Manuel G. Abello v. Cruz

Summary

Partners from ACCRA law firm each contributed P882,661.31 to Senator Angara's 1987 campaign and were assessed donor's tax by the BIR. The CTA initially ruled in their favor, but the Court of Appeals reversed, finding political contributions constitute taxable gifts. The Supreme Court affirmed, holding that political contributions meet all elements of a donation under the Civil Code: reduction of donor's patrimony, increase in donee's patrimony, and animus donandi. The Court found Section 91 of the NIRC clear and unambiguous in imposing tax on property transfers by gift, rejecting arguments that political purpose negates donative intent or that administrative practice created exemption. The decision establishes that political contributions made before RA 7166's exempting legislation remain subject to donor's tax, clarifying the scope of gift taxation under Philippine tax law.