Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

DECISION

FERRER-FLORES, J.:

The Petition for Review prays for the Court to order the cancellation and withdrawal of respondent's assessment against petitioner for alleged deficiency value-added ta)( (VAT) for the period January 1, 2014 to June 30, 2014, in the total amount of P656,446,244.25, inclusive of interest. 1

THE PARTIES

Petitioner Fort Bonifacio Development Corporation is a domestic corporation, duly organized and e)(isting under Philippine law with office address at 2/F Bonifacio Technology Center, 31st Street comer 2nd Avenue, Bonifacio Global City, Taguig City, Philippines. It is primarily engaged in the development of a 440-hectare area in Fort Bonifacio for residential, commercial, business, mi)(ed development, institutional, recreational, tourism, sports, amusement, people movers, security systems, and other purposes, and it is registered with the Bureau of Internal Revenue (BIR) under Ta)(payer Identification Number (TIN) 004-707-554-000, and with the

Philippine Economic Zone Authority (PEZA)2 1

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Respondent is the duly appointed Commissioner of Internal Revenue (CIR) vested under the appropriate laws with the authority to carry out the functions, duties and responsibilities of his office, including, inter alia, the power to decide disputed assessments and to cancel and abate tax liabilities pursuant to the provisions of the National Internal Revenue Code (NIRC) of 1997, as amended, other tax laws, and rules and regulations. He may be served summons, pleadings, and other processes of this Court at his office at the 5th Floor BIR National Office Building, BIR Road, Diliman, Quezon City.3

ANTECEDENTS (ADMINISTRATIVE LEVEL)

Petitioner

received the

Letter

of

Authority

(LOA)

No.

eLA201100086820 dated October 3, 2014 from the BIR Large Taxpayers Service (L TS ), 4 authorizing Revenue Officers (ROs) Margie Padre, Ivy Claudette Puno and Group Supervisor (GS) Mariesol Girang to examine petitioner's books of accounts and other accounting records for VAT for the period January 1, 2014 to June 30, 2014, signed by Officer-In-Charge (OIC) - Assistant Commissioner of the Large Taxpayers Service, Nestor S. Valeroso.5 Subsequently, on March 17, 2017, petitioner received the Preliminary Assessment Notice (PAN) dated March 16, 2017 - from the L TS, proposing to assess petitioner for deficiency VAT in the total amount of !>657,831,579.82, inclusive of interests and compromise penalties, for January 1, 2014 to June 30, 2014.6 On April 10, 2017, petitioner then received the Formal Letter of Demand (FLD) dated April 10, 2017.7 The FLD assessed petitioner alleged deficiency VAT for the first semester of 2014 in the total amount of !>664,868,918.41, inclusive of interests and compromise penalties, broken down as follows: 8

Tax Type

Basic Tax Due

Interest

Total

VAT

428,104,763.97 236,689' 154.44 664,793,918.41

Compromise Penalties

75,000.00 75,000.00 4

Total

664,868,918.41 Par. 1.2, Admitted Facts, JSFI, Docket- Vol. 2, p. 696. Exhibit "P-4", Docket- Vol. 2, pp. 884 to 886; Exhibit "R-1 ", BIR Records (Exhibit "R-8"), p. 3. Par. 1.3, Admitted Facts, JSFI, Docket- Vol. 2, p. 696. !d.; Exhibit "P-5", Docket- Vol. 2, pp. 887 to 905; Exhibit "R-4", BTR Records (Exhibit "R-8"), pp. 311 to 330.

Exhibit "P-6", Docket- Vol. 2, pp. 906 to 927; Exhibit "R-5", BIR Records (Exhibit "R-8"), pp. 334 to 355.

Par. 1.5, Admitted Facts, JSFI, Docket- Vol. 2, p. 696.

I

I

CTA Case No .. 10566 Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Thereafter, on May 10, 2017, petitioner filed its letter dated May 9, 2017 (Request for Reinvestigation) with the BIR.9 On June 1, 2021, respondent issued the Final Decision on Disputed Assessment (FDDA), which was received by petitioner on June 2, 2021. 10 The FDDA assessed petitioner with alleged deficiency VAT for the period from January 1, 2014 to June 30, 2014 in the total amount of P656,446,244.25, inclusive ofinterest, broken down as follows: 11

Tax Type

Basic Tax Due

Interest

Total

I

VAT

316,098,785.16 340,347,459.09 656,446,244.25 I

PROCEEDINGS BEFORE THIS COURT

The present Petition for Review was filed on July 1, 2021. 12 Respondent then filed his Answer on November 29, 2021, 13 In the Resolution dated December 16, 2021, 14 the case was referred to mediation at the Philippine Mediation Center-Court of Tax Appeals (PMC- CTA), and the parties were ordered by the Court to immediately proceed and to personally appear or through their authorized representative at the PMC- CTA on February 10, 2022. The PMC-CTA, however, later issued the Back to Court Report on March 1, 2022,15 stating that mediation was refused by petitioner.

Respondent then transmitted the BIR Records of the present case on May 27,2022. 16 The Pre-Trial Conference was set and held on June 23, 2022. 17 Prior thereto, Petitioner's Pre-Trial Brief was filed on June 20, 2022, 18 while Exhibit "P-7", Docket- Vol. 2, pp. 928 to 937. 10 Exhibit "P-8", !d. at 938 to 942; Exhibit "R-7", BIR Records (Exhibit "R-8"), pp. 773 to 782. 11 Par. 1.6, Admitted Facts, JSFI, Docket- Vol. 2, p. 697. 12 Docket- Vol. I, pp. 6 to 38.

13 !d. at 275 to 295.

14 !d. at 297 to 298.

15 !d. at 311.

16 Ex- Parte Compliance dated May 27,2022, Docket- Vol. I, pp. 316 to 317. \

Fort Bonifacio Development Corporation vs. Commissioner oflnternal Revenue respondent submitted his Compliance on June 21, 2022, 19 attaching his Pre-

Trial Brief20

In the meantime, on June 28, 2022, petitioner filed its Urgent Motion to Suspend Collection of Tax Liability ("Urgent Motion ''),21 to which respondent failed to file his comment.22 At the hearing held for the said Urgent Motion on July 21, 2022, petitioner presented the testimony of its Comptroller, Ms. Anna Lisa P. Mesina.23 Subsequently, petitioner filed its Formal Offer of Evidence (In support of Petitioner's Urgent Motion to Suspend Collection of Tax Liability ["Urgent Motion"}) on August 5, 2022,24 to which respondent filed his Comment (On Petitioner's Formal Offer of Evidence dated 5 August 2022) on August 10,2022.25 On August 16, 2022, the parties filed their Joint Stipulation of Facts and lssues,26 which was admitted and approved by the Court in the Order dated August 25, 2022,27 thereby deeming the termination of the Pre-Trial. The Pre-Trial Order was then issued on September 12,2022.28 Trial ensued, with both parties presenting and offering their respective documentary and testimonial evidence.

Petitioner offered the testimonies of the following individuals, namely: (¹) Ms. Winnie C. Ramos,29 petitioner's Assistant Tax Manager; (2) Ms. Mesina,30 petitioner's Comptroller; and, (3) Mr. Joel M. Ganalon,31 the Court -commissioned Independent Certified Pub lie Accountant (ICP A). 32\. 19 Docket- Vol. I, pp. 338 to 339.

20 !d. at 341 to 344.

21 !d. at 378 to 395.

22 Records Verification Report dated August 30, 2022 issued by the Judicial Records Division of this Court, Docket- Vol. 2, p. 721.

23 Exhibit "P-26", Docket- Vol. I, pp. 359 to 372; Minutes of the hearing held on, and Order dated, July 21, 2022, Docket- Vol. 2, pp. 499 to 50 I. 24 Docket- Vol. 2, pp. 505 to 513.

25 I d. at 716 to 718.

26 !d. at 695 to 703.

27 !d. at 720.

28 !d. at 723 to 732.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

The Report ofthe said ICPA was submitted on November 8, 2022.33 On February 23, 2023, petitioner filed its Formal Offer of Evidence,34 to which respondent filed his Comment/Opposition (On Petitioner's Formal Offer of Evidence) on March 9, 2023.35 In the Resolution dated August 4, 2023,36 the Court admitted petitioner's offered exhibits, except Exhibits "P- 11-EEEE-18" and "P-11-EEEE-40", for not being found in the records. Petitioner then filed a Motion for Reconsideration (Re: Resolution dated August 04, 2023) on September 4, 2023,37 to which respondent filed his Comment/Opposition (Re:

Motion for Reconsideration dated 1 September 2023) on October 9, 2023.38 In the Resolution dated May 27, 2024,39 the Court denied petitioner's Motion for Reconsideration (Re: Resolution dated August 04, 2023).

In the meantime, per its Resolution dated November 28, 2023,40 the Court partially granted petitioner's Urgent Motion to Suspend Collection of Tax Liability, enjoining and prohibiting respondent from implementing the Warrant of Distraint and/or Levy (WDL) and the Warrants of Garnishment, and ordering respondent and any of his officers and/or employees to cease and desist from committing any and all acts to collect on petitioner's alleged deficiency VAT assessment subject of this case.

