CTA Case No. 4796 (Decision)

. REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZOII CITY RAMON R_ DEL ROSARIO, JR., Petitioner, - versus - C.I.A. CASE NO. 4796 COMMISSIONER Of . Promulgated: , __~ o_E_c _o _11_99_4 ~ INTERNAL REVENUE, Responde-nt. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ X DECISION l .!!..E. r:.t�t_?_ �:~)�C�.ii'.J r--_~,�.=j� 'c--1� 1�;.:_;.,.r:-)�1-1� 1't_. r.�J1� �':-1�11 ;...:. ;..:,.~.y-.r-1�h:'-�:�)r1�:~~r�-~� r._�}- 1� :-._-tl;:_l_!-;-2:-_-; .f..t- ~~')1�1-1' .. .... Q 1t C_.;=_1_ I "' f_'>~ .. Investment C()r_p()ra.tion (AE�CIC for lxevity )_. forrnerly Arr:;cor � . i-.--�--:-,..[~-�,�lv~:-l-.1 !:> Ift�TT���~� -�:�"�.~t---!l�t::.'-.1l-L~- r.-J-.-!-l��1r.--'�\�h���-.-:..t.Lt-<1',�---.' .l.l, T'1 '�1'l�t.-t1-1 E'~���r-�~;'::,1--1��.-�:.�t ..�:�;'I1.�1-..1-.~--.,:-�.. 1_;{ (��r� 1 () n t�itll. rn r!( r) 1 �-� .-_~) ()_. 71C_:) �..: t.'_�...1-1�t..-�"-':)�t��..:".<:.\. ... .., .t..�l0c; ;�-:�-1~-l-�:_1_.r., ...:_>. ��-:-� 1�1-.1.. r!J:.. >�-� �-� 1�1-1 ;:::. .-.-.:.~.y.-..t--ll,..-�::~:1:. .t�lu0;::�-:�. fr�i-�r� . ~ ii..t._, r''j. ~~ .1 ' J' c�onl t��-=�����=��;:::.r� l r� f o lf })�.�.� (-i~�1--:�>:�.��.lO.ll--�1 �.� ~1Tc�t�l.'J;�-:-:�:-�. .) p?c..:..::i.... O�~L~,)c..?. .). .t,.c._:J.

DECT5ION- C.T.A. CA:;~ NO. 47% - Page2- 'r: Tl.i"�? ..:-t.',.-�.'.�-�l1�J.�Lc.l�t..i�u�. t-l ��..'.v� �:�.r.�. ,) f 1�-:.: Ic�� c-1� Br� ~1 ��=)- , � .)1J�� .~'�. 'J � r� F' �..~ kt ~�-�c~�� 'H, -�~j��c--' (�=)- t..:�I . .cJ: (�;� per sh;::t.re or P 12,27~l,.3.7).CH). By reason of Uw transfer, the A.bCIC sha.res ~.~,cr.ts valued at P 179J)4.3. per sha.re or shares) 1'�.r.r.�..-c,. "/f,oCo "/L:.-:., ,.c.-., 1(.-). ..,-::,. C): ,.I 1.�_~Jio) , ,�""'/ C)' (.)' ABCIC a. total of petitioner re;:tlized a. c:a.pita.l gain in the amount of P 12.562,041.2 Jc: ... .&. w �- Tl1u.s, on .~.pril 27, 1990. petitioner paid tl1e Bureau. of Internal Revenu.e the corresponding capital gains tax in the 3.t~lount of F�2,S02,565.2), pu.rsu;:mt t() Section 21(d)( 1) of the National Internal Revenue Code (NIRC). Subsequently, Bengu.et. Corporation declared a 25% stock dividend t..J.) all stoctlwlclers of record as of June 15, 1990. 1~..1.�--�--�.-.�-��-nr�t�-11..tL16n1,.v.� petitioner's slEl.re in Benguet was increased 1)y ,. 161;229 shares (2 ::,:~: >:::�f 644_. 917). Thus; after the st.oc:l~ clivi<:lend a.n a.djusted cost of P.30/i 16 per s11are (i.e. P24,o 42) 16 . 2 ~~ On Decerntrer 2 1. 1990. petitioner soW outside tl1e stock exdFJ.nge a t ot:t.l of 755,7.31 Class "A " Benguet shares to 1v!r. Leonardo T. Siguh:m .Reyna for P 11 .00 per slEt.re. or a total C�:)nsideration c�f .Pe,,.3. 11041.00. Since t11e adjusted cost of the P 11.00/sllare )]. f'�F' �.-.~) n,., �;..:.-) 1f'Gti- -~. A Final Cons-:::rlida.ted Tax Heturn on Stoct Transactions (Sh:=J.res !Jf Stod:.s .Not Traded T11ru The Stocl:.

