CTA Case No. 4201 (Decision)

REPUBLIC OF THE PHILIPP INES COURT OF TA X APPEALS QUE ZON C ITY A. SORIANO CORPORATION, Petit i OnEH" , -versus - C.T.A. CASE NO. 4201 COMMISSIONER OF INTERNAL REVENUE, - - - )( .... - - - - - - - Respondent . ~ ~ D E C XS X0 N This is a petition for refund of al l eged ~ xc ess t ax payments b y petitioner in the a mo un t of P273,876. 05 for the year 1985 and P1, 126,065.40 for th e year 1986 or a total amount of P1,399, 941.45. Petitioner arrived at the foregoing amount in t his wise: Prior years's exce�s income ta~ p~yments P3,016 9 8 41 . 00 <E xh . A) PlUS I Taxes Wit hheld on - Interest P 255,864.00 a.t.a. _~.~.9J...9..9_ A> ls...Q.�.~, 2 4 ~ 0Q <Exh. ~en t a 1 !I' etc. P4,085,085 .00 Le1s1 I nc o m@ Tax P2, 620,347.00 1981 tax cr dit claimed in CTA CaBe No. 3964 1~lj~~~~5 ~~.-EU 1, 208 . 95 P 273, 876.05 <Exh . O> Excess tax pa ymen t

DEC I S I ON CTA CASE NO. 4201 - 2- Taxe s Wi th h eld by _J. 1_1 2~s.. O.f?.~J0._40 <Exh. C ) withholding Ag~ nts ~�~-' 3~~-' ~ 41 .~. ~.~ To tal excess t a x payme nts Pet i t io n er' submitt' e d its e vid e n c e dtn ' ing th e b'ic.\1 , to wh ic h t' e s pont1f�nt d id n ot in te t��p ose an y obje c tion to t h ~ir adm i s s i on e x ce pt a s to t h e p ur pos es -For� wh i c h t h e y are offe t~ e d. Res pond en t did n o t pr~se n t n y e v i d e nce for his cas e and s ub mit t ed the ca se for d ec isi on b a sed o n t h e pl ead i n q s and � �the ev:i. r-I PTlC(;'. poi nt s out t h at � I n h i s me m<H' a n tl u m� t ' e s pond e n t t h e a mrJ 1.1 n t o f t�' epr' esent i ng t a >< e s withh e ld f r o m incom e s hould n ot b e in cluded in comp u t ing t h e in c om e tax fo r 1 985 s in ce it is "evid e n ce d by t he Stat f? men t of Final Withho l d i ng Tlii\ x On In ter' e st In com e" <E x h ib it A- 4) ex ecut ed by th e wi t h holdin g a g e n t P a p e r I nd u s t r ie s Co rpo ra tion o f t h e Philippi n es (P I COP ) II . This seemi n g e t' ror , h!JirH~v !~ r' , is a decp.1ate ly e x plai n e d by pet j. tioner-� , thu s: "x x x t he i n �te l'' e s t in c ome o f petition et' on its sha re ho l din g s in P IC DP Debentul"' e bo nd was i n c luded a s p at' t of i t s g r'os s i.n co me <a s C<'\\n a lso b e see n in S c t1 e dule 5~ In t er�es t Not S t.t bje ct to Withho l di ng Ta><, of E xh. A> . x x ><

DECISION CTA CASE NO. 4201 - 3- "In the pt ' P[1tn�� ation of t h P 1'385 ann 1.1a 1 '[1 F~ ( r 1w o mP. Ta x He t tw n > o f p e tition e t� , tl1e intet� r> s t inromP nn the PICUP dehentm � e honrl F1mount h 1q t o P 1, 705, 7E,(l. 00 wac; 1 n?rl v et' tP~lt ),_ y_ i nr' l ucl ed a s pat' t o f 3 t ~; g t ' o c:; s i n c.� o mP. e v e n i f i t should not be included anymore as it was ah'eady St.lbj ecte d o a final withholding tax of P25r::-,854.0(l <Exhibit A-- 4, No. 1 & No. 2). Since thf.' intet� est i n c ome of P1 1 7)5,750.00 <Ext-1. A-'+, No: 1 & C::> wa s inClUd d laS p C:\t't Of the QY' D SS income, l og� c::a lly, the Sllp poset1 ly fina l wi thhold"ng tax of P255,B64.00 shoul d also b~ inc lud ed as part of domestic tax t:l'" ~H 1 in th '38""' IT n. in Ot'd er� that the inter t ncom wi ll n t be s 1bjected to tax �wic.,, th at is, fin P. wi hholding tax on t l fi! hand a nd 'Ot'po t'at e income tax on the o her, Thi s eHplain s why de s pite the tEH" M '' final wit hh oldinp tax ", this t ax wi t h h e d 1-'1 �""~ s s t i l 1 i n c 1 1.1 d e d a s pat��t of the t" . )< ct' ~;~ d it . " l s o t al<e exce ption to the p robat:i.v _ V f!.. o f P.vidence of p etit i onet' pertaining to a testations by wi thholding agents on taxes withheld ft'O ITI petitio n et' , Exhibit C-4. 0 f f i c i a 1 B R F o t' ms 1 7 '+ 3 and 1 7 4 3. 1 s h o u l d h a v e be en '�' s e ti and s 1.1b mi t t e d t o t h e But' e au of Intet'na l Reven1...1e. A statem ent Ot' t~eturn in official form executed by t he withholding agent is thought to be the best evidence to prove the withholding of the tax. In the light o f the course respondent ha s chosen to prove his case, the approach ttwns out short. In a vet' Y t~ e ce nt case <Citytrust Banking 300

