BANK OF AMERICA NT & SA vs. “ Cc. T. A. CASE NO. 3642 COMMISSIONER OF INTERNAL REVENUE, Resparnderit. ~ tee — on eee weer me —_— ne —— oo K p21 las dD FE G&S KF 8S rt BO MS This case is a claim fier Petunia by petitioner Bank af America NT & SA in the anount oof F789, 736.00 as alleged everpaid income TAX for the TAXable year 1981. Said amount is computed as follows: Net Offshore Income P 21,749,528 x 15/365 x 5% P 44,691.00 Gross Onshore Income P221,894,457 x 10% 22, 189, 446, 00 All Others PS, 098,474 x 1,774, 466.00 Total P24, 008, 603,00 Less: TAX assumed by onshore borrowers {22, 189, 446.00 Net FCDU TAX Liability for 1981 P 1,819, 157.00 Deduct Quarterly payments ist Otr. P 13, 713,00 end itr. 275, 507.00 3rd Qtr. 755, 397.00 Jotal Payments P1, 044,617.00 Creditable TAX withheld on Government Securities 1,504, 278.00 2,548, 895, 00 Refundable amount for 1981 P 729,738, 00 087

DECISION

- 2 - Petitioner is a foreiqn banking corporation duly licensed to enqage in regul ar commercial business · in the Philippines.

It

is likewi se duly aut h orized by the Central Bank of the Philippines to operate an expanded Foreign Currency

Presidential

Decree

No.

1035 and

Central

Bank

Circ1.1lar 5'+7.

Orr

May

31' petitioner through its extet~ nal audit(;.r SGV &· Co., filed a fc•rmal claim to the

Bureau

of

Internal

Revenue

and without waiting f o r respondent

Commissioner's

dec ision, petitioner filed on

May

31, 1983 the instant petiti on f•:::-t~ r·'ev i ew t'egard i ng its 1 '::381 c J. a i nm fot~ refr.1nd amc••.mt ing tc• P7;:::9, 7 ~~8. 00. <E><h.

VV, p.

105- 107, CTA record s ) To:• date, t'es po::•ndent yet pe~itioner's claim for refund of the said amount of P729 , 738.00.

Hence, this pet it iorr fot~ t' eview was instituted to interrupt the running of the two (2) year prescriptive period.

The sole issue presented in this case is whether or not petitioner has in fact overpaid its income tax for the ta><able year 1981 . 58 0

For the taxable year 1981, petitioner filed twe separate carporate incane tax returns, one for its requilar commercial banking oaperaticns and anather fer its Foreign Currency Deposit Unit (FCDU).

Fetitiener filed the follawing income tax returns for its regular commercial banking aperat icrrss A) Caorporate quarterly inccane tax return for the period ending March S31, 1981 (Exh. A, p. S4, CTA rec. d, b) Corporate quarterly inecane tax return for the peried ending June 3O, 1981 (Exh. D, p. S7, CTA rec.)

cc) Corporate quarterly income tax return for the perioed ending September 30, 1981 (Exh. G, op. 69, (CTA rec.)

cd) Avrual cansmlidated income tax return for the year 1981 (Exh. J, p. 63, CTA rec.). Under this return, petiticner declared a net lass and therefore had a zera income tax liability.

Likewise, petiticner filed the following income tax returns for its Foreign Currency Deposit Unit (FCDU) aperaticans a.) Far the first quarter ended March i, erony

1981, petitioner filed its Quarterly Irneome Tax Retin which showed aio otax due ain the amnaunmk of Pa, 7iS Cty. Ty pe 77g CIA ree. ). This amount was paid oon June dd, 1981. (Exhe. X and Y, pe Al, CTA rec. )

b. ) Parothe first and serand quarters ercded June 30, 1981, petitioner filed its cumulative Quarterly Ineane Tax Returns (Exh. Z, p. &8, CTA rec.) which showed ai tax due ain the amount of Pe 7, 7. OO, This amaunt was paid oon August Gl, 1961. Cexhs. DD and EE, p. 86, CTA rec. )

co.) For the first, seceand and third quarters erided September Bo, LOL, petitioner filed its cumulative Quarterly Ineane Tax Return which showed a tax due in the anount of F7SS, 397.00, This amourt was paic an December 1, 1981. (Exhs. JJ and HR, ft. DL, CTA pec.)

cd.) Fis the calendar ended December Gil, 1981, petitioner filed its firal adjustments income tax return oom Foreign Curreney Deposit Unit (FCDU), whieh ret iurrs shawect a tax liability of Fil, 819,157.90 (Exh. LL, pp. 38, CTA rec.). Against said tax liability, the aforesaid quarterly tax payments aggregating F1,044,617.900 (Ext. LL, pm. De, CTA ree.) plugs the sum of FI, 504,278.00 (Exhs. WW ter AIA pp. 108-115, CTA rec.) represart ing

- 5 - P729, 738. 00.

examiner who investigated petitioner's claim for refuy·,d rendr:wed the fo l. 1 r.:•w i r.g repc•rt: ( Exh. LLL, p. >?.8 , BIR rae.).