DECISION- C.T.li.. CP.SE NO. 47% Excha.nge) v1las filed by petith::rner on J:::mu.ary 22.. 1991 , covering all his stocl:. trans;:Jc:tions outside of tt1e stoct exdM.t1!�2-�"E.' for the. year 1990. In said return. petitioner reported a net capit:J.l loss and a t�:l-1 gains of rn�._~).. c:i_c) �f-.!_,'�-J'r�)� .-. . �;�c r1'j �::;t,l-=- t�.::. f11 J. ��� .L -�-~ � �.:.:.1.. . ._. ,"--".'"-""l�n!" t� .. . of U t) ) f.-8.y -- tl� �D�:!...c,) (�-�)"c..).. , c) �f-:.)(�:<) .'<) .c.), t��, t t.tJ-.1!:<!v. �c-:��t_.(-J-,v��1T'- v����~�;l�t�.�.-:�:.�c--l.�.�..-A. �L;�}1�t.1�;n::. - !.P_. 1- Hi-P-~"1' J 1�llc..~-..-,.-1~';-:;' C�ll A�' s1,"'�ap transaction '.Vith Benguet Corporation on Marc:ll 2r3, 1990. Subsequ.ently, petitioner filed ;_:.n February 6, 1991 a da.im for refund/applic:J.tion for t:G'i credit certificates V>lith tJ1e respondent in tlle a.mount of P2 ,502,:,68.85. T,-., 1� ��t.:>tl - ��-� il �~: t1�.-:�:'-.� I !"P"C~�TI)�;�--�,1-1,--.�l.-:---11t. l�~J..c..-. t'1(-.?� t-- ��::>�.(.. ,._. ' <) !~l _C_:,�J-ir--�t�1 ,r- 1 <~:1. 1�1�1�1 f--l-i!- f"P--- fl.1\f"1-,-.lJ �- 'J or t:.1.x credit. In order to toll the prescriptive period for filing a judicial cl::::dm fo:)r refund. petition instituted t11e instant petition . on ..,1~pril 24, 1992 . fr',. .�.:_:.::.._c,�1--�r_t.>� t�1t�.�lc�,�.t~�1 t.�, t' t�1 ,�:J.f}C�..'�t\,;;,rf--�Jr� t"(�', t-~~ 1�P-� p��r<-;-: t�.iJ.t,l';J��r�! .' �(:):>. ll.'.v::.brtf'-J�(�.l t..t1�1,�:_t t,� t�l�1p., ~c:"-'~J.l.�.c....s -::;r� (_��..�t� �c-:�-1�1 <�::~>. t��';�:;�'.c_:�. 11�~--t.-'�V�''-,�1 1�1-l H-~-.l::�:,:.. c--��t_{_-!.'�.,�-Il-r.. p�-��v��'�---�l�-lv. 10rrvp '\'VT11� .._:-t.�-1t-1.r;;�:t� t�.J.�-o::;.'-�.�i;�:.,,��.r_l1�1-i t,11e�� ~c�-t..,,-)r,.�1r-'. exchange �:::.r not i�.:: covered utide.r the provision of Section 2 1(d )(2) c.f the NI.RC. The fad that the shares ' �,~Nre listed in the �c-��t_,.-.-_.f,�-�.�,..fl�rOp �.�-:�:...~:?::[..��-�1�1v�=<.t1rrc..:�,:_.. 1-�c--� .c_.�J-J1��1�1�,.-...1�:��-:�,.t.i t-� t ��_.~..... ~iJ- 1-1�t. 1�.t, 1.11 t-1��1�':�;�:" �~-,�1-Ii}"--)-l��t-� ,�-~��...f. <::.::.,��t1.1J11 t-J ��-� �- � �� . Tl"11=> t'c- 1/.:::i ,.-.�r� tl�l.::. },._. 1{~.�\�.1+ �)',{,_..}.., !,, , t �=tYt' :=<t.:.. �-� �"- .&. .&. �- '� _r.�� L�::.j{-n'r-�i� ll>:._:. :,_~.,tJ-._..,~1.:..:,.. -.J 11 l. ....- 1~ (l l- "�� jc=..,-r�.-..~J.c.:J--�c--� �c..}�.�,:�-11it"i;0::) 1V J" t11�:, '- t1�1.:- nr-�t� l�c_:~- o:_�:r~r t.1�1-~ pt�c.._..�-�q�-p�"'�I�l.:�.:.-; t.�.�_1 t..�...~_.r. -)� 1� t_..�=_1._ l ;.:-:.-.�--:a:..1�1-1 . f ;}-11�.--,c:-.::. �~11-=- ~,,-lrl.::.rl '\..} -.- , _ _ �- -. ���� -... .r ,_._ t_. . .... 1�' �:J.�...J�.� "and traded t.lirou.gh a loc3.1 E?Xcln.nge " under Section 2 1(d)(2) refe.rt; to tlle "listed s11ares" and not a qu.alifkatkm on the �: r-�r-11',r--: �-r� tl��-=- t-: ._, t..::. --1- 1' / 1 .�,r�, .-. :...f. _.f ~_J ��.� �-t ~~-)--,- iL.lit.�v, l.) t��: .� .L�.� �.:_f. ..; ~ ,_1, .���-� I..) �' "f (.�.Jt� ~- f....� ..., t-�l~1'::1 r..=r, t� 1�.�_,..c_,�.c_�, �c--'.v::.-111�1-lc.-..- r -.r�l� ...� -~.:.. !._.. ��_... � I i'.J '-" r_~ ,l, r� - .,_-.-.~_t!'�... r�1,--.J.t.� h,_...:..:_.. ..-_�}.:�:-:-:.(".llJ.,._-.-t._..�:_:..,.-_1 ! ;._'.;!'11 t._.l�Lp. .-J:.11_p._.;n::,�.:�-:�..-._�1 {-_~.o~.1n_. t' t.r�:.J>.1 �j (._.;.C_�'._~. r�1. L(~. 1-1�1'1'~-~ (,;;. �..�--.'r�1 t.-1~1� {-:->- �-� �C-"--:-l'�lP., (._;. t" .tL:.-:.p_. t~-I.j:-.r]_t�..,:-t~ .�:_:.�11�'":�.fP.,C._,� l�,';J-J� t_c._.�1��.r_i-=.,- .._-1�f t_.t�1-~=- .c_.-t..\-�,-....-...lr-�.. p._.��vy~--�ll-�~Jr�1-o- �e�- . P�..:.-_.-.=_.�r,l(,~!r-1,.-l.,~tlt- ' -' r�lt-�-: r� ec.'... -� -�=----~1-�-=�-1-I tt�1.~-. ,�--,' !r--�,1.11.�:.,:.,---1 t.-1' l �::;t r-�, .:-t't' t1���� �cJ-1-! <,���J-tl.--j r-~ ~l 1i' '-/.t (.,�,r� 1~ .-��--�'--':!�n' l�tcO-:>.1 _. ,-lj CJ. . ._� �- -� .)

