Since animus donandi or the intention to do an act of liberality is an The CIR confirmed that the sales transaction over the BLC shares
between petitioner as seller and CHI as buyer is not subject to donor's
essential element of a donation, petitioners argue that it is important to
tax because it is an ordinary commercial transaction negotiated in
look into the intention of the giver to determine if a political contribution is good faith between unrelated parties and motivated by legitimate
a gift. Petitioners argument is not tenable. First of all, donative intent is a business reasons.
creature of the mind. It cannot be perceived except by the material and
tangible acts which manifest its presence. This being the case, donative Later, petitioner received a Notice for Informal Conference (Notice) from
intent is presumed present when one gives a part of ones patrimony to respondent BIR LTS-Regular, informing petitioner that the subject
another without consideration. Second, donative intent is not negated transaction is actually subject to donor's tax.
when the person donating has other intentions, motives or purposes
In response, petitioner wrote respondent requesting for the re-evaluation
which do not contradict donative intent. This Court is not convinced that
of the factual information presented by petitioner and for the cancellation
of the tax assessment shown in the Notice, which was received by
respondent through the BIR LTS-Regular.
Petitioner received BIR LTSRegular a Final Assessment Notice (FAN),
details of discrepancy and Audit Result/ Assessment Notice, reiterating
its demand for payment of deficiency donor's tax.
Petitioner filed its formal protest, however, the same was denied by the
respondent.
ISSUE:
Whether or not MPC is liable for the deficiency donor's tax assessment.
HELD:
YES. Petitioners claim for donors tax exemption has no legal basis.
Section 100 of the 1997 NIRC, as amended, is clear that in case where
property is transferred for less than an adequate and full consideration in
money or money's worth, then the amount by which the fair market value
(FMV) of the property exceeded the value of the consideration shall be
deemed a gift, and shall be included in computing the amount of gifts
made during the calendar year. It is thus, important to determine the "fair
market value" (FMV) of the property sold or transferred, and whether it
exceeded the value of the consideration.
Petitioner alleges, on the assumption that the subject shares were sold
for less than their "fair market value", that the subject transaction was an
ordinary business transaction negotiated in good faith by unrelated
parties for legitimate purposes operate to exclude the subject transaction
from the coverage of Section 100 of the NIRC, the same being a transfer
which is bona fide, at arm's length.
After a careful reading of the bases cited by petitioner, the court find that
the alleged exemption/exception from the donor's tax under the said
provision of law was not clearly established therein.