Bonifacioc Go Kim, et al.

DECISION

This is en sppeal from the decision of the Col- Lecter of Internal Avvenue dated October 12, 1954, (pe 134, BIR Records) essessing the petitioner (2) @eficiency sales tax and surcharge in the sum of #2,523.06, (») peddier’s privilege tex (C-14) fros 1946 to 1950 in the amount of £50.00 and (c) the sun ef #300.00 penalty in extrejudicial settlement of his case. The parties on March 6, 1956, stipulseted to eubait this case for decision on the basis of the re- cerds of the Jureau of Internal Revenue (hereinafter Gited as “BIR Rec.) consisting of 156 pages a6 trans- mitted to this Court on January 5, 1955.

The waterial facts established by the record of this case acy be oriefly steted as icllows:

The petitioner, Sonifecio Go Kim, is the owner of the “Bonifacio Sakery" located at the 6th Avenue, Grace Park, Caloocan, izal, Jased upon prior in- vestigation conducted oy « revenue agent (51 ec. PP. 1-2) respondent assessed the petitioner as defi-+

DECISION =

Gof.A. CASE NO, 44 Glency sales tex for the first querter of 1946 and surcherge ia relation thereto the sum of $576.39, besides the smount of ©1600. In extrajudicial settle- ment of the violation of lew by herein petitioner (See BIR Rec. p. 3); on Cetober 25, 1949, petitioner paid the respondent the sum of £596.29 for said sales tax, surcharge, tnd coapromise, the petitiomr however re- @enrving the right to contest the aforesaid assessment (eee GIR Rec. p. 27), No claim for the refund of this amount wes ever sede by petitioner. Based upon 2 report of reinveetigetion submitted by Revenue Agents Metucan and Neyes (SIR Rec, p. 37), sespondent on December 1h, 1950 assessed the petitioner the total sum of *6,365.09 as deficiency sales tex and peddlerts fixed tax for the period from the first quar- ter ef 1946 to the lest quarter of 1949 inclusive in addition to surcharges, This assessment wes disputed by the petitioner in » letter dated Jenuary 25, 1951 (BIR Rec. p. 44) requesting at the same tine reinves- tigation of his case. Another investigation wes made by Revenue Agent Matucan ond a report of the same was Submitted on March 3, 195? (BIR Rec. pp. 86-81). In @ etter dated July 11, 1952, (SIR Rec. pp, 35-56) respondent reassessed the petitioner the totel sum of #7,795.08 es deficiency sales tex and fixed tax for the aboveestated period in addition to @ penalty of 300.00, Petitioner in @ letter dated July 31, 1952 | (BIR Rec, pp. 56-59) contested the assessment but st | the same time offered a coupremise settlement of the | 514 |

BEGISION -

Cekete CASE NO. 44

a Qa

ease by paying the sum of $5239.94 for ell the texes and penalty denanced.

The cose was referred to and heard sy the Gen- fepence Steff of the ureay of Interns] Aevenue which submitted @ report dated August 31, 1955 (SUA Rec. pp. 09-94). In view of the findings and recommendation ef the Gonference Staff, the respondent icsued @ ré- wieed assecenent dated toveaber 16, 1953 (BIA Aec. pee 96-97) holding ihe petitioner liable for the sua of #2,563.05 ac deficiency sales tex end peddler's anu tegether with surcharges instead of plus /300,.W @6 Compronise penalty. [his asseocment was again the subject ef 6 petitinn for secoasideraticn dated Jan- wery 2, 1954 (BTR Rec. pp. 100-202), petitioner al- Aeging that he was not given an opportunity to cross- | enamine Agent iiatucan whe prepared the report upon which the aesessaent was wede, fhis letter of reconsideration was denied by the respondent in s letter dated ‘pri 1, 4954 (BIR Rec. p. 199), with ® correspending correction of the previous tsceeusment so that petitioner's tex Afability should be for the sus of 2,573.06 as defi« edenty seles tex anc peddler’s fixed tax together with eurcha res plus * compronise penalty of 7200.00, this being the lest unrevised essessnent, the same should be Considered es respondent's decision. A request for reconsideration of this decision wee denied by the res- pendent on May 3, 1954 (BTR Rec. pp. 110-111), On May @, 1954, respondent issued a warrant o/ distreint and

DECISION «

GokwA. CASE NO. 44 «ha levy te enforce the collection of the tax in questicn, but emecution thereof was held in abeyance on June 24, 1984, after petitioner filed « bond provided by the Reliance Surety 4 Insurance Ce., Inc. (SIN Kec. pp. 123-114) to guarantee the payment of the deficiensy eeles and fixed taxes demanded, or whatever amount thet aay be determined upon the reinvestigation thereof — and after allowing petitioner to crese-exeuine the agent concerned.

After rehearing ef the case, respondent in a letter dated October 12, 1954, (SIN Rec. p. 154) and weseived by ¢he petitioner on October 20 of the same yeer, denied the second request for recensideration. Ga November 19, 1954, the herein petition for review was filed before this Court. :

Tae issues involved in this case may ve sua- marized as follows:

(a) Whether or not petitioner is Ilieble for the peyment ef the sum ef *2,523.06 as deficiency sales tax and surcharse on the undeclared saies of the pee titioner fer 1947-1948; and

(m) Whether or not petitioner is liable for the peddler*s fixed tax from 1946 to 1950, in the sun of # 90.00, and

(e) Whether or not petitioner is lieble for the peyment ef 6300.00 penalty for extrajudicial settlement of the case.