DEL!SION- C.T.A. CASE NO. 47% - Page4- gains on the sa.le of Benguet. shares in Decernber 2 1, 1990 by rea.son of the fact tl1at the st1ares 1.nlere list~d in tli.e st...oc:lc exchang,_e eve.n if sold outside thereof. Petitioner. on the ot.ller hand, contends that the t.ax rate ~tpplic:a.ble to sl".:.::J.res sold outside the stock exchange even though listed therein is covered bv Section 2l(d)(l) ~Nhere the tax rate ' applicable is 10~{; ()n the first P 100. 000.00 capital gain and 20% in excess of P 1(H),OOO.OO. The provi~;ion of Section 2 1(d)(2) cited by respondent :::tpplies only to the sale or exchange of shares listed ~ .-if�1,.-l tr� ':-:-�1�(~1;�~:�:.�(�11�1.1 tllP. c:t(�u�"�l' P.'T(� 1�1C~.1.fiC;~!tC�.>.... 't:J:'.,.c,,.�.�\�.,t-l�.v--,11 u') l{�.(�-l '.J{'� 1) 1�.c.._�, (""�'lLV!-�8.!" {ll} fll.J1. 1��cJ� � '.I � � �..r �- � .,.._. ��� ... ._.,),;..., point since it exclusively refers to "shares of stocl(. not traded Otherwise. if the lawmakers intended a 1/ 4 of 1?& tax on all s;Jle or exd1ange of listed shares then Section 2 1(cl )( 1) should be read as "shares not listed in the stock excha.nge~;" in~;tead of "shares not traded tht:"ou.gh the stock exchanges . Section 2 1(d) is dear and does not leave any doubt on its interr.)retation. Thus. it n1ust be 2"iven its litera.! mea.nine. The � '-' �,..J "'(l "c�l" 11.c�t.c:...-1 tr�a 1._-...v.-~1��1J� 1'�1�11�v'ti(.) t"1 "r...I,.!"1.-.�1. " 1�1-1 t,1�1"��".� r.~.l~!r�(�-..!�c�-�,�.c,, �-� 1<.:-.I..t-~.-,=._-, i.",lf .c.J-t..(.,l(����l'-.. ~� ,�.�� �.+ d~ 1l, .� (j.c�>-�i",l tl - 11� . .,1t�r,...u.. .cCr1� 1 t.�1�1,~ -.. 1 (-..;f""�-~~t-l .'":)�t.J�.�-�,(._�.1~' ..._.,..L,:,...�...�.1-1~--=\<tln;=-.,.c.., " Jt.�1�1~._.~�:1J.1c.-_, t.-11 i~:J.t.... t�1� 1P.,., c._1�1�1,_at�t:r::-�.s .c..~-t_A..._.r"._l t111 Jc�r� -:1l,..t, 1>;::. t1�1,c, c-tt"li". i7.{1-11�1r, 1�t tt-1 1�1�1 -~ - ��- � -� �- � tr �~1i"lAi"l -� �.r !�=..1' �- 1 -� �-� ��� ,�.c�,..y..,l���.r1��...�.~_ ~. nn;b::.... . 1�c� t l"I'-"�t t::: �-� t' -� �-� -� 1.., v . 'J' / �-� - � � - � �- �- � �- - _t, ._. ..�._�, rl 11/� .c..-;}�1�~:.1.r�;:�-:�.c�-�� 1.1.~c��t<_,.:_:.-.(.1. �.-..,.d-.r�1 1L.-'.'=�-::.' t.-r�o" (..l.c._>.,-_�11.1"�' t,l�1'=.-:.:' c._.�.tJ.�-J�(.�.�k�~ �ar� ,,.,. o.-:..;~;r~~v�,l"1<:. le:,'=::'1 l�t clr:.> c�.~:.:r>� 1.,...l(:Jt.. �� 110111lever mean t11at listed sllares cannot be sold over -the-counter. in ;:.l. pri~tat.ely negotia.ted s;::tle or excllange; or outside the stock ;::.'\.1' v.t.~-��~��1�1�~-1�1�10cr .c> . 'J' The rnain issue presented therefore for resolution is Vlllether or not petitioner i~ entitled t;) tlle refund or tax credit of

