On August 5, 1997, Adamson

Co., Inc. (Adamson) filed a request for

reconsideration of the deficiency

withholding tax assessment on July 10,

1997, covering the taxable year 1994.

After administrative hearings, the

original assessment of P150,000.00 was

reduced to P75,000.00 and a modified

assessment was thereafter issued on

August 05, 1999. Despite repeated

demands, Adamson failed and refused

to pay the modified assessment.

Consequently, the BIR brought an

action for collection in the Regional Trial

Court on September 15,2000. Adamson

moved to dismiss the action on the

ground that the government’s right to

collect the tax by judicial action has

prescribed.

Decide the case. (5%)

JR was a passenger of an

airline that crashed. He survived the

accident but sustained serious physical

injuries which required hospitalization for

3 months. Following negotiations with

the airline and its insurer, an agreement

was reached under the terms of which

JR was paid the following amounts:

P500, 000.00 for his hospitalization: P250,

000.00 as moral damages: P300, 000.00

for loss of income during the period of

his treatment and recuperation. In

addition, JR received from his employer

the amount of P200,000.00 representing

the cash equivalent of his earned

vacation and sick leaves. Which, if any, of the amounts he received are subject

to income tax? Explain. (5%)

Under Article 415 of the Civil

Code, in order for machinery and

equipment to be considered real

property, the pieces must be placed by

the owner of the land and, in addition,

must tend to directly meet the needs of

the industry or works carried on by the

owner. Oil companies install

underground tanks in the gasoline

stations located on land leased by the

oil companies from the owners of the

land where the gasoline stations [are]

located. Are those underground tanks, which were not placed there by the

owner of the land but which were

instead placed there by the lessee of

the land, considered real property for

purposes of real property taxation under

the local Government Code? Explain.

A taxpayer received a tax

deficiency assessment of P 1.2 Million

from the BIR demanding payment within

10 days, otherwise, it would collect

through summary remedies. The

taxpayer requested for .a

reconsideration stating the grounds

therefor. Instead of resolving the request

for reconsideration, the BIR sent a Final

Notice Before Seizure to the taxpayer.

May this action of the

Commissioner of Internal Revenue be

deemed a denial of the request for reconsideration of the taxpayer to

entitle him to appeal to the Court of Tax

Appeals? Decide with reasons. (5%)