DECISION CTA CASE NO. 4201 - 4- Corporation vs. Co11111 i s5 i onPr of Internal Revenue, CTA Case No. 409 9 , Ma y 2 8, 1 '39 1> we concluded, under si milar circum s tan c es: "Respondent c:l i rl not object to the e >< i s t en c e o f s t at e men t s and c e t'' t i f i c at e s which were offered by petitioner as proof of the withholding taxe~ but too~< exception to their contents and purposes. Despite said t~ese t~vati on, up until the submission of th is case for dec ision, respondent was not heard t o complain abo ut t h e v e t ' a c i t y o f t h e con t ent s o f t h e s e d o cu men t s o t' e >< h i b i t s n o t' ha s i t shown any it'' t'eguJ.::n�� ity in t h e same which will taint t heir rel iability or sufficiency as pt' oofs of the t a><es withheld despite the fact that it is well within theit~ competence to do so. Respondent is th et'eb y considered to have ad mitte d the truth of the contents of these exhibits. Hence, those amounts of withheld taxe s which are supported by cot'responding state ments ot' cet'tificates of wi thholding taxes admitted in eividence s h all be allowed as ta>< Ct' edits. 11 Nor does the failure of respondent affect only the subject of 1'3f.\5 taxes. Against the claimed deductions by petitionet' fot' 1'385, which it supported w ith tax t'e tm' ns as evidence, t'es pondent could only give out the perf unctor y resistance such as that "mere allegation of net loss does not ipso facto merit a refund 11 � But respondent for his part, did not present any evidence that would have �disputed the cot'rec tness of the tax retut'ns and 30.1

DECISION CTA CASE NO. ~201 - 5- other~ mater' ial f act s <Citytrust v. Co��issioner of Internal Revenue, supra). As so reitera t ed in an e a rlier case (A. Sot'i a no c 1�n Ca s e No. 35'34) the pet' tinent par' t o f 1-'lhi c h we fi n d apt to be quoted anothet~ time, "The c ase befo t' e Us hat' dly pt' esent a g t~ i p p i n g q u e s t i o n o t' t~ e q u i t ' e a t o t~ t ut' e d t ' at i o c i nat i on . f:.) s t h u s s h own t h e bas i s for the claim s are not short of specific support in term s of tra ctable data openly laid and fully d isc losed. Going by the t'ecot' ds, � petit i on e r� ' s income tax r' eturns for the sub j e ct t a xa ble year s have shown lo s ses and e> >< cess i n co me t a x payment s . Re s ponden t poi nts to no fact ual er~ t' O t' S nor superfluiti es wh i ch need be abridged. X X X. "We see no t' e a son and none is vouchsafed why these simple cases whet~ e fact and fabt' ication c':CH'e no longe r~ indistinguishable, should remain c u t~iously unpet' tut' bed. It may be necessary to repe at what thi s Court said in what so pl ai nl y a pply to the cases at bar~ that, "But i:I S s h o uld be e xpected, the action could b e ma int a ined on the ba s i s of the pleadin g s , a dmi s sion and affid a vit unsettling qu e s t ion s nor in v olve s material factual issues genuinely in dispute." WHEREFORE, the pe t i t ion is hereby GRANTED. Respondent is ordered to issue a tax c redit �e�orandu� to petitioner in the s u� of 30?

DECISION CTA CASE NO. 4201 - 6- P1,399,941.45 to be used as pay�ent for its internal revenue tax liabili ties. SO ORDERED. Quezon City, Metro Mani l a, AIJ g u s t 7, 1991. A 5ociate JtJdge WE CONCUR1 ce~'f2r~ ERNEBTO D. ACOSTA A!uociate Judge CERT I FICATION I hereby certi f y that thi 5 decision was the Court of Tax Appeal5 in accordance with S�ction 13, Article VIII of the Constitution. � 30 .1