CTA Case No. 3609

DECISION

CTA CASE HO. 3609 ···- 4 ···- (Exh. f{).

As at that date, petitioner had already p a id .• a :::.· s t a ted abo ~~ e , P4,516,686.00 cash and P2 5 7 ,398.00 tax c redit, leaving a refundable amount of P2,056,471.00.

On April 15, 1982, petitioner filed its annual in c ome ta x return (Exh. EJ s hoNing· that it suffered a loss of P912,636 . 00 or zero income tax return for Since .it· h ad __ paid, as stated above.

P4 .• 516 .• f...Bt .• oo c a :.:;h and P:257,.3'.~8.r}O t·ax Na s ent.it·led Z a refundable credit .• it amount o"f P4,774,084.00 corre s ponding to year 1981. A.·::

of April .t 5 .• .1982 .• petitioner a lread y di ::::c o~' ered .. 1at it had erroneously paid the sum of P3,70f...,77.5.00 in i ·t·s .t·:~so .income ta .l\· return (see Exh.

13 ·-4).

It there1"ore refle c h:~d this amount in it s 198.1 In c ome Ta x Return (£xh. EJ to s hoN a total refundabl e amount of PS,4S0,859 . 00. On April 7 .• . t·:~83, petit.ioner filed it s c.laim dated Narc:h 25, 1:"~83 "for the reftwdltax credit of the tot-al o ·f P8,430,8.59.00 AJ repre s enting exce s s income ta x payments for the year s 1980 and 1981. But no soo n er than the c laim could be acted upon by t he respondent Commissioner of internal Revenue, petitioner elevated the same to this Court on Apri Li, £783, It may suffice to state that there appearz no basic disagreement az to the facts. The parties having agreed toa submit tne case fur decision based on the pleadings and record after petitioner has presented sts evidence.

The case at bar presents for our determination the sole issue of whether petitioner is entitled te the refund of an alleged erroneous and/or overpaid Income taxes for the years 1?80 and 1781, Petitzvoner porrnts out to the discrepancy of an “additional income tax for accelerated déprecitation on fully depreciated assets” which was traced to the “miret In adding back in F280 the amount of PA, TOG TFS .OO CExh, Bert} “at additional tax due, thus resulting In an overpayment of the income tax by the sarel amount. 7 CELE May pp. Goby CTA recards), The records of the case does Indicate respondent“: off tee Investigation lending currency to the claim, thus, The claim for [980 tax refund by the Atlas Consolidated Wining and Development Corporation stemmed from the erroneous addition ta the final ENCOme tax payable iN the amount oF PA, PORT T SS AN), In April, 4&281, tr, Ernesto A.

DECISIOH CTA CASE HO. 3609 -- 6 - A·, c heta~ the then Chief Accountant of the corporation rec ommended that the accelerated deprec iation Nas overstated in the amount of P7 ~266~9.38.17 computed as follm<~s :

Normal deprec iation for .Jrd quarter 1980 PTJ~ .J46~.J.J.J.07 Less : Normal depreciation on asset·::: depreciated on accelerated basis ( 112 of P48~ 1.58~ 789 .80) _.2..1:J_(fl..?.L:"J..'l1.~.J..Q Normal depreciation of fully deprec iated assets on accelerated b.'ii:.:;i s Income tax rate Ajdit ional Income Ta.).;· p 9~ 266.~9.38.17 ·---·--·--·--·-·-1!?Z._ :;::~"~":,t;.!::::¥.: .:Z.Z~:;; A:..:;

a result of this addition~ the final income tax payable for 1':~80 Nas increased fr om P8~.J.51,2.57._; t(., P12,0.581 0.J2. - and over payment of P-3~ 706, 77.5 . - (please see attached :x:erox copies of quarterly memo.s of Cebu Office to 11akat i Offic e of accelerate depreciation of fixed as:..:;ets). The t aking up of the accelerated depreciation or: fully deprec iated assets for the .Jrd quarter of 1980 i s erroneous because the deprec iat-ion on ·fully depreciated as.set.s of 1980 .in the amount o'f P.J.5,614,S:~O •. J7 already includes the .Jrd quarter deprec iation of P.~ 1 266,9 .J8.17. (7th Indor sement dated September .JO, Chief Revenue Enfor cement Offic e to J.lgr iculture ·~ Natural Resources Division) P~ petitioner) 1986, Chief (Exh .

On the petitioner ·s clai med overpayment of in c ome tax for 1 981 cons~ quenced by nan income tax 1 i abi 1 i ty of zero on said year as against actual in c ome tax payments totalling P4~774,084.00" the s ame may be s aid to have its affirmance in the 7 - report of finding s of respondent 's offi c e, "With re s pe c t to the claim for refund for the year 1981, thi s Offi c ha s pre~1 .iou s ly re c ommended tl?e refund of the t o t a l amount of P4, 7 74,084.0CJ a s c ontained in our 4th indor s ement dated November 11, 1985," and, " re c ommended that the aggregate amount of P8,480,859.00 repre s enting c laim s for refund of <H' e r p a i d i n c om e ta x e s c or r e s p on d i n g to the year s 1980 CP3, 7 06,775 .00) and 1981 CP4,480 1 084.00J be refunde d t o Atla s Con s olidated Hining & Development Corporation. "

(8th Indor s ement dated Oc tober 1, Chief , Agri c ulture & Na tura .I Resour ce:.=;

Divi s ion to Chiet· , Litigation Di~1 i s ion, Legal Offi ce ).

rExh. Q, petitioner). A:.=; thu s s hown, th e report it se lf furni s he s the be :.=; t me a n s of it :.=;

oNn e x po s ition .

The fa c tual - .:.

f inding :.=;

a r e not s hort of s pe c ifi c s upport in term s of tra c t a ble data and rele~ant re c ords openly laid and fully di s clo s ed, a s s u c h de s erve s the credence n o rmally accorded in the ab s ence of c ontrary evide n c e.

Upon the re c ords both the circum s tan c e s obtaining and rele~'ant legal s tandards c ompel the c on c lu s i o n that petitioner ha s proved entitlement to a f avorable determination.

- 8 - UHEREFORE, the refund/tax credit of the aforesaid a•ount of overpaid inco•e taxes for the years involved is hereby granted. No costs.

UE

C E R T I

F I

C A T I 0 H

I hereby certify that this decision reached after due consultation among . the member s of the Court of Tax Appeal s in accordance with Section 13~ Article VIII of the Constitution. AHAHT Presiding Judge Court of Tax Appeals