123CIR v.

TOURS SPECIALIST
G.R. No. L-66416 March 21, 1990

FACTS:
A foreign tour agency entrusted to respondent, a domestic travel agency, money
for the purpose of paying the hotel room charges of tourists. Another reason for the
entrustment was to avoid transfer charges from time to time. Considering this
arrangement, CIR assessed respondent for deficiency tax including the gross receipts
of the entrusted hotel room charges.
Respondent contended that the money was entrusted to it as an act of
accommodation and to avoid several transfer charges. The CTA decided in favor of
respondent.

ISSUE:
Whether or not the entrusted money by the foreign agency form part of the gross
receipts subject to the deficiency tax.

HELD:
NO, the Tax Code does not specify that gross receipts from entrusted money is
taxable. Such money does not belong to the entrustee and does not benefit from it.
Further, no law is needed to make such express exemptions
In the case, the arrangement was only done to accommodate the foreign travel
agency. The respondent did not own the money nor did it benefit from it.