All Expenses Incurred by the Emilio Aguinaldo College in Its Faculty Development Program are Deductible from Its Gross Income

January 21, 1982 BIR RULING NO. 019-82 30-a-1-A 000-00 019-82 University Physician's Services, Inc. 1122 General Luna Street, Ermita Metro Manila Attention: Dr . Paulo C . Campos President Gentlemen : This refers to your letter addressed to the Minister of Labor which was forwarded to this Office requesting a ruling as to whether or not all the expenses incurred by the Emilio Aguinaldo College in its Faculty Development Program are deductible from its gross income. It is represented that the General Emilio Aguinaldo College will conduct a Faculty Development Program which will provide assistance, incentives, in-service training programs and other opportunities for the personal welfare and professional growth and development of the teaching personnel of the school for the calendar years 1978-1979 to 1982-1983. In reply, I have the honor to inform you that business expenses deductible from gross income includes the ordinary and necessary expenditures directly connected with or pertaining to the taxpayer's trade or business (Section 65, Income Tax Regulations). Expenses which are "ordinary and necessary" generally contemplate expenses which are directly connected with and proximately resulting from carrying on the business and must be shown to be appropriate and helpful in the development of the taxpayer's business for the acquisition or pursuit of income or profit (Gancayco vs. C.I.R., C.T.A. Case No. 287, November 14, 1957). The expenses incurred by the taxpayer in its Faculty Development Program are directly connected with or pertaining to its business and are appropriate and helpful in the development of its teaching personnel. cdta In view thereof, the above query is answered in the affirmative. Very truly yours, RUBEN B. ANCHETA Acting Commissioner