Republic of the Philippines Court Of'Tax Appeals G!Uezon City Trans-Philippines Investment Corporation vs. The Commissioner of Internal Revenue

DECISION -

C.T.A. CASE NO. 4678 - - 3 -

LEASE ON REAL PROPERTY

Withholding Agents

CY 1989

Rent Incoae per ITR Per Certificate of Creditable Incoae Tax Withheld at Source U743.ll 51 Tax Withheld-Per Certificate of Creditable Incoae Tax Withheld at Source (1743.1)

AG L P-AIISCO

Foundry Inc.

============== ------------- ------------- Artefacts Inc.

=========== ----------- ----------- RUC Textile Division =========== ========== Total ============= ------------ ------------ Subsequently, petitioner £iled on October 3, 1991, a written claim £or re£und or tax credit o£ P750,468.66 with respondent representing unutilize tax credits as o£ December 31, 1989.

On December 18, 1991, there being no action on the claim £or re£und or tax credit, petitioner £iled this petition £or review as a way.o£ tolling the two <2> year prescriptive period set by law. 746

- 4 - Respondent alleged as special and a££irmative de£enses the following: 1.

that the present petition is premature because the claim for refund o£ petitioner is still pending investigation and consideration before the -o££ice of respondent and that no decision has as yet been rendered on petitioner's claim £or re£und. 2.

petitioner likewise failed to show that it had strictly complied with the requirements of Section 204 of the Tax Code in relation to Section 230 thereof. 3.

the burden is imposed on petitioner to show compliance with these requirements since a claim for refund and or tax· credit partake o£ the nature o£ tax exemption which is construed strictly against the claimant. The sole issue to be resolved in this case is whether or not petitioner is entitled to the refund or tax credit o£ the amount of ~750,468.66 representing erroneously paid or unutilized creditable withholding taxes £or taxable year 1989. Petitioner in support o£ its claim presented in evidence the Corporate Annual Income Tax Return <Exh.

"B">, the Certi£icate of Creditable Income Tax Withheld at Source- BIR Form 1743.1 <Exh. "I"> and the claim for refund with the Bureau of Internal Revenue <Exh. "K">. Record shows that respondent failed to £ile his comment on petitioner's of£er o£ evidence within the time given the Court. Likewise, neither memorandum nor 747

- 5 - material evidence was ever £iled by herein respondent in support o£ his case.

It can very well be concluded that respondent is not questioning seriously petitioners right to the claim £or re£und.

Respondent £ailed to controvert his opponent's claim and lacks material evidence to support his contention.

A cursory examination o£ the records o£ the case, particularly petitioners income tax return reveals the £allowing computation: II COlE Withholding Agent Ex h.

lgt. Fee Rental Tax Withheld AGP Industrial Corporation E 229,609.80 11,480.49 Royal Undergaraent Corp. F 12,147,929.83 607,396.49 Royal Underga•ent-Textile G 33,833.69 1,691.68 AG & P-AKSCO Foundry Inc. H-1 200,000.00 10,000.00 AG & P-AISCO Foundry Inc. H-2 200,000.00 10,000.00 AG & P-AKSCO Foundry Inc. H-3 200,000.00 10,000.00 AG & P-AISCO Foundry Inc. H-4 200,oo0.00 10,000.00 AG & P-AKSCO Foundry Inc. H-5 200,000.00 10,000.00 AG & P-AKSCO Foundry Inc. H-6 200,000.00 10,000.00 AG & P-AKSCO Foundry Inc. H-7 200,000.00 10,000.00 AG & P-AKSCO Foundry Inc. H-8 200,000.00 10,000.00 AG & P-AKSCO Foundry Inc. H-9 200,000.00 10,000.00 AG & P-AKSCO Foundry Inc. H-10 Artecrafts, Inc.

I 48,000.00 2,400.00 Royal Undergaaent-Textile J 150,000.00 7,500.00

T 0 TAL

P 12,411,373.32 P 2,198,000.00 P730,468.66 =============== ============== =========== Clearly, petitioner was able to satis£y the three basic requirements in claims £or a re£und o£ overpaid creditable withholding tax to wit: 748

- 6 - 1.

£iling o£ a claim within the two-year period prescribed under Sec. 230 o£ the NIRC.

2.

the income upon which the taxes were withheld were included in the return o£ the recipient; and 3.

the £act o£ withholding is established by a copy o£ statement <BIR Form 1743.1> duly issued by the payor to the payee.

<Phil.

American Life Insurance Co. vs.

Comm. of Internal Revenue~ CTA Case No.

4018, Sept. 16, 1991> Likewise,_ petitioner was .able to show that the said re£undable amount was not credited to subsequent year because £or taxable year 1990 <Exh " L"> petitioner also incurred losses. Based on the requirements set £orth by law, undeniably petitioner was able to substantiate his claim by way o£ material evidence. At this point, there is nothing le£t £or the Court but to give a££ordable relie£ in petitioners £avor. <Citytrust Finance Corporation [Formerly Investors Finance Corporation] FNCB Finance vs. Comm. of Internal Revenue~ CTA Case No. 4046,aupra;

Commonwealth Pacific Consultants Ltd.

vs.

Comm.

of Internal Revenue, C.T.A. Case No. 2953, May 15, 1982;

Comm.

of Internal Revenue vs. The Philippine American Life Insurance Co. and The Court of Tax Appeals, CA G.R. SP. No. 2953, #arch 26, 1992; Filipinas Management & Leasing Services Corporation vs. Comm. of Internal Revenue, C.T.A. Case No. 4146, March 11, 1994) 749 .,

DECISION -

C.T.A., CASE NO. 4678 - - 7 -

WHEREFORE, in view o£ all the £oregoing respondent is'hereby ordered to re£und or issue tax credit in £avor o£ petitioner Trans-Philippines Investment Corporation the sumo£ P730,468.66 representing excess creditable withholding taxes paid for the calendar year 1989.

WE CONCUR:

<On Leave> ESTO D. ACOSTA res:di~ Ju}Pe ,....,...

~"< ~u. I' RAMON 0. DE ~A Associate Ju1Je CERTIFICATION I hereby certi£y that this decision was reached a£ter due consultation among the members o£ the Court of Tax Appeals in accordance with Section 13, Article VIIJI of the Constitution.

~ 750 EL Associa Judge Court of Tax Appeals