Delinquency Penalties against Dra. Gorgonio A. Carlos and Leoncio Carlos

No date supplied BIR RULING NO. 232-60 The Regional Director Regional District No. 4 Quezon City S i r : This refers to the internal revenue tax case of Dra. Gorgonio A. Carlos and Leoncio Carlos, Meycauayan, Bulacan involving the sum of P4,588.00 plus delinquency penalties thereon, as corporate income tax for the year 1958 to 1954. cdll The report of our agent who reinvestigated this case disclosed that the properties were purchased by the taxpayers and not by their parents; that they operated the said properties under a partnership; that each brother received his corresponding share in the profits proportionate to the capital investment made by him; and that the taxpayer admitted when interviewed by our investigating agent that they purchased the properties and operated the same under a proportionate sharing basis. Joint-tenancy has been distinguished from partnership as follows: " . . . the relation of joint ownership, a relation distinct though perhaps not essentially different in its practical consequences from that of partnership, might have been the result of joint purchase. If for instance, it were shown that the object of the parties in purchasing in company had been to make a more favorable bargain for the two cascoes than they could have done by purchasing them separately and they had not ulterior object except to effect a division of the common property when once had acquired it, the affectio societatis would lacking and the parties would have become joint tenants only; but, as nothing of this sort appears in the case we must assume that the object of the purchase in the case, was active use and profit and not mere passive ownership in common. (Partnership by Francisco, pp. 62-63) In view of the above findings of Examiners Noracio P. Tagle and the abovequoted authority, this Office is of the opinion that the brothers Drs. Gorgonio A. Carlos and Leoncio Carlos are liable for the payment of the corporate tax prescribed in section 24 of the National Internal Revenue Code. The entire docket of this case is therefore returned to that Office for appropriate action to effect collection of the amount of P4,588.00 due from the taxpayers. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue