Assessment of Common Carriers on an Estimated Daily Gross Receipts

December 8, 1959 BIR RULING NO. 617-59 Mr. Jose P. Lardizabal Certified Public Accountant P. O. Box 147, Cebu City S i r : In answer to the queries contained in your letter dated October 30, 1959, I have the honor to inform you as follows: cdta The policy of this Office of assessing common carriers on an estimated daily gross receipts of P15.00 per jeepney and P30.00 per bus and allowing ten (10) days a month for repairs and maintenance of a unit, for purposes of the 2% common carrier's tax, when no return has been filed by the taxpayer or there is reason to believe that the return filed is false, incomplete or erroneous, had been rejected by the Court of Tax Appeals in the case of Felicidad Samson vs. Collector of Internal Revenue, C.T.A. Case No. 232, decided on June 30, 1958. The decision in said case is already final, no appeal therefrom having been taken by either party. Where the owner of a jeepney is different from the holder or grantee of a line the use of which has been leased to the former (kabit" system), the cost of the jeepney may not be considered as asset of the latter, notwithstanding the fact that in the records of the Public Service Commission and/or Motor Vehicles Office the jeepney appears to be owned and operated by the holder or grantee of the line. No income need be taken up in the books of said holder or grantee except those derived by him from the lease of the line. On the other hand, income derived by the owner from the operation of his jeepney should be taken up in his books. A taxpayer whose gross quarterly sales, earnings, receipts or output exceed P25,000.00 who filed an erroneous income tax return without attaching thereto the certified balance sheet, profit and loss statement and other statements required under section 334 of the Tax Code, as amended by Republic Act No. 658, but subsequent to receiving the corresponding assessment notice based on the erroneous return files an amended return, this time attaching the required statements, is, nevertheless, liable to the penalty prescribed for violation of said section of the law. However, the act of complying with the requirement, although not on time, without previous demand shall serve to mitigate the penalty. Where the amended return shows a lesser amount of income tax due than that appearing on the original return and this fact is verified to be true, the taxpayer can apply whatever excess payment he has made by reason thereof in payment of his income tax for the succeeding year, provided that a written claim for tax credit is filed with the Commissioner of Internal Revenue, or Regional Director concerned, within two (2) years from the date the tax was paid, pursuant to section 309 of the Tax Code. For that matter, such excess payment can be credited against any other tax liability of the taxpayer. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue