the end of February 1967;

(2 ao" cetea ad ies "a kine wrote another ft \ixh. MB) steq- t thet Re intend to move to a el. He ture ther stated that on » Dr.

WILBUR anc Ais associates see him again to edvise him whea it will be pru- dent to return to Menila. the return ef Hoskine to Manila, may be orief or per- haps not at all de hg upon the physi- ciarisiadvise, Hoskins further stated;

‘Saget MeetiMfstesd Rs Ss," kins steted in RKhis letter thet Or, WILSUA had visited him Ho roars 4 (November 6, 1966) end expressed grea ig ey over his improvement than et > or ae dur the peet 6 months. $ weake ness is gradually disappeering, *e. Hos= kins grag bo De, WILBUR | @s ‘oot down ne sug- estion because the airplane trip was 80 atiguing. He expressed optimism thet ia 1967 he may be able to hit Manila agein \ixh., ©)4

D&Cl S1UN

CTA GASE N.. 2197 10 Ps: On mt Hose 4 ship of Colts Heakine and ees, and owner- of GM. Hoskine and » inc. to the ficers and emoleyees of the said company, pehinrarer ly winding up his business inte- rests ia the “hilippines preparatery to the abandonment of his Philippine domicil,;

coc ARMS Re adhe st kine wrote fn Se ~~ eS a! and they suggested fe LORENZO, Soabina? former cock, come te the U.S. as his visitor for 6 months visa;

ee ae oe sent a letter to the ssiconer of Inmi sation yt the change of his domicd from the “hilippines te San francisce, Ce Lifozniag VeSeAc, Dy Beturning the Re- entry Permit which was already extended up to December 31, 1966; and

(20) Ga Golin M. Hoskins execu a | Stating that hie damicil was Sen Francisce, Celifore mia, UeSsAc To counteract the evidence adduced by the pet;- tfioner and in sustaining the view that the late -o- lin M. Hoskins wes a resident of the Philippines upon his death on January 28, 1967, respondent based Ais conclusion on the following facts end circumstances, namely:

(3) Colin. ie gg bern in Ame- rice on duly came to the arene /*- ‘Su iy 1809 at the tender age of 19 and resided thezein conti- nuously fox 57 years including the ne- morable period of the Japanese occupe- tion;

Deci Si GN ~

GTA CASE NO, 2197 pe | - (2) Mee Hoskins engaged in busi- ness ia the Philippihes ae a reelter *Y being an arganscs ard incorperator Selle Moskins & Cés, InGe, Realty investments inc., and Parsdine ta inc, with offices st 306 Chey jee Dasmarifas, Menila, and was weg Ae cally the sole proprietaz ef the first-named corporstion and Execu- tive Vieo-President of the other two (2) corporations;

3} As @ resident alien of the in 1966, Mr. Hoskins’ indie income tax return for the sane .yeer showed e gross insome of £162,9°2.87;

() la a Mx. Hoskins left the rs) agen Cali- fornia, for. medical check-up anc trecte ment fox an ailment which tusned eut la- ter to be cancer, “is intent toe return to the Pnilipoines is evident from the fast that, before his departure for the United States, he obtained from the Bue reau of lamigretion @ He-entry Sernit which would expire oan 5) Before ¢ 2906, Mr, Hoskins made bd trips to the United States brief stay Capes Pe LL end sutematically returned ¢ gh a death conan up with ‘ecto Rta i, to kins execu 5 and teste- ment stating, others, thet he aes ales 8 to pay ot, ee ee = his laet illness, and his funeral ex- pense s;

7) Ouring his old age, Mr. Hoe sia bechelor, idved in s,house 603 pt ys Wanila, maintained therein « compl] household staff, namely:

BECLSLON

CTA CASE

NO, 2197 le Luis Escleteo, house servant; Aveline ~——t Bie, cheuffeur; Lorenze Sundian, cook; and a gardener;

_ 48). ie, Hoskins loved te be a resident of the "hilippines because of the heartfelt kindakess and tender care extended to him at ae 42) Filipinos during the critical oug period of the Japanese oecu- petien of the i my on the occacion of “orld Wer il. s, he wrete! “Artemio he nodriquez, ettczae ee 2 ee end cne-tine employee of Sells Ho & & Con, whe at pere sonal rhek handled my personal affaize b pe arranged for my confort the out the panese occupation of the Philippines,” end Luis Esclete, ay gry house servant, whe entered ry Bg org Nevember 1941, but who despi at fact teok care of me leyaliy and at great personel risk thr the ag ag of the Philip- pines.”{ixh. 2, pp. 79-80, BIA Aec.);

{9) On September 6, 1966, before the expiry cete of br, Noskins' Ae-entry Permit on he requested the Philip- OF ebaRae Ata 2208: iamigzetion tor its extension up to Vecenbar 1, 1960 because he needed more t or cal treatment ian California; end

Heskine*

He ctyes atte Bite lawyer, Atty. ey ¢ wrote e letter to petitioner, “, Washington Sycip, re- minding him in gheut the neseees ty of return- ing Mr. Hoskins’ He-entry Permit in order "to avoid double texation.” Geid counsel further whether or not the Allied Travel Corporation, Mr. Moskins’ trsvel a hed surrendered the seid e-entry Permit which is indispensable te evoid double toxatica.

DECI SLGM

CTA CASE NO. 21970

EAST LSSus:

The very meaning of domicil is the technically preeminent headquarters thot every person is comped- led to heve in order that certein rights and duties that have been etteched to it by the law may ve determined. Taxes flow from a domicile established for these purposes. The distinction is highly important, paztigulazgly in cases 19 which a dece- larstions by the decedent may supply evidence of iatention, they may be shown to have been jng- pized by a desize to establish « pominel residence for tex purposes different fron domicile in fact. In such circumstances “the gctual fact as to the; plece of residence and gecedent's seal attitude ana_intention with respect to it ae disclosed py his entize course of conduct exe the contzoliing factors in acertaining bis domicile.... when one intends the fact to which the law attsches conse- quences, he aust abide the consequences whether intendec or not.” (Paul, Pederal istate and Gift Taxation, Vole 1, pp. l/l-14e and 106-107; under- scoring supplied).

D&C] SIGN

14 From the conflicting mass of evidence ed= duced and relied upon by the opposing perties, we are Constrained to hold that the late Hoskins M. Coline was s resident of the Philippines at che time of his death on January 26, 1967 in San Frencieco, California. ‘hile we have no doubt that the late Mm. Hoskins hed established a p9- minal zesigense ebroed for tax purposes, his domicile in fags semains to be the aameenee | at the time of his demise.

The Philippines is “re, Hoskins’ domicile of choice. This is cleerly manifested and ref- Aeched by bis entixe course of conduct. in the iizst place, he hes resided in the "hilippines con- tinuouely for fifty-seven ‘S7) years. Second, he @@geniz®d and incorporated three \3) realty corporations from which he gexived a substantial worlyincome. Ghitd, on January 14, 1900, after living end residing here for 57 years, he execu- ted his lest will and testament stating, among -others, thet he is a resident of the Philippines. Egurth, during his lifetime he made reguler trips to the United Stetes and, after e short stint there- in, he inveriebly returned to the “hilippines ex- { * 310

DECI SION

CTA CASE NO. 2197 15 cept when death caught up with him abroad. Fifth, duxing his old age, he lived and resided coafortab- ly at Menge Avenue, Manila, and enjoyed the conve- nience and services of a complete household steff such as servant, chauffeeur, cock, end gercener. Bixth. he was very well pleased end impressed by the services and sacrifices of two nal Fili~ pines, a lawyer end a servant, who had helped him immensely during the dangerous jaend dark period of the Japanese occupation of the Philip~ pines. Seventh. when he left the “hilippines for San Prencieece, California, in “oril 1966, mz. Hoskins first secured from the Sureau of immigration a Ae-entry Pergit which would expire on October 14, 1966 = a clear showing of his intention to continue and retain his Philippine domicile, Ejght, before the expiry dete of said permit, he requested the “hilippine lmmigretion commissioner for its extension up te becember 3). 2266, thereby corroborating and cementing his reo solute end uneqpivocal intention of continuing and retaining his Philippine domicile. Ninth, on October 25, 1966, he expressed in a lettez to Mf. Kamon Aranzeso his desize to return to Manile 311

DECI SION

16 and move to e hotel, but hie return to the “hilip- pines will depend upon his physician's advice. “ni finally. on November 9, 1966, he expressed in another letter hie desire to return to the Philip~ pines by suggesting disectiy te Dr. WILJUA his intention but the said decter ebjected an the ground that the airplane trip back to the Philip- pines would be tiresome for Hr, Hoskins.

Qn the other hand, petitioner alleged that:

(l) me, Hoskins turned over the ownership end management of &.M. Hoskins © Co, to the officers and employees thereof in February 1964; (2) he bought in October 1964 a small and later on a bigger condominium apartment of the liamilten Hotel in Sen Franciece, Califernia; and (3) on Ustober 25, 1966, Mr. Hoskins notified his landledy that he is vaceting his rented residence st Mange Avenue, Manila, at the end of February 1967, The said allegations and facts have no per= suasive bearing on Mr, Hoskins desire te abandon his Philippine domicile because, even before the expisation of his Ne-entry “ermit, he manifested explicitly his consistent desire te return to the Philippines by requesting the Philippine 4m- migration “ommiesioner to extend the said fe-entzy 342

DECISION

GTA CASE NG. 2197 17 Pemmit up to vecembex 31, 1266. Moreover, on November 8. 1966, a date very much later than the date stated in the three instances cited above, iz. Hoskins suggested te Dr. “Alber his unflin- ching desire te return to Manile during the end of the same month, Thereaftex, on pecembex 6 and 14. 1900.

Mz. Noskins requested the Philippine Immigration Commissioner to change his domicile from the Philippines te the “nited States; end he exe- cuted a “odicil wherein he stated that he wae a resident ef the seme place, respectively. These facts and circumstances, comparatively speaking and made just over a month before “r. Hoskins died of cancer on JanuarfP 26, 1967, cannot pes- sibly counteract and overwhelm the massive end persuasive force and effect of Tespondent's evidence that the late Colin #, Hoskins hed established « domicile of choice in the “hilip- pines.

Gur view is further strengthened and sup- ported by the fact thet, siace “©. Hoskins ar- rived in Sen Frencisce, Califernia, in “pril, 1966, he wes under constent medicel observation, care, and treatment. in facet, the attending physi- " 313

DECI SICH

CTA CASE Noe 2197

18 cian admonished “c. Hoskins that the facilities he was getting fo® the treatment of his ailment were not available in Manila. (ixhe. 6 and 6A, Pp. 8263, BIR Rec.), That sccounts for the pxrelonged stay of tr. Hoskins abroad. But a chenge of Philippine residence far the purpose ef benefiting one's health abroad does not jose facte effect a change of domicile, Thus, it was helds —— guensatinee’ SaaS Banta © @ purpose of benefiting one! one's health does not usually effect a Shesge of comicil, even th the actual time spent in the new residence ise long and the person involved is aware thet his illness will prevent his ever return- ing to his domicil. (American Jurie- °* Thet is net all. in the Lavestigation cone ducted by Sevenue (xaminer Unizal #, Matic to ae- certain the genuineness of the signature of , Hosking appearing in documents signed by him just over a month before he died, “©. Aamon Aranzaso, confidential and trusted asaistant of the ssid decedent, showed the said revenue examiner « bundle ef letters, ixaminer Matic found among them a letter of “tty. Finley Vibbs, dated Decen- bes au, 1966, addressed te “zr. weshingten %ycip

DECISION

GTA CASE NM, 2197 19 inquiring — the lattex whether or not “x. Hoe kins Re-entry Permit hed been returned to the Bureau of immigzetion. “, Gibbe further stated in hig letter that the return of the said nee entry Permit wes necessary to avoid double taxa- tion. (Pp. 163«166, t.8.n.)

Examiner Matic further teetified thet Mr. Gibbs* letter of December 2“, 1966 was forwarded by Mr. *ycip to Mr. Kamon Aranzase who was asked to handle and take care of the return and cancel- lation of the Re-entry Permit in question. After all, Mr. Avanzeso was 8s reliable end trusted as- sistant of “, Hoskins.

yi testimony of Hevenue Examiner Matic was roundly assailed end objected to by petitionex's counsel as hearsay and that the best evidence rule would require the production and presenta- tion of the very letter of Mr, Gibbs to Mr, *yeip. Taxation, however, is a practical matter and any relevant evidence dealing on tax avoidance can- not be ignored and dieregarded completely by the Tax Court on the besis merely ef procedural tech- nicality. This is so because the proceedings in the Tax Court are act governed strictly by the technical rules of evidence. (See. &, ep. Act NO. 1125).

DECI SIN

CTA CASE NO. 2197 <0 In the letter of Mr. Hoskins to Me, Arane zeso cated November 30, 1966, it is te be noted thet the letter was informed by the former that the services of the law firm of Gibbs end Gideon aa legal counsel ef “cr. “oskins were availed of. Not long thereafter, specifically on December 6 and 14, 1966, Me, Meskins, in a sudden reversal of his consistent intention of .etaining and continuing nis Philicpine domicile, made 2 ree quest for the cencelletion of his Re-entry Per- mit and execeted a Vodicil stating that he is a “resident of Sen Frencisce, California.

It appeers te us thet Me. Hoskins’ request tor the cancellation of the Aewentry Permit end thé execution of @ Codieil just over a aenth bee fore he died of cancer, are nothing more but feeble attempts te establish « nominal residence in the United States of Americe for tex eveidence pure POS@S, Accordingly, we held thet the late Colin Mt, Hoskins was domiciled in the Philippines at the time of his death on January 28, 1967 end, therefore, the deficiency estate and inheritance taxes assessed by the respondent ~omaissioner of Internal Kevenue against the decedent's eatate are validly and legally made.

+ 816

DECI SLON

CTA CASE NO. 2197 SEG SND 1s Es neependent contends that the S& freed sure charge, included in the deficiency estate and ine hezitance texes assessed segainst the petitioner, was not contested during the edministrotive stage ef the case ez in the instant petition for review, It is new argued thet, since the jurisdiction of the Court ef Tex Appeals is purely appellate, it has no jurisdiction over the uncontested assese~ ment of the 50% surcherye imposed by the respon- dent Cosmissioner of Internal Revenue.

The odd and novel theory advanced by the said respondent is unteneble. Under Section 7 of Republic Act No. 1125, this Court has exclu- sive eppellete jurisdiction to review by eppeal “decision of the Commissioner ef internal Aevenue in ceases involving disputed SSs@ssmente, XK Xx penalties imposed in relation therefo, xx xx oz other metters arising ander the National In- ternal Aevenue Code xx xx.* Coneequently, when petitioner ijeputed the entire deficiency estste sc Lphexstanee tax essesenents es evidenced by Exhibit ““", this Court acquired jurisdiction over the issue of the SOK froud surcharge, » 347

DECISION

22 Fraud cannot be presumed. ‘Section 1 of | the Revenue code autherizes the Commissioner of internal Sevenue to add tothe estate and inhee gitance taxes due on the tranenission of the de- cedent's estate a surcharge of Sue of Its amount im case @ falee or fraudulent return is filed. But fraud must be proved by clear and convincing evidence amounting te meze them mere preponderance ef evidence. (Yutive Sons Hardware Co. ve C.TeA. and Coll, of Int. Reve, Ge. No, Lo 13203, Jan. 28, 1961, I ScRA 160), After all, it ise « settled jurisprudence thet tex assessments must be based om fects snd net on presumptions. (Cell. of Int. Nev., vee Benipayo, et ale, 4 SRA 182). | During the hearing of this caee, respondent failed to edduce any evidence of fraud or willful intent to evade the peyment of the estate snd in- heritence taxes due on the transmission of the de- cedent's estate. in the circumstances, we held that this Court hes jurisdiction over the issue involving the 5Gé fraud surcharge. we find and held, therefore, thet the imposition thereof in the inetant case is clearly without eny justi-

DECI LON

CTA CASE NO? 2397 fieble legal basis.

As to the compromise penalties ef 715.00, 750.00 and £50.00 for petitioner's failure te file the required notice ef death, late payment of the estate tex, and late payment of the inhe- ritance tex, respectively, suffice it te say that respondent does not have any power te im pese e compromise penalty without the consent of petitioner. (Coll. of int. Rev. v. U. ST. et ale, Ge. Noe. im11274 and i-11280, Nev.

28, 1956; Coll. of Int. Rev. v. Seutista ot al., GeA. Nes. L-12250 and 112259, May 27, 1999; Philippine internationsh Fair, Ince ve " Goll. of Inte Reve, Geils Nes. 1912928 and 12932, “Maxch 32, 1962), The imposition, therefore, of the compromise penalties in this case is bese- less and illegal.

from the transmission of the decedent's estate the tote] amount of 7332,814.27, computed se follows sotete Sex “ep eewenecencoune F 196,764.51 for late payment on P24, “seneenee 1,2 a 68 16 monthly interest 724,133.65 from “ct. 28, 1968 NOVe | 20, WO ee scees 3,137.37

DECI Si GN

CTA CASE MO, 42197 24 1/2 monthly interest on 7121,396.86 fran Oct. 28, 1968 to Sept. 31, 1969 «aw ewan nncnevnseeen 6,069.84 1A monthly interest on 7121,396.86 from September 1, 1969 te Cote 4.

Estate tax and penelti oene Ff Less, smount paid xscuRe 3436221 dated Oct. 28, 1968 ------ _ 4)atats00. Deficiency estate tex and tlege« «sn s2aenesenneve £A11s228,20 inheritence tex @ «+s 2022+ © 164,788.72 for i ris.9se083 956. -- oe o nas < a @ 647,85 ls monthly st oa 716,956, from Jane 26, 1969 te Nov. - 1,695.60 Wisen bay 180h Se nayerai/ee 428.28 rom Jane :

y i wig 2 on By ogg Inhexitence tax’ end penalties - + - 0a Total cS 3 tate and ine c*ind' penalties 2 3zsiMdg7

WHEREFORE, the decision ef the respondent omnis sioner of internal sevenue appeeled from ie modified. The deficiency estate and inhe~ gitence taxes together with the Se surcharges and intereste sasessed by sespondent against

DECL SiON

CTA CASE NO, 2197 23 petitionse are eustained and upheld; while the 5G: surcharges end compromise penalties imposed by respondent sre hereby cancelled snd declared to be without any force and effect.

BS CADEALD, quezon City, December 18, 1975.