Court of Tax Appeals
0I Repuhf, et al. vs. The Cmfrhssioner of Internal Revenue
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REPUHf,fC OF THE PHIIfTPPlNES
COURT OF TAX .t PPEAL8
QtiEZON CX'l'Y
GOODYEAR TI RE & RUBBER CO.,
OF THE PHILIPPINES , LTD.,
Petitioner ,
- versus -
THE CmfrHSSIONER OF INTERNAL
REVENUE ,
Respondent .
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C. T. A. CASE NO. 2095
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Petitioner , a corporati cn filing its income
t ax returns on the calendar year basis , was re-
quired by respondent to pay the sum of ¥260.10
and ~413 , 033 . 10 as deficiency income tax and
del inquency penal ty for the ·year 1968.
The basis
of the assessment in the amount of ~413 , 033 . 1 0
was the applicat ion , effective July 1, 1968 , of
the new corporate income tax rates provided in
Section 24 of the Tax Code , as amended by Republic
Act No . 5431.
~-- ith respect to t he asse s sment in
the sum of 1-260.10, this vias brout,;ht about by the
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disallowance of petitioner ' s claimed deduction for
patent charges in the sum of ~10 , 556 . 50 .
Petitioner has appeal ed only from that por-
tion of the decision dated February 20, 1970 as
regards the' slim of f:-413, 033 .10.
Petitioner con-
tends that under Section 10 of Republic ·Act No .
5431, whi ch provides that said Act nshall apply
DECISION -
C. T. A. CASE NO . 2095 2 t o income for taxable years beginning after Jwne 30 , 1968 , ' the increased rates provided therein are applicable only to its income beginning January 1 , 1969, and not July 1 , 1968 , since its taxable year , -vrhich is the calendar year , begins on January 1st and ends on December 31st of each yearo Respondent on the other hand contends that the new rates are applicable to income earned beginning July 1 , 1968, regardle ss of whether a corporation is on the calendar or fiscal year basis .
The i ss ue raised is not of f irst impre ssiono In several cases , it was held that the increased rates prescribed in Republic Act No. 5431 are applicable to income of calendar year corpora- tions , beginning January 1 , 1969 and not July 1 , 1968, as interpreted by respondent . (The Hanila Times Publishing Co ., Inc . vs . Comm. of Int . Rev. , C.T.A. Case No . 2263 , December 17 , 1973 , certio- rari denied in G.R. Noo L-38154, May 10, 1974; Pepsico , Inc . vs . The Co~nissioner of Int . Rev . , C. T •• Case No . 2245 , Feb. 19 , 1975, and cases cited therein. )
Consequently , the income of petitioner from July 1, 1968 to December 31 , 1968 i s still subject to the old rates pres- cribed in Section 24 of the Revenue Code , be- fore its amendment by Republic Act No . 543lo • • DEC I8 I 01'-7 r- C. T.A. CASE NO . 2095 3 \·lHEREFORE , the decision appealed from in so far as petitioner i s required to pay the s um of ¥413, 033 .10 as deficiency income tax and penalty is hereby r eversed .
Without pronounce- ment as t o costs .
SO ORDERED .
uezon City , October 9, 1975.
-~~ . ROHAN Ivi. Ul'iALI
Presiding
Judge
\iE'. CON CUR:
i ~t~~av.
I \TIS LAO R. ALV ARifJ;:-
Associate
Judge ~ _
f2-- i~< RA1'10N L. AV ANCENA