A rfict::•mp1.1tat ior' c•f ttH:

i.r,cr.:•me tax withheld

Oh

~cvernment & curities and taaed

Qh

the v rious

BIA

Forms

1743 Bubmittad, th total creditable amount st·1r.:o~Jlr.J t') _ Pl, '+50, 537. 5 <) inlStead c•f r1,504,27S.OO, or a d ff.rence of P5::1l~ -1'+(). so.

The total eUI1C•I.ll",t ref•_mdable is th refore P675,997.50.

However, re~pondent in his mamorandum contends that ttu~ arnour-rt of P75~, 397.00 o:\S alleged payment fot" the third qu~rter CExhs.

J J

and

I~K)

was not a ct•Ja l ly by the pet" certification of the Revenue Accounting Division of the nurea•J of lnt;r,H·r,Wil.

Reve?nue (p.

95 BIR t"ec.).

This c 1 aim •::.f responder·•t is •.mt er·.ab l. e. The said cert if 1. c¢~t ion merely that the f~ever·rue requested fO'r" verific::atio::on, C. R.

No.

dated Decer11bf.?.'r' 1, 1'381 fot" P755, 397. (H).

It did Yrr.:•t state that the BIR did not ~ctually receive the payment . Said certification could simpl y imply that the said 591

- 6 - division dows net have a reeerd of the said confirmation receipt. Payment canicd have heer actually reee@eived bub there ais fault im the recarding system of the BIR, ft i8 cornverndient For respondent toa claim that such’ amount was 9 riot received mer actually paid in order roto ota grant the refund saught by petiticaner. Ais a matter of fact, respondent did nat abject to the eviderice submitted by petiticanear and instead submitted this case based an the pleadings and recerds af this ease (CVA rem. pp. dee & LEZ), The Government must set oan exanple of fairness and honest cdealing. "To preave these excess income tax payment 5, petitioner presented in eavidenoa its ineeme tax ratios fur the year aivedved, the Corresponding mPPiowvakl yveceipts feas ts driecwe Lax payments, Na Genbeuvertdig evidence was presented by 1 espandern’ te disprave Lhe existence of the official receipts of tax payment’ particularly Reverme fax Receipt Ne. @UBEaI4G anc GE Confirmation Receipt New 980411 dated December ve (OO) shawing achat payment of the anmunt af 7S, 97.00, Hs a matter af fact, as stated above, respondert submitted this case far decision an the basis of the pleadings and the records afler pelitianer has presented and affered its eviderce, '"Sance ane who prays fea judgment or

O9¢

the pleadings without offering preof as ta the truth af his allegations, must be «understand ta have admitted the truth of all the material and relevant allegations taken toagether with such of his awn as are admitted" (Bauermann vs. Casas, 10 Phil. 3863 Evangelista vs. De la Rosa, et. al., 76 Phil. 115). Respondent may be considered as nat Questioning sericusly petitioner’s entitlement ta its claim for refund. More sac when the eviderices presented which were nat disputed by respondent, sufficiertly established petiticoner’s right ta the refund {Commonwealth Management and Service Corporation vs. Commissioner of Internal Revenue, CTA Case No. 3232, June 26, 1985).

The circunstances abtaining in the case at bar camnpels Uss te siustairi the terability of petiticner’s right ta the refund based oan the evidence and pleadings (Dataprep {(Phils.], Inc., vs. BIR , CTA Case NO. 3600, March 30, 1984).

Hawever, as per aur examination af the axhibits presented on taxes withheld em governmerit securities and the certification af the Central Rank (p. 90, BIR rec.), it was found out that the amaunt is anly F1,501,162.50, since a taxpayer can claim for a refund only sa much as it can prove, petitioner is entitled enly ta the BUNT of P726,632.50 aut of the tetal claim of F729, 738.00, 096

- 8 -

WHEREFORE, respondent Commissioner of Internal credit in the amount of P726,632.50 to pet i tioner

Bank

of

America

NT

& SA

re presenting overpai d in~ome ta x for t he taxable year 1981. Without pronouncement as to costs.

I CUNCUR:

CONS

R sc•c ]. ate

Judge

~~Q.~ ERNESTO D. ACOSTA Assc•c i ate J•.td ge C E R T I F I C A T I 0 N

I

hereby certify that this decision was reached after due consultation between the members Section 13, Article VIII of t he Constituti on. 594 ROAG!UIN Judr.~e

Rppeals