Mindanao Bus Co. v. City Assessor Digest

G.R. No. L-17870 29 September 1962

Facts: Petitioner is a public utility company engaged in the transport of passengers and cargo by motor vehicles in Mindanao with main offices in Cagayan de Oro (CDO). Petitioner likewise owned a land where it maintains a garage, a repair shop and blacksmith or carpentry shops. The machineries are placed thereon in wooden and cement platforms. The City Assessor of CDO then assessed a P4,400 realty tax on said machineries and repair equipment. Petitioner appealed to the Board of Tax Appeals but it sustained the City Assessor's decision, while the Court of Tax Appeals (CTA) sustained the same.

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Issue: Whether or not the machineries and equipments are considered immobilized and thus subject to a realty tax

Held: The Supreme Court decided otherwise and held that said machineries and equipments are not subject to the assessment of real estate tax.

Said equipments are not considered immobilized as they are merely incidental, not esential and principal to the business of the petitioner. The transportation business could be carried on without repair or service shops of its rolling equipment as they can be repaired or services in another shop belonging to another
.