On December

13, 2023, respondent filed his

Motion for

Reconsideration (Re: Resolution dated 28 November 2023/ 1 via registered mail, to which petitioner filed its Comment on Respondent's Motion for Reconsideration Dated 13 December 2023, on February 12, 2024.42 In the Resolution dated March 27, 2024,43 the Court denied respondent's Motion for Reconsideration (Re: Resolution dated 28 November 2023) for lack of merit.

For his part, respondent presented the testimony of RO Ivy Claudette C.Puno 44 \ 33 Exhibit "P-12", Docket- Vol. 2, pp. 753 to 822. 34 Docket- Vol. 2, pp. 867 to 877.

35 Docket- Vol. 3, pp. 1064 to 1066.

36 !d. at 1072 to 1075.

37 !d. at 1076 to 1080.

38 I d. at 111 7 to 1 119.

39 /d.at1184to1187.

40 !d. at 1122 to 1139.

41 !d. at 1151 to 1159.

42 /d.at1171to1176.

43 I d. at 1179 to 1182.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

On December 11, 2023, respondent filed his Formal Offer of Evidence,45 to which petitioner failed to file its comment.46 In the Resolution dated May 27, 2024,47 the Court admitted all of respondent's offered exhibits.

Respondent filed a Manifestation on January 26, 2024,48 stating that he will adopt the arguments stated in the Answer in place of the Memorandum; while the Petitioner's Memorandum was filed on August 22, 2024.49 The case was considered submitted for decision on September 9, 2024. 50

THE STIPULATED ISSUE

The parties stipulated the following issue for this Court's resolution, VIZ.:

Whether or not petltwner is liable to pay the amount of Php656,446,244.25 for deficiency Value-Added Tax, including compromise penalty for the period January 1, 2014 to June 30, 2014, plus 25% surcharge and 20% deficiency and delinquency interest for late payment, pursuant to Section 249(C) of the NIRC of 1997, as amended; and delinquency interest at the rate of 12% per annum from January 1, 2018 until the amount is fully paid pursuant to Section 249(C) of the NIRC of 1997, in relation to Section 249(A) of the same Code, as amended by the Tax Reform for Acceleration and Inclusion (TRAIN) Law. 51 Petitioner's arguments:

Petitioner argues that the deficiency tax assessments are null and void as they were issued in violation of its right to due process. Petitioner posits that the assessment is void since respondent's FLD and FDDA are not final demands for payment and petitioner's tax liability remains indefinite. Petitioner, thus, claims that the assessment is void since respondent's FLD I 45 Docket- Vol. 3, pp. 1143 to 1149.

46 Records Verification dated February 13, 2024 issued by the Judicial Records Division of this Court, Docket- Vol. 3, p. 1177.

47 !d. atpp. 1184 to 1187.

48 I d. at 116 3 to 116 5.

49 !d. at 1196 to 1224.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue and FDDA failed to clearly state the law and facts on which the assessments are made; and that the assessments have no factual and legal bases. Respondent's counter-arguments:

In his Answer, respondent contends that the Court's power of judicial review over his decisions on disputed assessments is by nature exclusive and appellate; hence, petitioner should not be allowed to raise issues for the first time on appeal.

For respondent, the assessment notices provide for the demand for payment of the tax deficiency of petitioner and the audit examination was properly conducted; thus, the resulting assessments are valid. Assuming arguendo that respondent failed to indicate the definite total deficiency tax liability of petitioner, the amount of deficiency tax must not be nullified in its entirety. Respondent posits that the assessments were made in accordance with prevailing laws and rules, and that the recent decisions of the Court regarding the technicalities on respondent's letters and notices should not be applied retroactively. Finally, respondent maintains that petitioner is liable for deficiency VAT for the period January 1, 2014 to June 30,2014 and compromise penalty.

THE COURT'S RULING

The present Petition for Review is partly meritorious. The FDDA is void for failure to indicate a ftxed and definite amount of tax liability to be paid by petitioner ..

Petitioner argues that the FLD and FDDA are invalid because it is not a definite demand for payment of tax due and petitioner's alleged tax liabilities remain indefinite.

We agree only insofar as the FDDA is concerned. An assessment "refers to the determination of amounts due from a person obligated to make payments."52 In the context in which it is used in the NIRC, an assessment is a written notice and demand made by the BIR \

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue on the taxpayer for the settlement of a due tax liability that is there definitely set and fixed. 53 In Commissioner of Internal Revenue vs. Pascor Realty and Development Corporation, et al., 54 the Supreme Court emphasized the requirement for an assessment to contain a specific demand for payment within a prescribed period in this wise: An assessment contains not only a computation of tax liabilities, but also a demand for payment within a prescribed period. It also signals the time when penalties and interests begin to accrue against the taxpayer. To enable the taxpayer to determine his remedies thereon, due process requires that it must be served on and received by the taxpayer. XXX.

XXX

XXX

XXX

To start with, an assessment must be sent to and received by a taxpayer, and must demand payment of the taxes described therein within a specific period. Thus, the NIRC imposes a 25 percent penalty, in addition to the tax due, in case the taxpayer fails to pay the deficiency tax within the time prescribed for its payment in the notice of assessment. Likewise, an interest of 20% per annum, or such higher rate as may be prescribed by rules and regulations, is to be collected from the date prescribed for its payment until the full payment. (Emphases added) As a corollary, in Commissioner of Internal Revenue vs. Fitness By Design, Inc. (Fitness By Design case),55 the Supreme Court again emphasized the importance of the issuance of a valid formal assessment, i.e., that it must be a demand for payment of the taxes described, within a specific period, and that the amount of tax liability for which the taxpayer is accountable must be definite, viz.:

... the Final Assessment Notice is not valid if it does not contain a definite due date for payment by the taxpayer.

XXX

XXX

XXX

The issuance of a valid formal assessment is a substantive prerequisite for collection of taxes.

Neither the National Internal

Revenue Code nor the revenue regulations provided for a 'specific definition or form of an assessment.' However, the National Internal Revenue Code defines its explicit functions and effects. An assessment does not only include a computation of tax liabilities; it also includes a demand for payment within a period prescribed. Its main purpose is to determine the amount that a taxpayer is liable to pay. \

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

XXX

XXX

XXX

A final assessment is a notice 'to the effect that the amount therein stated is due as tax and a demand for payment thereof.' This demand for payment signals the time 'when the penalties and interests begin to accrue against the taxpayer and enabling the latter to determine his remedies[.]' Thus, it must be 'sent to and received by the taxpayer, and must demand payment of the taxes described therein within a specific period.' The disputed Final Assessment Notice is not a valid assessment.

First, it lacks the definite amount of tax liability for which respondent is accountable. It does not purport to be a demand for payment of tax due, which a final assessment notice should supposedly be. An assessment, in the context of the National Internal Revenue Code, is a 'written notice and demand made by the [Bureau of Internal Revenue] on the taxpayer for the settlement of a due tax liability that is there definitely set and fixed.' Although the disputed notice provides for the computation of respondent's tax liability, the amount remains indefinite. It only provides that the tax due is still subject to modification, depending on the date of payment. Thus: The complete details covering the aforementioned discrepancies established during the investigation of this case are shown in the accompanying Annex 1 of this Notice. The 50% surcharge and 20% interest have been imposed pursuant to Sections 248 and 249 (B) of the [National Internal Revenue Code], as amended.

Please

note, however, that the interest and the total amount due will have to be adjusted if prior or beyond April 15, 2004.

(Emphasis Supplied)

Second, there are no due dates in the Final Assessment Notice. This negates petitioner's demand for payment. Petitioner's contention that April 15, 2004 should be regarded as the actual due date cannot be accepted. The last paragraph of the Final Assessment Notice states that the due dates for payment were supposedly reflected in the attached assessment:

In view thereof, you are requested to pay your aforesaid deficiency internal revenue tax liabilities through the duly authorized agent bank in which you are enrolled within the time shown in the enclosed assessment notice. (Emphasis in the original) However, based on the findings of the Court of Tax Appeals First Division, the enclosed assessment pertained to remained unaccom plished.

Contrary to petitioner's view, April 15, 2004 was the reckoning date of accrual of penalties and surcharges and not the due date for payment of tax liabilities.

The total amount depended upon when \

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue respondent decides to pay. The notice, therefore, did not contain a definite and actual demand to pay.

Compliance with Section 228 of the National Internal Revenue Code is a substantive requirement.

It is not a mere formality.

Providing the taxpayer with the factual and legal bases for the assessment is crucial before proceeding with tax collection. Tax collection should be premised on a valid assessment, which would allow the taxpayer to present his or her case and produce evidence for substantiation. (Emphases and underscoring added) In this case, the FDDA56 provides in part, as follows: It is requested that your aforesaid deficiency tax be paid immediately upon receipt hereof, inclusive of penalties incident to delinquency. This is our final decision. (Emphasis added) Notably, the FDDA does not indicate a valid due date for payment. In particular, the due date reflected in the Assessment Notice is "March 31, 2021 ",57 although the same was only issued on "0 1 JUN 2021 ",58 and received by petitioner on June 2, 2021.59 Clearly, the prescribed due date stated therein for the payment of the alleged deficiency tax already lapsed when the FDDA and the corresponding Assessment Notice were received by petitioner, making it impossible for petitioner to comply with. It is as if the due date therein "remained unaccomplished", thus, negating compliance with the requirement that the assessment must contain a demand for payment within a prescribed period.

