Taxability of Sub-Brokers

February 15, 1960 BIR RULING NO. 118-60 J.S. Zulueta & Co. Certified Public Accountants P.O. Box 2405 M a n i l a Gentlemen : I have the honor to acknowledge the receipt of your letter dated June 3, 1959 and to inform you that, notwithstanding your arguments to the contrary, this Office is not inclined to reverse or modify its ruling No. 591, series of 1958, relative to the taxability of sub-brokers. This matter has already been decided by the Court of Tax Appeals in the case entitled "P. J. Kiener Co., Ltd. vs. Araneta", C.T.A. Case No. 102, November 2, 1959. In this case the court said: "The gross receipts received by the petitioner (sub-contractor) from Fortunato Conception, Inc. pursuant to a sub-contract to construct the Gapan-Sta. Rosa Road are distinct and separate from the gross receipts received by latter as principal contractor. While it is true that the petitioner and the Fortunato Concepcion, Inc. are engaged in the same business of contractor, still their individual gross receipts cannot be treated or merged as one for purposes of tax incidence, and their activities for tax purposes are also different." aisadc Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue