Scribd
Upload
25 views

CIR V CA, CTA & ANSCOR

Uploaded by

Jazzelle Sales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
25 views

CIR V CA, CTA & ANSCOR

Uploaded by

Jazzelle Sales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

CIR v CA, CTA & ANSCOR


G.R. NO. 108576, 20 JANUARY 1999 MARTINEZ, J.


FACTS: ANSCOR is wholly owned and controlled by the family of
Don Andres Soriano, who are all non-resident aliens. It’s
authorized capital stock was increased to P2,500,000 divided
into 25,000 common shares with the same par value of the
additional 15,000 shares, only 10,000 was issued which were all
subscribed by Don Andres, after the other stockholders waived in
favor of the former their preemptive rights to subscribe to the
new issues. Don Andres transferred 1,250 shares each to his two
sons, Jose and Andres, Jr., both foreigners.
A day after Don Andres died, ANSCOR increased its capital stock
to P20M and in 1966 further increased it to P30M. Stock
dividends worth 46,290 and 46,287 shares were respectively
received by the Don Andres estate and Doña Carmen from
ANSCOR. Hence, increasing their accumulated shareholdings to
138,867 and 138,864 common shares each.
ANSCOR redeemed 28,000 common shares from the Don
Andres' estate. By November 1968, the Board further increased
ANSCOR's capital stock to P75M. About a year later, ANSCOR
again redeemed 80,000 common shares from the Don Andres'
estate. As stated in the Board Resolutions, ANSCOR's business
purpose for both redemptions of stocks is to partially retire said
stocks as treasury shares in order to reduce the company's
foreign exchange remittances in case cash dividends are
declared.
In 1973, after examining ANSCOR's books of account and
records, Revenue examiners issued a report proposing that
ANSCOR be assessed for de ciency withholding tax-at-source,
pursuant to Sections 53 and 54 of the 1939 Revenue Code for
the year 1968 and the second quarter of 1969 based on the
transactions of exchange and redemption of stocks.
fi
ISSUE: WON ANSCOR's redemption of stocks from its
stockholder as well as the exchange of common with preferred
shares can be considered as essentially equivalent to the
distribution of taxable dividend making the proceeds thereof
taxable
HELD: YES. Redemption of a stock dividend is taxable when the
following concur: (a) there is redemption; (b) the transaction
involved stock dividends; and (c) the “time and manner” of the
transaction makes it “essentially equivalent to a distribution of
taxable dividends.”
The proceeds of the redemption of a stock dividend is taxable
when income is realized through the redemption of stock
regardless of the redeeming corporation’s purpose for the
redemption.

You might also like