To be sure, as held in the Fitness By Design case, an assessment must demand payment of the taxes described therein within a specific period. Considering that the subject Assessment Notice accompanying the FDDA failed to properly indicate the due date when the subject deficiency tax must be paid, no proper demand thereof within a specific period was validly made.

Hence, the FDDA dated June 1, 2021, wherein respondent failed to provide the definite amount of tax to be paid and to state the valid due date for the payment of the subject deficiency tax in the attached Assessment Notice is void. \

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Nonetheless, it is already settled that a decision of respondent on a disputed assessment differs from the assessment itself. Hence, the invalidity of one does not necessarily result in the invalidity of the other.60 Considering the infirmity of the FDDA does not affect the validity of the FLD, and that the latter does not suffer from the same defect as the FDDA, the same should stand as valid.

Petitioner is liable for deficiency VAT for the period January 1, 2014 to June 30, 2014.

In the FLD dated April 10, 2017, with attached Details of Discrepancies and Audit Result/Assessment Notice,61 petitioner was assessed for deficiency VAT and compromise penalty for the period January 1, 2014 to June 30, 2014, in the aggregate amount of P664,868,918.41, inclusive of increments, summarized as follows:

VAT

Receipts subjected to VAT per VAT Returns

Add: Adjustments/Disallowances

Undeclared Sales per SLS vs TPI

Unaccounted Source of Cash

Unsupported Non-VAT Official Receipt per OR

Listing

Undeclared Sales from sale of property Output tax thereon

Less: Allowable Input Tax

Allowable Input Tax per VAT Returns

Less: Disallowances/ Adjustments

Disallowed Input Tax - Unsupported Input Tax per

SLP vs TPI

Disallowed input tax per TN Verification

Unsupported Presumptive Input Tax

Overclaimed Input Tax - Sources of Input per FS vs

VAT Return

VAT Due

Less: VAT Payments

Basic Deficiency VAT

Add: Interest (July 26, 2014 to April 30, 20 17)

TOTAL DEFICIENCY VALUE-ADDED TAX

ADMINISTRATIVE PENALTY

p 34,967,422.79 11,905,623.26 668,295,679.54 380,900,000.00 P545,900,531.98 7,196,217.98 176,088.41 265,357,459.18 23,846,751.32 Compromise Penalty- Failure to file and/or pay any internal revenue tax at the time or times required by law or regulation

P

50,000.00 '\ p 7,758,789,738.66 1,096,068,725.59 p 8,854,858,464.25 p 1,062,583,015.71 249,324,015.09 p 813,259,000.62 385,154,236.65 p 428,104,763.97 236,689,154.44 p 664,793,918.41 6° Commissioner of Internal Revenue vs. Liquigaz Philippines Corporation, et s~., G.R. Nos. 215534 and 215557, Aprill8, 2016.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Compromise Penalty- Failure to make, file or submit the complete SLP or supply correct and accurate information therein at the time required

TOTAL AMOUNT DUE

25,000.00 75,000.00 p 664,868,918.41 The following items, which are discussed in detail hereafter, comprise the subject assessment:

a) Undeclared Sales per Summary List of Sales (SLS) vs. Third

Party Information (TPI)

b) Unaccounted Source of Cash c) Unsupported Non-VAT Official Receipt (OR) per OR Listing d) Undeclared Sales from sale ofproperty e) Disallowed Input Tax- Unsupported Input Tax per SLP vs TPI f) Disallowed input tax per TIN Verification g) Unsupported Presumptive Input Tax h) Overclaii:ned Input Tax - Sources of Input per Financial

Statements (FS) vs VAT Return

a. Undeclared Sales per SLS vs. TPI- ?34,967,422. 79

:P

34,967,422.79

:P

11,905,623.26 :P 668,295,679.54 :P 380,900,000.00

:P

7,196,217.98

:P

176,088.41 :P 265,357,459.18

:P

23,846,751.32 Based on the comparison of petitioner's SLS and TPI, respondent found alleged undeclared sales ofP34,967,422.79:62

Per SLS

Per TPI

Discrepancy- Undeclared Sales

:P 191,380,312.54 226,347,735.33 p 34,967,422.79 Petitioner argues that the assessment has no factual and legal basis and that respondent did not provide copies or details of the confirmation letters to petitioner to validate the TPI. Petitioner's argument has legal basis. It correctly cited pertinent portions of Revenue Memorandum Order (RMO) No. 46-2004 issued on September 2, 2004,63 which states:

III. PROCEDURES

XXX

XXX

XXX

Action on Protested LNs due to TPI discrepancy \ 62 Schedule I, "Annex- A", Exhibit "P-6", Docket- Vol. 2, pp. 912 to 914. and Exhibit "R-5", BIR Records (Exhibit "R-8"), pp. 347 to 349. 63

SUBJECT:

Additional Supplement and Guidelines in Handling Letter Notices with Discrepancies Arising from Data Matching Processes as defined in Revenue Memorandum Order (RMO) Nos. 34- 2004 and 30-2003, as amended by RMO Nos. 42-2003 and 24-2004, which remain Unserved, have been Served but are Without Response, or are Under Protest by Taxpayers.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

XXX

XXX

XXX

3. Obtain Sworn Statements from TPI sources (Annexes 'B' and 'C') attesting to the veracity of the data provided.

XXX

XXX

XXX

4. Provide the taxpayer a brief 'grace period' (no more than ten [10] days) to reconcile the figures in his Sworn Statement against those of the TPI source. (Emphasis added) The above-mentioned provision confirms that the BIR is required to verify the amounts it obtained from its computerized/third-party matching by securing confirmation or certification from the TPI source. Respondent avers that it sent confirmation letters to petitioner's customers to support the TPI. 64 Records show that respondent indeed sent confirmation letters to the TPI sources.65 However, examination of the subject documents reveals that only Store Specialist Inc. certified its purchases in the amount of P64,123,923.79 as opposed to petitioner's declared sales from the same customer of P56,259,936.35, showing a discrepancy ofP7,863,987.44.66 The rest of the confirmation letters are not certified by the TPI sources. To stress, without obtaining sworn statements from TPI sources, the data gathered from the computerized/third party matching are left unverified, and the resulting assessment is void for lack of factual and legal basis based on the case of Commissioner of Internal Revenue vs. Hantex Trading Co., Inc., 67 wherein the Supreme Court held that, in order to be valid, an assessment must be based on actual facts supported by credible evidence.

In any event, petitioner claims that timing differences in the reporting of taxable purchases by third parties as against the reporting of sales by petitioner, and inaccurate or erroneous reporting on the part of certain third parties are the reasons for the discrepancies. In the case of petitioner's sales to its customer Store Specialist, Inc., the latter allegedly erred in "reporting of input taxes on payments of security deposits or reimbursable claims or event sponsorship payments that were directly used for the event expenses. These were covered with non-VAT official receipts (ORs) and the TPis should not have reported the purchases as input tax credits in its VAT 64 Par. 39, Answer, Docket- Vol. I, p. 287. 65 BIR Records (Exhibit "R-8"), pp. 567 to 575. 66 !d. at 573 to 574.

67 G.R. No. 136975, March 31,2005.

\

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue reporting. Other payments include security deposits, reimbursement of real property taxes (RPT) and construction bonds, which are all not subject to VAT and were covered by non-VAT ORs. "68 The Court-commissioned ICP A, however, reports that he was not able to verify the TPI "because the information provided by the BIR does not present the breakdown on a per transaction level of the amounts and transaction references".69 As an alternative way to verify any unrecorded sales, the ICPA compared petitioner's gross taxable sales per general ledger (GL) with the amount reported in its quarterly VAT Returns as shown in Annex 1-13 of the ICP A Report. He then traced the amounts recorded in petitioner's gross taxable sales GL account and cash receipts schedule to the related VAT supporting documents of the various customers identified in the BIR assessment.

This resulted in a discrepancy of P1,832,235.97, which shows that petitioner reported sales that are lower than those indicated in the VAT supporting documents. 70 Be that as it may, both petitioner and the ICP A failed to substantiate the security deposits, reimbursement of RPT and construction bonds paid by Store Specialist, Inc., which are allegedly covered by non-VAT ORs. Thus, this assessment item should be adjusted to the amount of P7,863,987.44, representing the discrepancy between petitioner's SLS and the amount certified by its customer Store Specialist Inc. per confirmation letter sent by respondent.

b. Unaccounted source o[cash- Pll,905,623.26 After comparing petitioner's Summary List of Purchases (SLP) against the sales declarations per third parties, respondent found that the amounts per TPI are larger than those in petitioner's SLP. Respondent then assessed petitioner of an alleged unaccounted source of cash amounting to P11,905,623.26: 71

Per TPI

Per SLP

Discrepancy -Unaccounted source of cash 68 Pars. 35 to 40, Petition for Review, Docket- Vol. I, pp. 15 to 16. p 32,715,544.25 20,809,920.99 p 11,905,623.26

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

As previously discussed, respondent is required to verify the amounts it obtained from its computerized/third-party matching by securing confirmation or certification from the TPI source. If unverified, the resulting assessment is void for lack of factual and legal basis. Further, respondent's findings of petitioner's under-declaration of purchases does not, by itself, necessarily result in the imposition of VAT. What is critical to be shown in the imposition or assessment of VAT is that the taxpayer is paid or ought to be paid an amount of money or its equivalent, in consideration of a sale, and not when said taxpayer purchases or disburses an amount of money to purchase goods or properties. Simply put, the VAT is imposed on the sale, not on the purchases. Moreover, even if these alleged unaccounted purchases are to be treated as unaccounted sources of cash, which are subject to output VAT, the same will be offset by recording the equivalent payments as expenses or purchases from which input tax credits may be claimed. Hence, no additional VAT will result from the said transactions.