The first issue refers te the sum ef 2,523.06 — 216

DECISION «

GeTeAe CASE NO. 44a 7 on as deficiency sales tax and surcharge on the unde- Glered sales for 1947 and 1948, ihe wain poliat of ‘ @ententien in this issue, concerns the use of the wait peice of P15.61 per bag of flour, a5 the basis ef the recomputstion of the gross seles for 1947-1948 by the gespondent. + etitioner contends thet such procedure >> formals adopted by the respondent Its eubiteary and unfetr and the conclusion drewa from thet process is erroneous.

From the report subaitted by Revenue Agent Matucan, it appears. that during the years 1946 to 1949 inclusive, the petitioner hed the following sales and flour used. .

fe O la.

wien. aiennal 23,913.) 7,452 £16.61 33,226 12.70 20,183 15,51 a * 11,523 17.62 Beem the foregoing deta obtained frou the records of petitioner, the respondent used the average preductian Gales er output per Sag of flour wd computed the sales of petitioner each year. ©n the ewount derived there- deem, the deficiency sales taxes were ascertained. ihe @eeesement now in question, heving been issued within the five year period prescribed by Section 321 of tiw Van Code, is prime facte correct aad the burden of ‘peceef to show otherwise fs upon the petitienes who Gentests the correctness of the sald assesament, (ine texprovincial Autoaus So,, Inc. v. Sollecter of later- a 517

DECTS TON +

GeT.A. GASE MO, 44 ~ w me}. Revenue, G.R. Mo. 1-S741, Jan. 31,1956, 52 0, G, Be. 2, p. 791). Upon the failure of petitioner to . overthrow this prises facile presumtion of the cor- rectness of the assesswent, the same must stand, While it way be true thet the herein petitioner Contested the assessuont and attempted to destroy its Cerrectaess by polating out possivle sources of errors, nevertheless petitioner did not present concrete or | positive evidence ef such errors or any evidence re- Astive thereto a6 will convince this Court that such errors did reasonably exist, At wost, petitioner merely cross-extnined 41) Agent A, Aetucen with a view probably to wesken the effect of his findings. Mewever, we ere of the opinion thet petitioner hes failed €@@ overthrow the presumption of correctness. In fact, petitioner submitted this case for decision without pre- @enting any efiixmetive evidence to prove his ellegetions @nd show by convincing proof thet the respondent's find- fags were erroneous. ic ore therefore censtreined te held as we du hold thet the petitioner is lfeble for the peynent of the sun of F2,523.06 es deficiency sales tax fdasluding surcharge in relation thereto, The second issue refers te the peddler's fixed tax for five yeers (1946 to 1950 Inclusive) in the totel @um of €50.00 assessed under sections 176 end 182 in re- lation to section 106, all of the Netfional Internal Revenue Goede. Petitioner contends thet he is ao longer liable because he bas already paid the corresponding fixed tex (Ce14) #8 evidenced by the certificete of the tuotelpal ~

G48

GeeA. CASE NO. 44 |

~V~

Treasurer of Caloocan, Ainel Exhibit “O"; SIR Rec. pe TT). The cortificete howewer shows that the fixed ten mentioned therein have been paid on petitioner's business establishment et the Gth Avenue, Gmce Park Galoocan, Aizel, for the yeers 1946 te 1950, inclusive, but does not cover the peddier's fixed se tenis 178 of the Tax Code provides for the payszent of taxes fey every seperate or distinct estaolisheent or place ef business, and that one line of business or cccupa- tien “does not Secome exeupt vy beiny conducted” with seme other occupation or business for which a tax has been peid. Since the business of petitioner as 6 wer- Cheat with peraanent establisnment is different froa his business 4s 4 peddler which obviously towvolves R® permanent but rather 4 traveling establishment, we eee therefore, of the opinion and se hold that the petitioner is therefore liable to pay the sua of §50,00 @@ peddler*s fixed tax from 1946 to 19%) inclusive. (Zkegan & Alejandrino vs. Coliector of Internal Re- venus, C.T.A. Gase Wo, 43, July 18, 1956). | The lest issue refers to the penalty In the sua @£f £300,000 to be paid in extrajudicial settlement of the violations of law allegedly asde oy petitioner. in the case of Soledad A. Srifas vs. Collector of Internal Revenue (C.T.A. Case No. 16, promlgeted Sept. 146, 1985) we held thet the pensity in extrajudicial settlesent of vielations of law do not constitute part of the essess- ment appeelablie to this Court. in that case we stated:

519 DEC Toivn. = GeT.A. CASE NO. 44 -6§~« "In addition to the ey —- tege tax and surcharge, the sum of 120,00 &6 sought to be collected from petitioner by | way 's * in extrajudicial settle- of ‘sompronmise ment of her penal Ifability under section ef the Nationel the hae Aeverue Code.

aeeume the category of 2 mig? ge wd until is rary accepted by the other perty, @ad no obligation ies Bhs or is crested by 2 @ off cosing from one ¢ parties Saleliee ane eeceptaace by a s We fiad ao reason to depart from the ebove view which must be applies in this case, FOR ALL THE FPORBGOLG, except os regards the cas- premise penoity of *300.00, which is beyond the juris- dfetion of this Court, the decision of the Collector of Intezaal Revenue cated Aprii 1, 19% is hereby affirmed end the petitioner {s hereby ordered to psy the respon- @umt the sum of °2,523.06 as deficiency sales tex in« Gluding surcheryge for 1947 and 1948, and the ancunt of 980.00 Se peddler's fixed tax from 1946 te 1950 inclu- Shwe ar an aggreyate of 2,573.06, with costs ageinst petitions:.

$9 URED.

Manila, Phillippines, July 31, i956,

Presiding Jucye

wes

Spee’

520

DECISION «

GeteA. CASE WO. 44 Rae b se WALT

Associate Jyage

521°