Enrique A. Barrera, et al. vs. C.T.A. Case Na. 4525 Commissioner of Internal Revenue, et al.

ee

Republic of the Philippines

COURT OF TAX APPEALS

Quezon City

ENRIQUE A. BARRERA,

Fetitioner,

Versus C.T.A. Case Na. 4525

COMMISSIONER OF INTERNAL

REVENUE .

, Responcent. aly lag

DE rere emt cee ne ca te te ent ttt ea i a aim mm et Y

dD &£ ce rs t+ OF WN

o

This Gase involves an assessment of alleged

defieieney capital gains tax in the amount of

Piz, 387,940.36 on ai real property sold by the

Petitioner.

Patitioner is a Filipino, of legal age, and

is allegedly engayed in the trade or business of a

real estate dealer.

Cn August 30, 1983, Petitioner, sold to

Erlinda lHaoson eb ale, a Commercial | property

located at Sto. Cristo, Binondo, Manila. The

said property was rented by tenants and allegedly

used by Petitioner in his trade or business as a

real estate dealer. This was confirmed by the

issuance of a Certificate Authorizing Registration

No. Gi17iS issued by the Respondent’s Revenue

District Officer Mamerto SGilangeruz, Jr. which

skates thus:

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D E C I S I

0 N -

C.T.A. Case No. 4525

" This

is

to

cer~tify

that

based

on

documents

submitted

in

this

office, fYk.

Enr~ique

Anneles

Barrera

with

taxpayer

account

number

B-6654-82728-A-7

and

a

resident

of

446

Mendoza

St.,

P t.\ic.'\po, Manila was not

l'~eq uir~ed

to

pay

the capital gains tax

on

the

transfer

of

the

real

property

de s cribed

below

for

the

reason

that:

or~d i nat~y

business

><XX

assets

XX><

used

in

xxx"

<See Annex B, Petition for Review>

Petitioner further presented doc umentary

evidences

that

a

real estate dealer and has paid h is

ta x es as such

<Exh.H-2>; his 1983 Inco me Tax Return

<E><h. H--1 >

declaring his income of

P583,912.20

as

fr~ om

of

subject

real

property !Exh.H- 1-A, Schedule 5> ; t h at h e

reported

the sale under Schedu le 7 of the Inco me Tax

Ret ur~n

;,~n

( Exh. H- 7-·B ) ;

that

subject

property was used in his trade a nd busi ness showing

cont r~act s

of Lease on the sa me at the time of

the

s a 1 e • < ::; P e F >< h s • 1\1 t o V r3 n d t h e i l'' s u b- m a r k i n g s )

-

D E C I S I 0 N -

C.T.A. Case No. 4525

Un

Octt1ber 31, 1985, Petitioner availed

the

Tax f-) mnesty

under~ the pt~ovisions ot· Execl~tive o r~der

Nos.

L~l dated August ·:.:J·J

~1.: •• ,

1985 <See Exh.C)

covering

the subject property and paid the corresponding tax

due

which is 10% of increase in Net Worth

in

the

amount

of P2 7,000.0u as evidenced by

confirmation

Receipt No. 810054225.

<See p.B BIR Records)

In

an

undat l?d

letter

according

to

the

Respond£•nt,

an

asses~;ment

was

issued

Augu s t 22 ,

1985 agai nst the Peti tioner for the year

1":~83 allegedly as "deficiency

cc.~ pit.!\1 gains tax

in

of P2 1 3B7,940.35

as

computed

below,

subject to adjustment of interest up to the actual

Net Capital Gains Per Investigation

Add:

Di sal lowances

Acquisition Cost

ltprovennts

Se 11 ing Expense

Net Capital Gains After Review

Tax Due Thereon

p 1,628, 000.00

693,485.00

247,900.00

Add:

Interest fro1 9-29-83 to 7-17-86

TOT~ AIO.NT lllE

<See Exh.D>

p

153,500.00

p 2,5£.9,385.00

p 2,722,885.00

p 1,530, 731.00

857,209.36

p 2,387,940.36•

In

a

letter dated Septe mber 25,

1987,

and

recieved

by Respondent on October 7 1

1987 or

more

662

·'

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D E C I S I 0 N -

C.T.A. Case No. 4525

than a year after receipt of the assess ment letter,

P e t i t i o n e t'

fat~

the

first

time

protested

t he

assessment claiming that he availed the tax amnesty

u n d e t~

t h e p t~ o v i s i on s o f E. 0. '+ 1 •

( S e e Ex h s • 5

and

5-A

p. 9 BIR Records)

Exchange of

correspondence

betwee n

the

Petitioner

and the Respondent ens ued

with

the

former maintaining that

the

assessment

issued

by the latter

was vo id since "the property

involved in this case is an ordinary

asset xxx

In

view

of th i s ,

~g_ s_ontend that yam ... assessmen t

for

c~.P_~.:t~l

q§l. in s

t@li deficiency li void

bec ause

!l.Q.