While all presumptions are in favor of the correctness of tax assessments, the assessment itself should not be based on mere presumptions no matter how reasonable or logical the presumption might be.72 In order to stand judicial scrutiny, the assessment must be based on actual facts. The presumption of correctness of assessment, being a mere presumption, cannot be made to rest on another presumption. 73 For lack of factual basis, the deficiency VAT assessment arising from petitioner's alleged unaccounted source of cash ofP11,905,623.26 should be cancelled.

c. Unsupported

Non-VAT

Official

Receipt

per

OR

Listing

?668,295, 679.54 Respondent's verification disclosed that petitioner's non-VAT receipts per summary of ORs amounting to P668,295,679.54 are unsupported."~\' 72 The Collector of Internal Revenue vs. Alberto D. Benipayo, G.R. No. L-13656, January 31, 1962; Commissioner of Internal Revenue vs. Island Garment Mam!facturing Corporation, et al., G.R. No. L- 46644, September 11, 1987.

73 Commissioner of Internal Revenue vs. Hantex Trading Co., Inc., supra.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Petitioner avers that the bulk of this assessment item pertains to sales to PEZA-registered entities enjoying zero-rated and/or exempt transactions; hence, notsubject to 12% VAT.75 In support of its protest to the FLD, petitioner submitted to respondent Certificates of Registration and Certifications issued by the PEZA to the following customers, amounting to P252,949,473.75, viz.:

PEZA Certificate/

Amount

Certification

(Annex 3-1, Exhibit

(Exhibit "R-8")

Customer Name

"P-12") 76

pp. 403 to 404 ANTHEM SOLUTIONS, INC.

p 43,170,278.07

C3/CUSTOMERCONT ACTCHANNELS

pp. 40 I to 402 PHILIPPINES, LTD.

93,639,495.12 p.400 DATA HORIZON PHILS, INC.

651,491.56 p.399 HA TCHASIA.COM, INC.

5,460,446.10 pp. 397 to 398 IP CONVERGE DATA SERVICES, INC.

5,488,737.26

p. 395 LOGICA (PHILIPPINES) INC.

12,279,046.74 pp. 391-394 NEC TELECOM SOFTWARE PHILS., INC.

6,415,299.24

REAL PROPERTY INNOVATIVE

pp. 388 to 389 SOLUTIONS, INC.

2,465,440.00 pp. 386 to 387 SHORE SOLUTIONS, INC.

4,740,182.51 pp. 380 to 381 ST. LUKE'S MEDICAL CENTER, INC.

32,439,879.25 pp. 384 to 385 TERADAT A GCC (PHILIPPINES), INC.

22,525,459.83

TOWERS WATSON GLOBAL BUSINESS

pp. 382 to 383 SERVICES, INC.

23,673,718.07

TOTAL

p 252,949,473.75 Respondent's examiners considered the Certificates of Registration and Certifications issued by the PEZA to be sufficient in their memorandum report dated January 21, 2021.77 The ICPA reports that the remaining assessment for unsupported non- VAT ORs could comprise of either the following or just portions thereof, to wit: 78

Particulars

Sale of Development Rights (Alpha Plus Property

Holdings)

Construction Bond (various) Security Deposits (various) St. Luke's Medical Center SOA Adjustments 75 Par. 46, Petition for Review, Docket- Vol. I, p. 18. 76 USB (Exhibit "P-11 ").

Reference

Annex 3-2-A

Annex 3-2-B

Annex 3-2-C

Annex 3-2-D

77 Exhibit "R-6", BIR Records (Exhibit "R-8"), pp. 732 to 749. 78 Exhibit "P-12", Docket- Vol. 2, at p. 792.

Amount

p 174,832,000.00 90,050,788.37 32,731,416.57 30,384,445.00

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

RPT reimbursements (various)

Annex 3-2-E

10,241,896.60 Principal loan repayment (Bonifacio Transport

Annex 3-2-F

5,507,207.34

Corporation)

Adjustments

Annex 3-2-G

(79,681.99)

Total

p 343,668,071.89 Petitioner submitted various ORs/9 Statements of Account (SOAs),80 and journal entries from its computerized accounting system (CAS)81 to support petitioner's non-VAT receipts. An examination by the Court shows that the following are supported by the aforementioned documents, viz. : Supported by Official Receipts (Exhibits "P-11-CCCC-1" to "P-

11-CCCC-125" and "P-11-CCCC-128" to "P-11-CCCC-271 ")

Customer Name

Amount

ACTIVATIONS ADVERTISING

I'

50,000.00

AFFINITY HEALTH & WELLNESS

538,902.00

ALPHA PLUS PROPERTY HOLDI

174,832,000.00 ALVEO LAND CORP. (OFFICE) (0.01) AMERICAN MOTORCYCLES, 10,000.00 ANTHEM SHOPPES INC.

20,000.00 ARIA RESTAURANT CONCEPTS INC.

-

ARMYNA VY BURGER AND BURRI

9,743.32 A TLASSIAN PHILIPPINES, IN 748,128.00

AYALA CORPORATION- HONDA

596,250.00

AYALA GREENFIELD DEVELOPM

591,255.00

AYALA PROPERTY MANAGEMENT

(25,366.77)

B + B STUDIO

22,477.26

BANCO DE ORO UNIBANK INC

127,562.50

BANK OF THE PHILIPPINE IS

5,895.63 BASES CONVERSION DEV'T. A 167,567.20

BELAGUA CORPORATION (FULL

367,092.00 BEYOND FORT GLOBAL INC.

(0.02)

BF CORPORATION

64,650.00 BGNORTH PROPERTIES INC.

16,007,200.37 BGSOUTH PROPERTIES, INC.

18,523,600.00 BGWEST PROPERTIES, INC.

30,000.00

BONIFACIO ESTATE SERVICES

-

BONIFACIO GAS CORPORATION

29,345.77

Nature

Security Deposits

Construction Bond

Sale of Development Rights

Adjustments

Security Deposits

Security Deposits

Adjustments

Adjustments

Construction Bond

Security Deposits and RPT

reimbursements

Construction Bond and Security

Deposits

Adjustments

Security Deposits

RPT reimbursements

Security Deposits

Security Deposits

RPT reimbursements and Security

Deposits

Adjustments

Security Deposits

Security Deposits, RPT reimbursements and Construction

Bond

Construction Bond

Construction Bond

Adjustments

Security Deposits and Adjustments

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

BONIFACIO HOTEL VENTURES

250,125.00 RPT reimbursements Principal loan repayment

BONIFACIO TRANSPORT CORP

4,889,583.93

(Bonifacio Transport Corporation)

BREWS AND BLUES INC.

833,160.00

Security Deposits

BRITISH CHAMBER OF COMMER

90,000.00

Security Deposits

BRITISH UNITED

10,000.00

Security Deposits

CAG LEARNING SYSTEMS, INC.

-

Adjustments

CASUAL CLOTHING

50,000.00

Security Deposits

CATS MOTORS, INC.

28,906.25 RPT reimbursements

CELINE MARKETING CORPORATION

(6,095.49)

Adjustments

CHEFS AT THE FORT, INC.

-

Adjustments

Construction Bond and Security

CINCO CORPORATION

351,150.00

Deposits

Construction Bond and Security

CITIMAX GROUP INC.

7, I 00,000.00

Deposits

CLARKSVILLE FOOD INC.

I ,000,000.00

Construction Bond

COFFEE MASTERS, INC. (SEA (0.01)

Adjustments

CREACTIV A TIONS, INC 100,000.00

Security Deposits

CREATIVE LAB INC.

(17,857.14)

Adjustments

DAIICHI PROPERTIES INC.

13,000,000.00

Construction Bond

DATEM, INC.

7,000,000.00

Construction Bond

DEL MONTE PHILIPPINES, IN (3,466, 111.80)

Security Deposits

DRAUGHT GASTRO-PUB, INC.

351,812.10

Security Deposits

Construction Bond and Security

EASTERN TELECOMMUNICATION

68,250.00

Deposits

ERICKA ALEXANDRIA

10,000.00

Security Deposits

EST. CUE, INC.

-

Adjustments

ESTIMA, INC.

30,000.00

Security Deposits

EVENTECHNIQUE INC.

10,000.00

Security Deposits

EVERY NATION LEADERSHIP I

-

Adjustments

EXPERCS INC.

(0.05)

Adjustments

FAMILY VACCINE

80,850.00

Security Deposits

FOODPARKS BY RAINTREE. IN 69,513.00

Security Deposits

Security Deposits and RPT

FORT STRIP, INC.

922,747.83 reimbursements

Construction Bond and Security

FORTE SHOWROOM- DIMENSIO

802,420.20

Deposits

FOR THINKER INC.