DEOSION- C.T .A. CASE NO. 47% -PageS- stoct transacticms for 1990. i�..n ancilliary issue is v1Thet1wr or not -':::"c-�."-'-�t�l.,y.ltl ,�_), l(..t.l ,'d...l..i �,.-_..,!- �-:-�:(�:;~..�--�t-1���,--,-,r1""�:'� ll,_r,l_".~~{.. <Y:). . o� f t1.1ll">' 11{rirr-:��.rJ � 1�.c_. �d-r.�.�.p,11.<-.~~at~)l�P. 1�.~.,1 the ~;ale or excha.n!,_I,e of shares listed but not sold or transferred -r",~i(:.;_.. �I-L,-l1~�-1 t�l�k�::L-t f.--�.�-:�::L.tTDr n-et- t�t>~ (.:.:.. t�Lf tLl �~�<.�1 t .o t_.lLP cl.a. 1�1-11 !-Af r-{y:;.1-'Ll. n d v r.Jr in the alternative the issuancE: of a tax credit certificate as pn.1.yed for pursuant to Section 2 1(d)( 1) of the NIRC. The pertinent pr(:.vision of Section 2 l(d)( 1) and (2) of thE: I It�ltc.r�t�l;::-'1 \re::\tt�..-l 1P. ,~.-l.�ic. ' I f.�,_�l�f:~::c,..�J�. ( (}, ,.� V l-1�":f1.,l Dc. TP!.11 f-lt-,-Jvt� ~���.� ..L 1-\ r:lo. �,_, 1"/ 'J _ \. �-� � - �'�.� f�� "�.� J �sec. 2 1. Tax on citizens or residents. - (d) Capit.al gains fit1.Dl sales of sbares .()f st.ock_ T11e provt:;lons of Section .~'>,?;.(b) not.Tv..,.ithstanding, (:a.pita.l ga.ins realized from the sale, ,r,!� p�-~� ...:y:.�.-.}...�..�lr~:.~.!-iC0'?-..1. ".."..1!- (�.11���=-��!n.. r�-)-r~-.j.. t,1., �r."..1fl ., �-J=�1-1C."l.'!"?..>....�;�:�. r�-�Jf �'-=� "_.t..f.,)f.."...1,.e.';....�.:_:-, 1.11 u~t-iiIl dornestic corpon:t.tion sh;::dl l)e taxed as follo~.~?s: ( 1) Net capit3.1 gc:tin a.s defined in Section ;.::.a..-�1-1 !"t�r�t�l-l ..-�);.._�.1~{\L;::\-.,�) (�.}- '). !�;.-::..�C�<.\1Ai.7....;. :c.:�..r.l -~-l ,L.ll_l�r�lerr, ... ... t\A:.:..P..c7:...C-t,J~.....r.,.1,-t:-- il7,::.:_.C�~..\t�J �lJh.J."\:="' :;al-&. exchange �or other disposition of s11a.res of st;:1ck not tEv:led t11rou2l1 a. loc:a.1 :;toct exciianqs-:u ~ Not over P 1(H\OO(JOO ............ 10% Over P 1CH).000.00 ... .. .. ............. 20 :~ {2) C::tpital gain:; presur.ned to lia.ve bei<:n rea.lized irorn tlle ~;ale, ex:change or dispo~;ition of si�l;:u�e:; ()f :;tcl(:lz. listed and tr;3.de(! t11roug11 a k:{:al ~;t.ocK l /,::;. r,� 1 c-;.::.111� - ,:::.v[�l-1�~11�1.:'(:;. ��� .. .s. ,_. �- �� ;::- .... r .1 ._. l �;:r�~.l� tL�; c�".'j..�:_�� ;.:_:...�---+~ r,_�Jt-1 t~t�...�lp..,. ot:�t�r�\,..��=,_�,.�.:_�. .J ._. Lr;l;o=, .J..,...,1�1�r._�..P., r:A the ~:hare cr shares of stoct. � In the case of Jose c_ Ibazeta v _ Com_missi,oner �of ~\ Internal Revenue, CTA Case No. 4797, August 8. 1994, 'Ne ::;t.:~ ted th u.s :

