CARLOS MORAN SISON AND PRISCILA F. SISON, PETITIONERS, VS. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Appeal taken by the spouses Carlos Moran Sison
and Priscila F. Sison from
the resolution dated January 13, 1964 issued by the Court of Tax Appeals in its
Case No. 337, (a) granting appellee’s motion for
execution of the judgment rendered by this Court in G.R. L-13739, entitled
“The Commissioner of Internal Revenue vs. Carlos Moran Sison
and Priscila F. Sison“,
and (b) denying their petition for the rendition of a decision “on the
merits” in the case first mentioned.

It appears that on February
28, 1949, appellants made a written assignment in favor of a
corporation named Priscila Estate, Inc. of several
real properties which Mrs. Priscila F. Sison had previously acquired by donation.  The consideration therefore were 672 shares
of the capital stock of the assignee corporation, the deed of assignment
further stating that the realties were transferred at their assessed value and
that the shares of stock received by the assignors as consideration were of an
equal value.  Reporting such assignment,
appellants subsequently claimed deductible losses in their Income Tax Return
for 1949.

Pursuant to a Bureau of Internal Revenue rule governing transfers
of property to a corporation in exchange for shares of its capital stock,
internal revenue agents took the assignment under study and, as a result
thereof, on June 23, 1952, the Collector imposed on appellants a deficiency
income tax for 1949 in the amount of P41,101.53,
holding the view that, as a result of the assignment, appellants had made a
profit of P257,380.00.  Contesting the
assessment, appel­lants asked for a re-investigation of the matter.  This was granted with the result that, on October 13, 1956, an amended
assessment was issued against them only for the amount of P5,535.02.  Appellants not only pro­tested against this
amended assessment but they also denied the Collector’s authority to make it on
the ground that the five-year period of prescription had elapsed.  Their protest having been overruled, appellants
took the matter to the Court of Tax Appeals where, later on, a decision was
rendered upholding their plea of prescription. 
In due time the Commissioner of Internal Revenue elevated the case on
appeal to Us (G.R. L-13739).

On April 30, 1963,
We reversed the decision of the Court of Tax Appeals
by holding that the right of the government to assess and collect the deficiency
income tax in question had not yet prescribed.

After the record of the case had been returned below, appellants
filed a petition praying that a decision “on the merits” be rendered
in the case (C.T.A. Case No. 337).  Five
days later appellee, in turn, filed a motion for the
execution of our judgment in G.R. L-13739 based on the claim that said decision
had already become final and executory.  On January
13, 1964, the Court of Tax Appeals issued a resolution denying
appellants’ petition for the rendition of a deci­sion on the merits, and
granting appellee’s motion for execution.

Appellant’s lone assignment of error is discussed in their brief
under the following propositions:  (a) that our decision in G.R. L-13739
cannot be executed because it is interlocutory in nature; (b) that since the dispositive part of our decision specifies no collectible
amount, it cannot be executed; (c) that the Tax Court never lost jurisdiction
to decide the case on the merits.

Appellants’ other contention that our decision in G.R. L-13739
cannot be executed because it is interlocutory in nature and its dispositive part specifies no collectible amount, is
without merit.

Insofar as the decision referred to disposed of the issue of
prescription by reversing the order of dismissal issued by the Court of Tax
Appeals, it was obviously final in character. 
It left no other substantial matter unresolved.

But appellants argue that upon the remanding of the case below,
the Court of Tax Appeals was bound to set the case anew for hearing, relying
upon the fact that said court did not pass upon the question of correctness of
the deficiency tax assessment in question when it issued the order of dismissal
subsequently reversed by this Court.  We
also find this to be without merit.

It is not denied that in the Court of Tax Appeals appellants
questioned the validity of the deficiency tax imposed upon them.  During the hearing of the case the court
informed the parties that “the whole case on the question of prescription
and on the merits” was the subject of said hearing.  The government submitted evidence to sustain
the validity of the questioned deficiency tax, while appellants refrained from
doing the same “in the meantime while waiting for the resolution” of the court – presumably on the question of
prescription.  Thereupon one of the
judges presiding the court gave ap­pellants’ counsel
this warning:  “It is up to you if
you want to take that chance.” (t.s.n.,
p. 9; C.T.A. Record p. 115). 
Thereafter, the court dismissed the claim of the government on the ground that it had already pre­scribed.  It is clear from the foregoing that the
“chance” that appellants took was this:  that if, on appeal, the decision of the Court
of Tax Appeals was reversed – as it was in fact reversed – they would be deemed
to have waived their right to present additional evidence on the question of
the correctness of the deficiency tax. 
Stated otherwise, upon reversal, they would not be entitled to have the
case set for hearing all over again in the Court of Tax Appeals in relation to
the question aforesaid.  This, indeed,
must be the necessary consequence of their refusal or failure to present
additional evidence during the original hearing.  The practice of the courts is to try a case
as a whole and not piece by piece, in order to avoid unnecessary delays.

In relation to the claim that the dispositive
part of our decision in G.R. L-13739 specifies no collectible amount, the
following are pertinent considerations.

Section 14 of Rep. Act 1125 which speaks of the “Effect of
decision that tax is barred by Statute of Limitations,” provides that if the decision of the court is that the tax is barred said
decision “shall be considered as its decision that there is no deficiency
in respect of such tax.” Such being the
rule the contrary must likewise be true, namely:  that if the decision of the court is that the
tax is not barred, such decision must be understood in the sense that
there is deficiency in respect of such tax. 
In line with this, when in G.R. L-13739 We overruled therein appellee’s claim for damages, We
did so “not only because they took no appeal from the decision presently
under review, but also because the
collectors’ actuation is herein sustained.” Underlines
supplied; Commissioner etc. vs. Sison,
7 SCRA pp. 884, 886).  The collectors’
contention involved in that case was precisely that herein petitioners were
liable for a deficiency tax in the amount of P5,535.02.

PREMISES CONSIDERED, the resolution appealed from is
affirmed, with costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Teehankee, Barredo, Villamor, and Makasiar, JJ., concur.

Ruiz Castro and
Fernando, JJ., took no
part.