50,000.00

Security Deposits

FRESH HEAL THY JUICE BOOST

86,650.00

Security Deposits

GEARHEAD INC. (JBL) -

Adjustments

GLOBAL ASIA

20,000.00

Security Deposits

Security Deposit and RPT

GLOBAL CITY AUTO SALES IN

105,000.00 reimbursements GOURDO'S INC. (2001010097 86,193.00

Security Deposits

GREEN TEE INC. UNITED COL -

Adjustments

GREENLIFE ORGANICS, 10,000.00

Security Deposits

GRUPO A THLETICA INC.

1,762,794.00

Security Deposits

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

H & F RETAIL CONCEPTS INC

(8,996.00)

Adjustments

Construction Bond and Security

HAPPY LEMON GROUP PHILS I

522,288.00

Deposits

HINGE INQUIRER PUBLICA TIO

30,000.00

Security Deposits

HW-ANGS, INC.

50,000.00

Security Deposits

ICONIC ADVANTAGE INT'L., -

Adjustments

Construction Bond and Security

IKKORYU FUKUOKA RAMEN INC

1,033,344.00

Deposits

INTELLIGENT BEAUTY SKIN S

86,369.25

Security Deposits

IP VENTURES, INC.

92,164.03

Security Deposits

JALA PELOS INC.

799,119.00

Construction Bond

Security Deposits and RPT

JOLLIBEE FOODS CORPORATION

313,000.22 reimbursements JUST FOR KIDS, INC. (LITT 66,370.19

Security Deposits

KARLA ROCHELLE

30,000.00

Security Deposits

KATSURAMEN, INC.

1,596,097.50

Construction Bond

KENRICH SIDEFAME CORP

(45,000.00)

Adjustments

Construction Bond and Security

KICHITORIA FOODS CORPORA T

1,301,664.00

Deposits

KIMUKA TSU, INC.

548,650.66

Security Deposits

KLAB CYSCORPIONS, INC.

(0.05)

Adjustments

LINEARGROUP PHILS INC.

(0.01)

Adjustments

L'OPERA INC.

64,642.80

Security Deposits

LOVING LOKAL RESTAURANT I

296,900.40

Security Deposits

M2.0 COMMUNICATIONS, INC.

30,000.00

Security Deposits

MAKATIDEVELOPMENTCORPOR

4,000,000.00

Security Deposits

MANCOR PERFORMANCE CLINIC

87,500.01 RPT reimbursements

MANILA WATER TOTAL

90,405.00

Security Deposits

MASTER SPORTS CORP.

-

Adjustments

MAXICUISINE, INC.

126,877.05

Construction Bond

MC HOME DEPOT (FORT BONIF

2,486,369.84 RPT reimbursements

Construction Bond and Security

MCTEVES LAUNDRY SERVICES

96,714.24

Deposits

MDC BUILDPLUS, INC.

4,796.31

Adjustments

MEGA WIDE CONSTRUCTION COR

1,000,000.00

Security Deposits

Security Deposits and RPT

MELVILLE REALTY CORP. (MO 238,960.00 reimbursements

MERCA TO CENTRALE PHILIPPI

30,000.00

Security Deposits

Construction Bond and Security

MR. FRANKS HOTDOG & NACHO 191,986.66

Deposits

MY MAMOU FOOD CONCEPTS IN

21,225.60

Security Deposits

NATION BROADCASTING CORP.

130,437.50 RPT reimbursements NEW BOMBAY FOODS INC.

14,452.50

Security Deposits

NEW GOLDEN CITY BUILDERS

12,000,000.00

Construction Bond

Security Deposits and RPT

NEW KANLAON CONSTRUCTION

408,800.68 reimbursements NITRO ASIA COMPANY INC.

57,261.20

Security Deposits

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

NO LIMITS FOODS INCORPORA

1,000,000.00

Security Deposits

ORICA PHILIPPINES, INC.

54,477.90

Security Deposits

PACIFIC LICENSING STUDIO

100,000.00

Security Deposits

PETALUMA PROPERTIES INC.

255,125.00 RPT reimbursements

PHILIPPINE ARMY

10,000.00

Security Deposits

Construction Bond and Security

PHILIPPINE F AMIL YMAR T CVS

481,896.00

Deposits

PHILIPPINE NATIONAL BANK

432.76

Security Deposits

Construction Bond and Security

PHILIPPINE SAVINGS BANK-

102,316.43

Deposits

PINOY DINER CORPORATION

64,156.50

Security Deposits

Construction Bond and Security

PRU LIFE INSURANCE CORP.

1,925,576.50

Deposits

QUORUM INTERNATIONAL INC.

30,000.00

Security Deposits

RALPH'S WINES & SPIRITS

14,940.00

Security Deposits

RED RIBBON BAKESHOP, INC.

45,625.00 RPT reimbursements REGAL ENTERTAINMENT, 30,000.00

Security Deposits

RUST AN COFFEE CORP. - ST A 337,620.00 RPT reimbursements

SABRE CONSTRUCTION & DEY'

29,125.00 RPT reimbursements RPT reimbursements and Security SCOTTLAND INC. (THE SPA) 285,404.00

Deposits

SENSER V ENTERPRISE

-

Adjustments

SIETE CO MID A CORPORATION

(0.1 0)

Adjustments

SIMPLY MOVING

50,000.00

Security Deposits

SNAPSNACK FOODS CORP.

250,277.40

Security Deposits

SOUTH STAR DRUG INC.

14,399.91

Security Deposits

SPORTS PLEX PHILS. INCORP (0.01)

Adjustments

RPT reimbursements and St. Luke's ST. LUKE'S MEDICAL CENTER 30,599,560.00

Medical Center SOA Adjustments

Construction Bond, Security STORE SPECIALIST INC.

9,601,565.10 Deposits and RPT reimbursements SUNVISION CABLE, INC.

-

Adjustments

Security Deposits and RPT

SUYENCORP.

246,179.48 reimbursements

THE BURGERS UNLIMITED INC

-

Adjustments

THE IDEAFIRST COMPANY, IN 20,000.00

Security Deposits

TIME CONCEPTS SALES, INC.

-

Adjustments

TRIMARK BHS VENTURES, INC 54,364.50

Security Deposits

UNIGLOBE TRAVEL WARE CO.

146,556.00

Security Deposits

UP JUNIOR MARKETING

Security Deposits

ASSOCIATION

20,000.00

UR'E ADPORTAL SOLUTIONS

50,000.00

Security Deposits

Security Deposits and Construction

VA BENE PASTA DELI

875,328.00

Bond

VODKA TEKA, INC.

141,006.60

Security Deposits

W GLOBAL REALTY, INC.

376,204.41 RPT reimbursements W OFFICES, INC.

375,187.50 RPT reimbursements WHITEPLANET INC.

114,300.00

Security Deposits

\

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Construction Bond and Security

WHOLELIVING CORPORATION

1,622,592.00

Deposits

WINGKING FOOD STATION

10,800.00

Security Deposits

Security Deposits and RPT

WUMACO INC.

311,307.20 reimbursements

YELLOW CAB PIZZA CO

67,453.10

Security Deposits

TOTAL

p 325,901,569.83

Supported by Statements of Account

Exhibit No.

Customer Name

Amount

Nature

"P-11-DDDD-23"

RPT

CATS MOTORS, INC.

p 57,812.50 reimbursements

"P-11-DDDD~35"

RPT

FORT STRIP, INC.

154,137.50 reimbursements

"P-I1-DDDD-59"

L'OPERA INC.

-

"P-11-DDDD-68"

MANCOR PERFORMANCE CLINIC

-

"P-11-DDDD-113"

SR METALS INC

86,179.36

Security Deposits

"P-11-DDDD-123"

RPT

UNIGLOBE TRAVEL WARE CO. I 51,750.00 reimbursements

TOTAL

p 349,879.36

Supported by Journal Entries

Exhibit No.

Customer Name

Amount

Nature

"P-11-EEEE-9"

Construction Bond and "P-11-EEEE- and RPT

11" BGWEST PROPERTIES, INC.

p 16,349,900.82 reimbursements

"P-11-EEEE-12"

Security Deposits and "P-11-EEEE-

13"

BRAND ON DEMAND

60,000.00

"P-11-EEEE-24"

EQUIPMENT RENTAL

50,000.00

Security Deposits

"P-11-EEEE-29"

GERMAN-PHILIPPINE CHAMBER

100,000.00

Security Deposits

"P-11-EEEE-41"

PERCEPTIONS

50,000.00

Security Deposits

"P-11-EEEE-42"

PET CITY HOBBY

50,000.00

Security Deposits

"P-11-EEEE-46"

SA TCHMIGROUP INC.

30,000.00

Security Deposits

"P-ll-EEEEc48"

SUYEN CORPORATION

30,000.00

Security Deposits

TOTAL

p 16,719,900.82 Considering that the foregoing documents submitted by petitioner show that the transactions were not subject to 12% VAT, these amounts should be deducted from respondent's assessment and only the amount P72,374,855.78 should be retained for being unsupported, computed as follows:

Unsupported Non-VAT Official Receipt per OR Listing

Less: Supported by PEZA certificates of registration and certifications

Supported by ORs

p 252,949,473.75 325,901,569.83 \ p 668,295,679.54

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Supported by SOAs

Supported by Journal Entries

Adjusted unsupported Non-VAT ORs per OR Listing 349,879.36 16,719,900.82

d. Undeclared sales {rom sale o(property- ?380,900,000.00 595,920,823.76 p 72,374,855.78 Respondent found a discrepancy in petitioner's sale of property by comparing the amount per deed of sale against the zonal valuation, computed as follows: 82

Deed of Sale

Zonal Value

OR

Per square meter p 30,000.00 p 100,000.00 p 29,068.90 5,370.00 sqms.

5,370.00 sqms.

5,370.00 sqms.

Total Selling Price

P161,100,000.00 p 537,000,000.00 P !56, I 00,000.00

Less: Declared per OR

156, I 00,000.00 !56, I 00,000.00

Undeclared Sales

p 5,000,000.00 p 380,900,000.00 In its protest to the FLD, petitiOner explained that the foregoing amount pertained to the transaction with Alpha Plus Property Holdings Corp. (Alpha Plus) but claimed that it did not sell a piece of land, but that Alpha Plus purchased an additional development right as regulated by the City Government of Taguig, which subjects certain development restrictions based on the approved masterplan. Essentially, petitioner "sold to Alpha Plus air rights taken from its lots to be transferred to the lot of Alpha Plus so it could construct taller buildings (i.e. with more allowable gross floor area or 'GFA') on Alpha Plus' lots in BGC" .83 To support the foregoing, petitioner submitted to respondent the Agreement on Assignment of Lease between petitioner and Alpha Plus and the approval of transfer of development rights issued by the City of Taguig,84 and the ORs pertinent to the transaction.85 Respondent's examiners considered petitioner's explanation and recommended to cancel the subject assessment item: 86 It was found that per Deed of Sale executed by both parties, the selling price was P30,000.00 per square meter for the lot with a total area of 5,370 square meters, hence, it resulted to a selling Pl56,100,000.00. The difference of P5,000,000.00 was already subjected to VAT on September~ 82 Schedule 4, "Annex- A", Exhibit "P-6", Docket- Vol. 2, p. 923, and Exhibit "R-5", BIR Re~rds (Exhibit "R-8"), p. 338.

83 Exhibit "P-7", Docket- Vol. 2, at pp. 930 to 931. 84 Exhibit "R-8", BIR Records, pp. 371 to 375. 85 !d. at 378 to 379.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Page 23 of 36 ·

10, 2013, evidenced by the Official Receipt attached on page 689. Hence, the assessment on this item is hereby cancelled. Based on the documents submitted, petitioner is able to prove that the transaction did not involve the sale of a piece of land but only additional development right; hence, use of the corresponding zonal value is not necessary. The Court finds respondent's examiners' recommendation to be in order; thus, this assessment item should be cancelled.

e. Disallowed Input Tax - Unsupported Input Tax per SLP vs. TP I - P7, 196,217.98 Respondent's verification of petitioner's SLP revealed that the purchases therein exceed the declared sales of the suppliers as reflected in the gathered TPI, consequently, the overclaimed input tax for said excess purchases should be disallowed. The amount P7,196,217.98 is computed as:s7

Purchases per SLP

Per TPI

Overclaimed purchases Unsupported purchases- No TPI

Total

VAT rate (12%) Unsupported input tax p 154,933,157.06 116,206,476.86 p 38,726,680.20 21,241,802.96 p 59,968,483.16 0.12 p 7,196,217.98 The BIR Records show that respondent sent confirmation letters to the TPI sources.88 An examination of the subject documents, however, reveals that only the following customers certified the respective amounts of sales to petitioner:89

Amount Certified

(For January- June

Name of Customer

2014)

Other Remarks

Professional Maintenance Group

p 8,336,835.89 p 633,044.30

(Zero-rated Sales)

McCann World Group Philippines Inc.

p 5,418,276.89 p 182,120.04

(For July- October 20 14)

TOTAL

p 13,755,112.78 The rest of the confirmation letters that are not certified by the TPI sources are left unverified, and the resulting assessment is void for lack of~ 87 Schedule 5, "Annex -A", Exhibit "P-6", Docket- Vol. 2, p. 924, and Exhibit "R-5", BIR Records (Exhibit "R-8"), p. 337.

88 BIR Records (Exhibit "R-8"), pp. 691 to 692 and 694 to 714. 89 I d. at 71 I to 714.

CTA Case No. I 0566 Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue factual and legal basis. To reiterate, in order to be valid, an assessment must be based on actual facts supported by credible evidence.90 Petitioner avers that there are timing differences and error in recording of the TPI.91 Said allegation, however, was not substantiated and proven by petitioner.

Thus, from respondent's schedule of unsupported purchases and computation of unsupported input tax, only the amount P730,500.31 should be retained as an assessment item:

Professional Maintenance Group Inc.

McCann Worldgroup Philippines Inc.

Total

VAT rate (12%) Unsupported input tax

SLP

Pl4,417,452.33 5,425,163.00 Pl9,842,615.33

TPI

p 8,336,835.89 5,418,276.89 Pl3,755,112.78 f Disallowed input tax per TIN Verification- P 17 6, 088.41

Difference

p 6,080,616.44 6,886.11 p 6,087,502.55 0.12 p 730,500.31 Respondent found that petitioner allegedly claimed input tax on purchases from non-VAT registered and unregistered taxpayer amounting to P176,088.41, broken down as follows: 92

Registered Name

Purchases

Input Tax

8mm Media Concepts Co 8mm Media Concepts Co

Daniel Tan Photography

Empress Cool Airconditioning

Empress Cool Airconditioning

Marcelo J Capalungan Jr

Personnel Management Assoc of the Phils

Rollstar General Contractor

Rollstar General Contractor

TOTAL

p 29,464.25 p (29 ,464.25) 40,178.58 246,428.58 439.17 466,071.42 714,285.67 1,467,403.42 p 3,535.71 p (3,535.71) 4,821.43 29,571.43 52.70 55,928.57 85,714.28 176,088.41 The Court examined petitioner's SLPs93 and found the same purchases listed therein. \ 90 Refer to Commissioner of Internal Revenue vs. Hantex Trading Co .. Inc .. supra.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Relative thereto, petitioner submitted ORs of the foregoing purchases of services,94 which was examined by the ICPA. Further examination by the Court shows that purchases from Daniel Tan Photography and Marcelo J. Capalungan, Jr. are supported by non-VAT 0Rs,95 purchase from Personnel Management Association of the Philippines is unsubstantiated, and purchases from Rolls tar General Contractor (Rolls tar) are supported by VAT-registered ORs, to wit:

Exhibit No.

Vendor Name

Net ofVAT

Input Tax

"P-11-FFFF-4"

Rollstar General Contractor

p 466,071.42 p 55,928.57

"P-11-FFFF -5"

Rollstar General Contractor

714,285.67 85,714.28

TOTAL

p 1,180,357.09 p 141,642.85 Moreover, Rollstar's ORs were printed with BIR Authority to Print issued in the year 2013 and was valid until2018.96 Thus, only input taxes in the adjusted amount of P34,445.56 should be disallowed, computed as follows:

Disallowed input tax per TIN verification Less: Purchases supported by VAT-registered ORs Adjusted disallowed input tax p 176,088.41 141,642.85 p 34,445.56

g. Unsupported Presumptive Input Tax- ?265,357,459.18 Respondent disallowed petitioner's claimed presumptive input tax (PIT) amounting to P265,357,459.1897 for being unsupported.98 The ICPA reports that petitioner's PIT came from the effectivity of Republic Act (R.A.) No. 7716 on January 1, 1996 when VAT was imposed for the first time on the sale of real properties. Upon the effectivity of R.A. No. 8424 on January 1, 1998, the provision on transitional input tax credits was retained.99 Petitioner argues that its entitlement to the PIT on its land acquisition has long been settled by the Supreme Court in several cases involving herein 94 Exhibits "P-11-FFFF-1" to "P-11-FFFF-5", !d. 95 Exhibits "P-11-FFFF-1" to "P-11-FFFF-3", !d. 96 Exhibits "P-11-FFFF-4" to "P-11-FFFF-5", !d. 97 Line 20D, Exhibit "P-9-e", Docket- Vol. 2, p. 949. \

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue petitioner. In all cases which have already become final, the Supreme Court decided in favor of petitioner. 100 The Court finds the same in order. Petitioner submitted its inventory list of properties as of February 29, 1996, 101 in accordance with Revenue Regulations (RR) No. 7-95. 102 The claimed transitional/presumptive input tax, which was reported in January and February 1996,103 came from its purchase of land from the government computed as follows: 104 Total land area (214 hectares) Acquisition cost per sqm Total land acquisition cost Presumptive Input tax rate Presumptive Input tax 2,140,000.00 sqm.

X

p 33,283.88 p 71,227,503,200.00 8% p 5,698,200,256.00 Utilization of the foregoing transitional/PIT credits started in the 4th quarter 1996 in the amount of'P28,413,783.00. 105 Succeeding utilization of petitioner's PIT is summarized herein, to wit: 106 SC Case No.

