Court of Tax Appeals
0A the Philippine American Management Company, Inc. vs. ~ the Commissioner of Internal Revenue
REPUHI.IC OF THE PHILIPPI~ H~
COURT OF TAX APPEALS
QUE~ON CITY
THE PHILI PINE AMERICAN HAI\J"AGElvlENT
C OivlP ANY, I NC • ,
Petitioner ,
- versus -
THE COMlviiS IONER OF INTEHNAL
HEVENUE ,
Respondent .
X -
-
-
-
-
-
-
-
-
-
-
-
-
-
X
D E C I S I 0 N
C.T.A. CASE NO. 2~9~
This i s a claim for refund in the amount of
5 , 7~8 . 83 which petitioner paid as deficiency income
tax and. delinquency penalties asses sed from July 1,
1968 to December 1, 1968, based on the application
effe ct ive July 1, 1968 of the new corporate income
tax rates of 25% and 35% prescribed in Republic Act
No.
5~31 , which increased the old rates provided i n
Section 2~ of the Revenue Code .
Petitioner is a corporation which keeps its
books and records on the calendar year basiso
On
August 15, 1972, it paid under protest the total sum
of ~15 , 096 . ~3 , representing alleged deficiency income
tax for 1968 in the amount of ~9 , 311 . 58 res ulting
from the disallowance of certain salaries paid by
petitioner , and the deficiency assessment in the
amount of ~5 , 78~ . 83 due to the interpretation by the
B~reau of Internal Revenue that the new income t ax
rates provided in Republic Act No . 5431, which took
~ffe ct on July 1, 1968, are applicable to the net
DECISION -
CTA CASE NO. 2494 2 income of petitioner for the year 1968 . On December 11, 1972 , petitioner , through counsel, claimed from respondent the refund of the sum of~5 , 784 . 83 which it paid on account of the application as aforesaid of the new corporate in- come tax rates under Republic Act No . 5431 on in- come earned beginning from July 1 , 1968 to Decem- ber 31 , 1968.
Respondent, on January 3 , 1973 , withheld action on the claim for refund pending the final decision by this Court on. similar pending cases . Consequently , on March 2 , 1973 , petitioner filed its petition for review.
This case is not one of first impression. In several cases , it was held that a calendar year corporation is liable to the increased rates of income tax prescribed in Republic Act No . 5431 from January 1 , 1969 and not from July 1 , 1968. Thus, the income earned from July 1 , 1968 to December 31 , 1968 of such corporation is subject to the old income tax rates prescribed in Section 24 of the National Internal Revenue Code , before its amendment by Republic Act No o 5431. (Manila Times Publishing Co . v . Comm. of Inter nal Revenue , CoT. A. Case No . 2263 , Dec . 17, 1973 , certiorari denied in G.R. No . L-38154, May 10, 1974; Zamboanga
DECISION -
CT
CASE NO. 2494 3 ood Products , Inc . V o Comm. of Int . Rev . , C.T. A. Case No o 2053 , June 3, 1974; Colgate Palmolive Philippines , Inc . v. Comm. 9f Int . Rev., C. T. Ao Case No . 2293 , June }0, 1974; Philippine Aviation Corp . v . Comm. of Int ., Rev., C. T.A. Case No . 2195, August 5, 1974; First Insular Bank of ·Cebu v . Comm • • of Int . Rev., C. T.A. Case No o 2262 , August 29, 1974; Tabacalera· Inc . Co., Inc . v . Comm. of Int . Rev., C. T •• Case No . 2081, Nov. 20, 1974. ) Petitioner i s , therefore , entitled to the refunu of the sum it paid as deficiency income tax and penalties £or the period from July 1, 1968 to December 1, 1968. IN VIEW OF THE FOREGOING , respondent is hereby order ed to refund t o peti tioner the sum of ~5 , 784 o 83 within thirty days from the date this decision becomes final .
Without pronouncement as t o costs .
SO ORDERED .
Quezon City , September 22 , 1975. ~~
Presiding
Judge
L~~~
SLAO R. "'~LiAKB~~
Associate Judge
/
/L-- -J 4--_~
RM10N L. AV AJ.IJCENA