DECISION- C.T.A. CA....9! NO. 4796 - Page6- "Tiw Court. - ~ � - ca.nno:A. h ;.=..-if_dll~' find ;_:.,tt,n. ,lt_.11itw�::J ar.nbiuquous in Section 2H.d). (. 1.) a.nd (.2) of the- T::tx Code that pose a _f)fC�t..lem of interpretation. The T'l'lOrds are Tr'�l"" r1 rI )-lh.O.J1._ ~'-~r���!�,.j _rJ:�:�.:'�.:_,}.-�_�t1. �1�T;T. 1-l�t�!1�...�.t.�i'::�:'t�,~-�t-��:-��.1-1�ct�=1hl"" \.:.p,..' -..r. c:r�I�!c. 'lnl�=�t� �-� ._,..._. ���� J._ - � \..t 1�-<�~.\t..-~v �-� '-�.�!1� 1n.�.��:.r.--�:�� ��:1.t�1���--�l �1 <'1..(.l_��:r..--~.� iu- ..:-1...~:.o-~. �.-- t�..�!r�l t...tc1 -.~t�"1-".� t.� C' �o".'p1.tal \-::. .c~.1t.�.1,.!,--:.� t�~.t�.:.:�.~l1. Z"v"r-..1+ � fr�:)m sale of s1El.re3 of stJ.)Cts [Section 21(d)( l )J applies t1���-,'lJ1Cf1�1 thP. ('�!' t�--�.�.~-1 t-�f�i ��o- ��-:��..~.. .t,..'L~�-".....lt~� t._.�l.��..:..'.f..�.�_�lp�-�,-�-�l� ... i.l �-� -�'-� P'-"C�1�1~!1t;!6 c t��J 1(1('~1 .. .. .. ..... -� �- � '-' . .., :'t.. �..,.... � '-� t;; 'tJ . ~.;;lllereas, t11e 1/4 of l :t base(l on the gross selling l .-. 1 }.-' !-1.�.,-...~-. r �!- .U..}~,, .-.-:-t-lk�:.j.!- ".~".--='. .-. !- ..-:-.T..:.C\. (..�.F1�~ { {.:"J<.�:.:''-'.�. tJ. r.A� l .c-., (.�,�1.'�'1 (.. c~,. .,,1 �:�.f.l -ri�/1~ 1"P._...:";~ .j �.j t1.) thos;e listed and tra.ded through a loc:::tl ~;t.ock ex(~lianQ"e . While it is true that onl~vr tlio~;e :t1ares 'i-71-licii are li::t.e�:l rnay be t.ra.Je�J in 'tlle local ~;t;:x1::. excl1:::m�'2-''e.. it �::l�:)es not ne�-~e::;:;aril\I7 follov.J t11a.t listecl shar~::; may only be tr:.~.ded in t.lle loc:J.l st;;ct excha.nge . T1 O:�i�ll(l (.,, t-:�1�i�lp .1P':T t�r}::l \! t)~ t11~ 1 fv�lt._~.'(.<\ 1 !1\:'.. ~..,'.&-:4"f�.'.�.}..-1~C.1.'J.}f;-Y::.?�J > . �..� , ' � �-" / -_, �-� �J �- � 'v '-1� �-�-' .. -..- r.J � t( l fv' .r ...- .r ~.~le a.gree ~.\�'ith petitioner that. the 'listing ' and actual ' t-t� � ��-:~-.1-~..+ 1�!-l CCi� . 1-.-liJ~�t r�...�.'�--�,.J..,jl ~�--��� nr � 1� �t�1 n�-�+~� ��lc. t� 1�t�_�.1!� "~"�"-�r.-....t1-� �i�-..r1t1 ~.-1 l frJ .i {t, �.-.::.�)) t..r...�J l . :::" -� '� ... �- � �... �-� J apply . Plezl':::e note that tlw said provision of t:JVvT botll mentions 'listed ' and 'traded ', 1.