CONWI vs.

CTA
G.R. No. 48532; August 31, 1992

FACTS: Petitioners are Filipino citizens and employees of Procter and Gamble.
During 1970 and 1971 they were assigned to other subsidiaries of Procter &
Gamble, outside of the Philippines, during which they were paid U.S. dollars as
compensation. When petitioners filed their income tax returns for the years
1970 and 1971, they computed the tax due by applying the dollar-to-peso
conversion. However, they later filed an amended tax returns, this time using
the par value of the peso, resulting in alleged overpayments. Thus, petitioners
filed claims for refund, claiming that they are not included in the coverage of
Central Bank Circular No. 289. Thus, their earnings should be converted using
the par value of the Philippine peso. The CIR disagreed claiming that Central
Bank Circular No. 289 does not speak of income tax.

ISSUE: W/N petitioners’ earnings should be converted for income tax purposes
using the par value of the Philippine peso.

RULING: No. This basically is an income tax case. Income may be defined
as an amount of money coming to a person or corporation within a specified
time, whether as payment for services, interest or profit from investment. Unless
otherwise specified, it means cash or its equivalent. Income can also be thought
of as flow of the fruits of one's labor. The dollar earnings of petitioners are the
fruits of their labors in the foreign subsidiaries of Procter & Gamble. It was a
definite amount of money which came to them within a specified period of time
of two years as payment for their services. Thus, such earnings are governed by
the provisions of the NIRC.