Fina lly,

on

December

1 '3'30,

Petitioner

received a final ruling from the Respondent

saying

thus:

"xx><

please be infor ... med

that

in

view of your failure to s ubmit

the

desired

documents

to

prove

the

acquisition cost ,

exp~~nses of

sale

and cost of improvements which were

c l ai med as deductions in

computing

the

gains reali z ed in the sale

o f

the

lot and building

reported

in

your client's income tax return for

1983, ·

as requested in

our

letter

cir.,t£>d J'uly 2 ,

19'::)0,

yom~ protes t is

con~;l.t:i!H'e d un~;ub~;tantit..'\ted and

is,

t h e t~ e f ta~ e ,

h e t~ e by

d e n i e d • "

( S e e

E>< h. n >

HE~ nee, this appeal.

663

'

,I

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D E C I S I 0 N -

C.T.A. Case No. 4525

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5 -

Petitioner

raised the issue on

"whether

or

not

the

s ubject

real property

involved

in

the

transaction/sale

of

1983 is

subject

to

capital

gain s

tax "

in

the

amount

of

P2, 387,940.36.

H!?SpClnth~ nt

,

al!.Hl raised the issu e on "whether

this

Honorable

Court

h s jurisdiction to

act

on

the

petition."

We

hold that this Court has no

jurisdiction

to

act

on thi s petition,

the

assessment

having

become final and unappealable.

It should be noted that on July 22 ,

1986 <See

Exh.

4) which wa s admitted by the Petitioner

when

he

said

that

" sometime

in

1985

and

more

specifically ,

accordi ng

to

Respondent,

before

August

. ·~ ..... ,

.::.c. '

1986,

F~espondent, all

of

a

sudden,

iSS I.Ieti

the

disputed/void assessment

of

capital

gain s tax upon P eti tioner on the abo v e subject sale

xx x"

<See

pe:n~. II ,

'etition

fot"

Review).

Such

assessment was, f or the first ti me, only

pt"otested

on

Octot.H.n~ 7, 19B7 in a lettet" dated September

25,

1987 <See Exh. 5 and Exh.5-A).

It was already more

than

a year since the date of the issuance of

the

assessment when the Petitioner protested the same.

664

-DECISION -

C.T.A. Case No. 4525

Clearly,

and

the

This

matter for lack of jurisdiction (Commissioner

1986 Tax Code, thus:

SEC. 270. Protesting of

assessment ~ When the Commissioner

of Internal Revenue or his duly

authorized representative finds

that proper taxes should be

assessed, he shall first notify the

taxpayer of his findings. Within a

period to be prescribed by -

implementing regulations, the

taxpayer shall be required to

respond to said notice. If the

taxpayer fails to respond, the

Commissioner shall issue an

assessment based on his findings.

Such assessment may be

protested administratively by

filing a request for

reconsideration or reinvestigation

in such form and manner as may be

prescribed by. implementing

regulations within thirty (30) days

from receipt of the assessments

otherwise, the assessment shall

Pach eet neces

become final and unappealable. xxx

Court can, therefore no longer act

Internal Revenue vs. Western Pacific Carp;

105;

Republic vs.

16 SCRA 584).

said assessment had already become

on

Lim Tian Teng Sons and Co.,

final

unappealable as provided under Section 270 of

the

of

14 SCRA

Inc. 3

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D E C I S I 0 N -

C.T.A. Case No. 4525

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7 -

WHEREFORE, the Petiti on for Revi e w i s

hereby

DISMISSED for l ack of jurisdiction.

SO ORDERED.

Quezon City, Metro Manila, July 8, 1993.

WE CONCUR:

D. ~STA

esi di ng Judge

~ ().J_~

RAMON 0. DE VE

A

Associate Jud e

• GRUBA

Associate Judge

CERTIFICATION

I

hereby

certify that

this