��.::dned to!ud�etller bv, the injun(:ture v.ron:l �and'_. rneaning c:oncurr.;;;nce. If t11e ::;iE1.r~s '.A st;)ck a.re. listed !)ut ::;ol(l outsit:le. U1e loca.l ::toct exchange, Secti�)n 2 1(d)(l) s11ou.1d apply . ~Nhat i:; controllini2�-�� i:::; V�l1iet1ler or not the shares of st:)cl:: ::1.re traded in tlw local stoct exc1Elnf�-:�e. - This is the (�.�f�.�'�!'I�I!'1��l�r���,t�l d���A�.�f�l;�����,1�1-ll�1-l 0�::.>-~tr�-���,t� 1. �t�l 1.��,,,.-.-,+I,1�1 r{-'.t� \-,-,~,71..-j .1� f'l!-1'- ;-~�)f 1�-:>.~1.1 " �:\ , , . .�. �- � material for the purpose of :;:J.pplying Section 2 1(d )( 1) or the tl1eo::e o::h;:_:~_res a:re traded . (Francisco A. Dizon v. Commissioner of Internal Revenue, CTA Case No . 4798, November 17, 1993J The- fir:t tr:::1.n:;::lction entered into by petitioner, on March .-1 0 1:,�J�(:�J (,)�, 1�1..1 ,. o.1 -v�e�-:; t.}� �1e� e� �;�;�.c�1�1a1_1_g,,e \')1. A...i.:>.,l_~.. I t-_~. :-:�;-n-a!�e�r.:; 1�, �. f':�e�11�;?r,1J.lEt :�-> t.� ~ (), \)1 I' :::hare~:: . Vlhic:h re:;ulted to a CE1.pital gain . Subsequently, petitioner

DECISION- C.T.li. CASE NO. 4796 -Page 7- lt.>Ss from ~:aid transa.d.k.~n In both transaction~: Section 21(d)( 1) �!-2�ove.rn . Since. th~:::e sh;::tres Vhre tra.ded outside t.t1e stock t"r�.-���rrl t...l. le (::::t.1f_)t' t a l 1�._-)<=-_.s ifl(:llt.�r-~_:(1 th.::- c:;=-tl.::- flf BenCi]JP.t ._. .1. 1_. "" �.; .............. �-� �-� �� C� __ ..., -� .c_.::1w�-.!"e.'-) r� .:_'..~::t. 1 i�_:..e <�.1. "~="'�~-11_1_(_�:tl:.:-�u' !�ro. r�H� t.\.1�1e' (._-:::1.r1;r1�t._-.;:,,1_ 6ry':-.11. �1.1 r..lf...>_. t"1.T�.J �1 "~:?f... !"r�r.) r�I�L tl."'1{.v> ��1�=-lto::.(l .-,11 '�t� 1:-:-'.� 1�1�1�11_q-. l r._�.�t�_�_,t�1c._�:�1�._;.1 1� (_._ .;'�J �- !�.::::.hlt�r, ��- � �--�- - ... _ �._.! (.-.,_1�1 ��-::-�,�,-�l- j�.� l-l--r~�t-t�-Il!�:-:::�' t�l�t-� r.:~:--::..1t' l- l�l-11 (�� v�� tl'�.'�:-:� :��:�.rt-11�1-l0rt .c.. '�- -� �-� i�� 1(.> .�..-, r� i�;.:. .c_:�t.-._.'..)�. ,�._.,!j':,,_ t.,r. �~�:,!.-1,..C._�u�:-\,f.�_-�t�1��'...).f"i f�._:l'fJ.f_1._t�l.n=., -'1.--1�1'�:�:�:' t.-J-:,~.~�"'�~.(-.,. .l ._, ~'/' t:;'Ci, �c-'�f�l:V:-'.11 .���.!' ft'lp.,.1r..l4 (�.l�Jt."! (�>./ f" 1>-.��,,�.:�:.�f,,-.,t�p.,. t�l��i.�u.� 1c) t1.��1 ,�-.�!l.�~.1�. v'I ��'.����!� t,1�1,�:.:�. ft�.�� t-l�t-�t.�l�l L'"!�l r�,t�l t l�l, 1�r.�,,11rv ;1f~111� t�lrb-r t.�l1 ~�=.�> r���l(�;.