Tax Period

Amount

G.R. No. 181092 4th Quarter- 1996 p 269,340,469.45 G.R. No. 173425 I st Quarter - 1997 3 59,652,009.4 7 G.R. No. 175707 2"d Quarter - 1997 486,355,846.78 G.R. No. 170680 3rd Quarter- 1997 347,741,695.74 G.R. No. 167606 4th Quarter- 1997 15,036,891.26 G.R. No. 180035 1st Quarter - 1998 77,151,020.46

Total

p I ,555,2 77,933.16 In the year 1999, petitioner's PIT was reduced or adjusted by P1,704,134,656.00 in view of the reconveyance of properties to the Bases Conversion Development Authority (BCDA) pursuant to an Agreement with the latter dated September 17, 1999. 107 Hence, by the end ofthe TY 1999, petitioner's PIT balance is P2,170,849,772.00. 108 In tracing the movements in the subject PIT, the ICPA noted that petitioner "first claim[s] as credits against current output VAT, any amount of input VAT from current period purchases. Thus, any current period~\, 100 Exhibit "P-7", !d. at 931.

101 Exhibit "P-20", USB (Exhibit "P-11 ").

102 SUBJECT:

Consolidated Value-Added Tax Regulations.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue output VAT, in excess over the current period input VAT will then be allowed as offset against the PIT balance."109 The following shows petitioner's output tax and the corresponding input taxes offset against it until the 3rct quarter of the TY 2003, to wit: Exhibit No.

TY 2000

"P-11-U"

1st Quarter

"P-11-V"

2"d Quarter

"P-1 1-W"

yct Quarter

"P-11-X"

4th Quarter

Total

Output tax still due -to be offset against PIT PIT, beginning balance PIT, ending balance Exhibit No.

"P-11-Y"

"P-11-Z"

"P-11-AA"

"P-11-BB"

TY 2001

I st Quarter 2"d Quarter 3'd Quarter 4th Quarter

Total

Output tax still due - charge to PIT PIT, beginning balance PIT, ending balance Exhibit No.

"P-11-CC"

"P-11-DD"

"P-11-EE"

"P-11-FF-2"

TY 2002

I st Quarter 2"ct Quarter yct Quarter 4th Quarter

Total

Output tax still due- to be offset against PIT PIT, beginning balance PIT, ending balance Exhibit No.

"P-11-GG"

"P-11-HH"

"P-11-11"

TY 2003

I st Quarter 2"ct Quarter 3rct Quarter

Total

Output tax still due -to be offset against PIT PIT, beginning balance PIT, ending balance 109 Exhibit "P-12", Docket- Vol. 2, at p. 807.

Input Tax -Current

Purchases

p 26,746,353.83 I 04,3 89,211.68 20,372,872.59 15,488,331.40 p 166,996,769.50

Input Tax- Current

Purchases

p 19,235,660.17 20,896,259.91 I 7,450,550.31 9,984,999.56 p 67,567,469.95

Input Tax - Current

Purchases

p 16,524,342.33 14,970,145.56 8,022,592.30 4,897,629.49 p 44,414,709.68

Input Tax- Current

Purchases

p 13,360,853.99 I 0,859,599.57 14,770,812.20 p 38,991,265.76 Output tax p 15,365,729.32 I 06,152, I 66.06 52,537,888.03 20,378,288.94 p 194,434,072.35 p 27,437,302.85 p 2,170,849,772.00 p 2,143,412,469.15 Output tax p 258,369,395.84 p p p p 37,526,701.59 41,970,952.30 38,791,672.79 376,658,722.52 309,091,252.57 2,143,412,469.15 1,834,321,216.58 Output tax p 96,595,890.16 24,277,129.23 54,849,861.42 5,180,526.68 p 180,903,407.49

P

136,488,697.8 I p 1,834,321,216.58 p 1,697,832,518.77 Output tax p 16,266,312.44 II ,876,906.19 18,527,553.59 p 46,670,772.22 p 7,679,506.46 p I ,697,832,518.77 p I ,690,153,012.31 \

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

The ICPA also noted that petitioner did not report any PIT in the subsequent quarterly VAT returns until the 2nd quarter of 2014. 110 He, however, found that petitioner carried over input taxes in the amount of P617,068.84,lll "which was carved out from the PIT balance xxx and claimed as credits against output VAT in the 4th quarter of2003." 112 Petitioner computed the amount of PIT claimed in the 2nd quarter of 2014 which is available for use as follows: 113 Original lot acquired Return of 64 hectares Values of lot acquired from BCDA:

City Center ( 1 0-1)

Cathedral Site

Presumptive input VAT Applied against output VAT Area in sgm 2,140,000 (640,000) VAT on subsequent land delivered by BCDA

Adjustments:

Gross Amount

VAT

p 71,227,503,200.00 p 5,698,200,256.00 (21 ,301 ,683,200.00) (1 '704, 134,656.00) ----~~~~--~ p 3,994,065,600.00 p 795,381,949.00 72,307,449.91 241 ,640,969.00 ______ 2_:1 ,_96_7.:..._,3_60_._82_ p 94,274,810.73 p 3,994,065,344.00 (746,533,097.38) 94,274,810.73 p 3,341,807,057.35 VAT included in the standard cost of sold lots (2005-2012) (1 ,521,17 1,665.0 I) VAT Refund case (1 ,555,277 ,933.16) Available for use p 265,357,459.18 The Court notes that the return of 64 hectares (640,000 sqm) of land and the lots acquired from BCDA are in accordance with petitioner's Agreement with BCDA dated September 17, 1999 as mentioned previously. 114 In computing for the PIT available for use, however, the Court notes a discrepancy of P256.00 (P3,994,065,600.00 mmus P3,994,065,344.00) in the adjusted PIT. Following petitioner's computation, the PIT available as of the 2nd quarter of2014 is only 1'262,639,089.19, computed as follows: \ 110 Exhibit "P-12", Docket- Vol. 2, at p. 816.

Ill

Exhibit "P-1 1-JJ", USB (Exhibit "P-11").

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Original lot acquired Return of 64 hectares

Adjusted PIT

Add: VAT on subsequent land delivered by BCDA

Total

Less: Applied against output tax

Per VAT Refund Cases SC Decisions:

Tax Period

G.R. No.

Amount

4th Quarter- 1996 158885 p 28,413,783.00 4th Quarter - 1996 1st Quarter - 1997 2nd Quarter - 1997

Jfd Quarter - 1997

4th Quarter - 1997 1st Quarter - 1998 Per quarterly VAT returns:

1999 2000 2001 2002 2003 181092 173425 175707 170680 167606 180035 269,340,469.45 359,652,009.47 486,355,846.78 347,741,695.74 15,036,891.26 77,151,020.46 p 1,583,691,716.16 239,524,111.84 27,437,302.85 309,091,252.57 136,488,697.81 8,296,575.30 720,837,940.37 p 5,698,200,256.00 (1 ,704, 134,656.00) p 3,994,065,600.00 94,274,810.73 p 4,088,340,41 0. 73 VAT included in the standard cost of sold lots (2005-20 12) PIT Available for use 1,521,171,665.01 3,825,701,321.54 p 262,639,089.19 Considering that petitioner claimed the amount P265,357,459.18, 115 the difference of P2,718,369.99 (P265,357,459.18 less P262,639,089.19) will be retained as a disallowance.

h. Overclaimed Input Tax - Sources of Input per FS vs. VAT Return - ?23,846, 751.32 Respondent compared petitioner's Audited Financial Statements (AFS) with VAT returns and found an alleged overclaimed input tax of P23,846,751.32, broken down as follows: 116

Particulars

Cost of Real Estate Sold/Purchases

Development Cost, beg.

Development Cost, end

Cost of Services:

Technical services and project management Repairs and maintenance

Miscellaneous

115 Line 20D, Exhibit "P-9-e", Docket- Vol. 2, p. 949. p 1' 116,634,000.00 953,271,000.00 p 39,956,000.00 20,370,000.00 5,289,000.00

Tax Base

p 163,363,000.00 65,615,000.00 '

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Marketing and Selling Expenses

Management fees Marketing fees

Per Note 16

Management & Marketing fees unpaid

General and Administrative Expenses

Professional fees Estate Management fees Director's fees Utilities and water subsidy

Insurance

Communications

Security

Janitorial

Repairs and maintenance

Transportation

Supplies

Entertainment, amusement and rec.

Others

Additions:

Property and Equipment

Investment Property

Equipment

Construction in progress Input tax perFS Less: Input tax claimed per VAT Return

July to December

January to June

Overclaimed input tax- FS vs VAT Return 1st Semester 2nd Semester I ,549,000.00 I ,353,000.00 p p p 397,212,000.00 72,318,000.00 469,530,000.00 (368,577.00) 67,424,000.00 16,193,000.00 3,362,000.00 2,505,000.00 1,595,000.00 1,274,000.00 1,112,000.00 507,000.00 320,000.00 9,943,000.00 p 38,580,000.00 3,472,819,000.00 1"(307,949,83 7 .86) (25 8,868,035.54) 469,161,423.00 I 04,235,000.00 12,263,000.00 3,511,399,000.00 P4,326,036,423.00 0.12 P519,124,370.76 (566,817,873 .40) P( 47,693,502.64) P(23,846,751.32) (23,846,751.32) Petitioner avers that the foregoing assessment is "arbitrary and relies heavily on presumption and inferences, as it was quite probable that certain items in the AFS were left out by the examiners resulting into the discrepancy when compared to the VAT Returns." According to petitioner, respondent's examiners did not consider Note 29 of its AFS, the supplemental information required by the BIR per RR No. 15-2010, which shows that petitioner's total input taxes for the year 2014 amount to P1,350,129,000.00. 117 Further, the apportioning of the amounts per periods covered by the LOA by simple division instead of actually determining which amounts pertain to which periods is purely speculative. 118 \ 117 Exhibit "P-I 0", Docket- Vol. 2, at p. 1020. 118 Petitioner's Memorandum, Docket- Vol. 3, at pp. 1221 to 1223.

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

The ICPA then made a comparison of the total input taxes per Note 29 with the quarterly VAT returns I I 9 and revealed the following: I 20

Particulars

Reference

Input Tax

Per Quarterly VAT Returns

Annex 7-1

f>1 ,339,222,971.92

Per Supplemental Information Required by the

Exhibit P-1 0

1 ,350,129,000.00 Bureau of Internal Revenue under RR No. 15-

2010 in the 2014 AFS

Discrepancy

(P

10,906,028.0~ From the foregoing, it is clear that petitioner's input taxes declared in its AFS exceed the amount reported in its quarterly VAT returns for TY 2014.

The Court finds for petitioner.

Pursuant to Section 5(A) of the NIRC of 1997, as amended, respondent has the power to obtain information in determining the liability of any person for any internal revenue tax by examining any book, paper, record, or other data which may be relevant or material to such inquiry. This means that all of petitioner's books and records and supporting documents can and should be examined by respondent so that the deficiency tax liability determined by the audit is said to be based on facts, not on assumptions. In this case, respondent failed to ascertain the portion of petitioner's input taxes per AFS that pertain to the period January to June 2014. This information would have been obtained by examining petitioner's records and supporting documents. However, under the assumption that petitioner's purchases are distributed equally during the year, respondent's examiners divided the amounts picked out from the AFS by two to estimate the portion pertaining to the period January to June 2014. Thus, the resulting disallowance of allegedly over-claimed input taxes lacks factual basis and should be cancelled.

Petitioner is not liable for the compromise penalty imposed.

Respondent also imposed administrative penalties of P75,000.00, viz. :I2I \

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

II. Administrative Penalty Compromise Penalty - Failure to file and/or pay any internal revenue tax at the time or times required by law or regulation Compromise Penalty- Failure to make, file or submit the complete SLP or supply correct and accurate information therein at the time required

Total

p 50,000.00 25,000.00 p 75,000.00 Such imposition, however, cannot be sustained. Under RMO No. 7- 2015, 122 "compromise penalties are only amounts suggested in settlement of criminal liability, and may not therefore be imposed or exacted on the taxpayer" in the event that a taxpayer refuses to pay the same. It is well- settled that the Court has no jurisdiction to compel a taxpayer to pay the compromise penalty because by its very nature, it implies a mutual agreement between the parties in respect to the thing or subject matter that is so compromised, and the choice of paying or not paying it distinctly belongs to the taxpayer. 123 Absent a showing that herein petitioner consented to the compromise penalty, its imposition should be cancelled. The imposition of the same without the conformity of the taxpayer is illegal and unauthorized. 124 In sum, petitioner is liable for deficiency VAT for the period January to June 2014, in the total amount ofP13,111,977.06, summarized below: Receipts subjected to VAT per VAT Returns

Add: Adjustments/Disallowances

Undeclared Sales per SLS vs. TPI

Unsupported Non-VAT Official Receipt per OR

Listing

Output tax thereon

Less: Allowable Input Tax

Allowable Input Tax per VAT Returns

Less: Disallowances/Adjustments

Disallowed Input Tax- Unsupported Input Tax

per SLP vs. TPI Disallowed input tax per TIN Verification

Unsupported Presumptive Input Tax

VAT Due

Less: VAT Payments

Basic Deficiency Value-Added Tax

p 7,863,987.44 72,374,855.78 p 545,900,531.98 730,500.31 34,445.56 2,718,369.99 P7,758,789,738.66 80,238,843.22 P7,839,028,581.88 p 940,683,429.83 542,417,216.12 p 398,266,213.71 385,154,236.65 p 13,111,977.06 122 SUBJECT: The Revised Consolidated Schedule of Compromise Penalties for Violations of the National Internal Revenue Code.

123 The Philippines International Fair, Inc. vs. The Collector of Internal Revenue, et a!., G.R. Nos. L- 12928 and L-12932, March 31, 1962.

124 Commissioner of Internal Revenue vs. Lianga Bay Logging Co., Inc., eta!., G.R. No. L-35266, January 21' 1991.

,

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

In addition to the foregoing basic deficiency taxes, petitioner is liable to a penalty of 25% surcharge imposed on the basic deficiency taxes pursuant to Section 248(A)(3) of the NIRC of 1997, which reads: SEC. 248. Civil Penalties.-

(A)

There shall be imposed, in addition to the tax required to be paid, a penalty equivalent to twenty-five percent (25%) of the amount due, in the following cases:

XXX

XXX

XXX

(3) Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment; xxx Moreover, in accordance with Section 249(B) of the NIRC of 1997, as amended, petitioner is liable to pay deficiency interest at the rate of 20% per annum computed from the date prescribed for its payment until the full payment thereof.

However, with the effectivity of R.A. No. 10963, otherwise known as the TRAIN Law, on January 1, 2018, the 20% deficiency interest shall be computed until December 31, 2017 only, while the rate of 12% per annum shall be imposed starting January 1, 2018 until full payment of the deficiency taxes due. Notably, the TRAIN Law amended (i) the interest rates in Section 249 of the NIRC, as amended, (ii) the computation of deficiency interest from the date prescribed for its payment until the full payment thereof, or upon issuance of a notice and demand by the CIR, whichever comes earlier, and (iii) provides that the deficiency and delinquency interest prescribed under Subsections (B) and (C) thereof shall not be imposed simultaneously. In the present case, the Assessment Notice bears the date April 30, 2017 125 as the time prescribed to pay the total amount due found in respondent's assessment.

Likewise, pursuant to Section 249(C) of the NIRC of 1997, as amended, petitioner is liable to pay delinquency interest at the rate of 12% per annum computed from May 1, 2017 until full payment thereof. Thus, for the period January to June 2014, petitioner is liable to pay the aggregate amount of P28,581,157.39, consisting of basic deficiency VAT, surcharge, and deficiency and delinquency interests computed as of December 31, 2017 as follows: "'

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Basic deficiency VAT

Add: 25% Surcharge

20% Deficiency Interest

(July 26,2014 to April 30, 2017) [P13,111,977.06 X 20% X (1,010/365days)] Total Amount Due- Apri130, 2017

20% Deficiency Interest:

(May 1, 2017 to December 31, 2017) [P13,111,977.06 X 20% X (245/365days)]

20% Delinquency Interest:

(May 1, 2017 to December 31, 20 17) [P23,646,462.73 X 20% X (245/365days)] Total Amount Due- December 31,2017 p 13,111,977.06 3,277,994.26 7,256,491.41 p 23,646,462.73 1,760,238.02 3,174,456.64 p 28,581,157.39

WHEREFORE, in light of the foregoing considerations, the present Petitionfor Review is PARTIALLY GRANTED. Accordingly, respondent's administrative penalties being imposed in the total amount ofP75,000.00, as reflected in the Formal letter of Demand, for the period January 1, 2014 to June 30, 2014 is CANCELLED for lack of merit.

However, the deficiency value-added tax assessment for the period January 1, 2014 to June 30, 2014 is UPHELD WITH MODIFICATIONS. Hence, petitioner is ORDERED TO PAY respondent the aggregate amount of P28,581,157.39 as of December 31, 2017, representing basic deficiency VAT, surcharge and interest, broken down as follows: Basic deficiency VAT

Add: 25% Surcharge

20% Deficiency Interest (July 26, 2014 to April 30, 20 17) Total Amount Due- April 30, 2017 20% Deficiency Interest (May 1, 2017 to December 31, 20 17) 20% Delinquency Interest (May I, 2017 to December 31, 20 17) Total Amount Due- December 31,2017 p 13,111,977.06 3,277,994.26 7,256,491.41 P23,646,462. 73 1 '760,238.02 3,174,456.64 P28,581,157.39 In addition, petitioner is ORDERED TO PAY respondent delinquency interest at the rate of 12o/o per annum on the total amount due of P23,646,462.73 as of April 30, 2017, as determined above, or equivalent to the amount ofP7,774.18 126 per day, from January 1, 2018 until full payment thereof pursuant to Section 249(C) of the National Internal Revenue Code of 1997, as amended by the Tax Reform for Acceleration and Inclusion Law, and implemented by Revenue Regulations No. 21-2018. \ 126 P23,646,462.73 multiplied by 12% divided by 365 days.

CTA Case No.l0566 Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

Lastly, pursuant to Section 13 of Republic Act No. 9282, considering that this decision is partly favorable to the national government, the Bureau of Internal Revenue, through respondent, is hereby authorized to seize and distraint any goods, chattels, or effects, and the personal property, including stocks and other securities, debts, credits, bank accounts, and interests in and rights to personal property and/or levy the real property of petitioner in sufficient quantity to satisfy the tax or charge with any increment thereto incident to delinquency.

We Concur:

~/.~~ CORA~N G. FERRER- LO

S

Associate Justice

On leave MA. BELEN M. RINGPIS-LIBAN

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

cia Justice

Acting Second Division Chairperson

Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution and the Acting Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

Presiding Justice