���:J�,v::. t'1- t1' �1 p.��� ., .) {.,_~,_,�..:~::�.'-�.��-. 7 J~:-:�.. t�:�"� ,. rD:.. ,�:.:.�tr:;;� [supra.. ] ! �' t' . ,�_�..r� !.:-.;'~v�-����-��1�-.,o...,~l.-;:1:1.,.:�:..c�.- 1. ~c�- t_l.�L.:.- 1�1.-.:�::. t.� r.�.�af--��1.11.-..:-11. 1�.~)c..,;�.c_�. (, <,):'!��:;�'i�..�.t..-..h�A�� �l a. ..) .''Ji .�_;;) (.� �') ( �) .) I��I; IF..�(-_..;,. In t~-t-:�=-1�r�1.c_.�.:_:_v,_�..t,l�f�-l�flO.:�: ..u� r�1t..-:�:.�.�t�.�:�.:�..r_l 1.!L- r.�.(.) tl-)y f.-,;v:.t�.1.t.-.lC-.�t-!!.:-.;'t- i-J.lJt~S.l.tj �c-�. t.1. �1e. �cJ�t!._-.,.(�,�1���� F-:.?�X<�.�.t�lc~.i.l-l;r::r,- v?;::1s filed by pet.it.ione~- '..vit11 the BIR em January 22, 1991. The !-~11�1~--,�. 1' ;_�_.�(__�, t-1.<=-_,.-.-_)1�i� ..--.!-.:?�. t.;_._-.:�..-..1 !""._-"�. t._.J_i,_!"!i__. 1�1�Lt�11�o�:.:o,:o.t~-~-.=:>,_<i a- 1�1~� t� o~:..i.:.,1.1r.i1.t_";:',1 of - .t...f!�-,::.:. ('�'��'-:�:.�l,n.� t. +t.:.:?.il ,r-_:~,��:-."i.E,c-. r��'.:-I~V�-. J.u...�.�.�-.�.l4.�.u��-t� ~<�::�.:�::..,-�-�t ��,.-�,Ln '.:)... 1\1-,--.l. .'�i{, ,I'.), .::-.,.�t-1-,-�.l. ~r.-..~�-t.;�:.., �':::t'.~rL1.-..-JU.11 t.. i.,lf !�p�.�.!.l-lf} t'.}P'�'.(.+l l f- i f:;-j{!;�,r� ..-.,~�- 1r:�}. ."�:':�.,r�,1�f 'Jl. (� ( �i u t �-� i_ '�, I .....- .} � '' - ''if r�,-., - f�.-:Jt- th� (���1r�, t ''t�t WHEn~.EFO~-.E... 1�.�!�.1 ,,!1.6~. ~V.".TT ..,_. -� ~�-=�> o �.� <�=� >~n -� h�.�l.t. w�~� [�.�::�:-. t i t~-1- ' -c_! �-� - .!. ()r�� l�c.�-,�:-�'�n-�.�.�:.:�:. ��:::J> },'J' tv_�::.j_V,, ,�.�,-r�/:'?;"�.1�1'. t�.� r..�..��:-�::1.��.t�i.�!"t' r.��.o-:.f.t..P.J. 1�r�1 f�:> ~;r-��lr� 1r,}1f nI~' =�.>� t.l�.t.1�., , e��r�,. F�'-':-'�l ll ! l [ 'J,O�-�:�.}. \ 4 o:J� � \, Tr tl�rr. ~a.~�.(.;.C-��-:':�-:�.r�i����.�;_, )- ..;t:"'�:.-..i!"_(_l r._'...~_!.t_�.,.�! t.� (�-'�r!- .j. ) ~} ; _c)r,,.�:6._~_c} fJp,). ur}C..)_, t�r..._>.lr_;._r,:._:..c.._-plv.lt.J��. tt llCb.i (�l~ ~l.':-"::.rr-�.-'-~'��v�-l .�

.. DED5ION- CT'"'"~-...CA.....~NO. 47% - Page8 - r t �� ',1T-(�; ,�..�-..,}~ lr�"l f"r."_�)t"fr�""�'>J-l"t} !'~"u'"t-"!}..:,,f�1t., �~~-�C��;-� /._! c- tc:- . .J .�J SO ORDERED. WE CONCUR: c~U2. - ~ ERJ1ESTO D. &A...COSTA/ F'1";:.>. ��:-:�1�,-��~<�1�!"ir:"~J JT�~-1��d�.+,o-,-;:;~,�. CERTIFICA. TION This i::; to certifv tlla.t the above decision vif::1s reached after ' in accordance ,vvTit.h Section 13. Article \.TI II of the Constitution. ~~~~Q~ ERNESTO D. ACOSTA ~~ Pr?.>.., ~._,i. r._i.Linoo� JTu�d-Pc".~._, Court of Tax Appeals