Court of Tax Appeals
0Paseo Realty and Development Corporation, et al.
Republic of the Philippines
COURT OF TAX AFPFEALS
Quezon City
PASEO REALTY and DEVELOPMENT
CORPORATION,
Fatitioner,
“~ VERSUS C.T.A. CASE NO. 4693
COMMISSIONER OF INTERNAL /
REVENUE, 429 pe,
Respondent.
Db & Cc Ft &e FF OO ™N
This case involves a claim for refund of
overpaicad creditable withholding tax for the
calendar year ending December 31, 1989 in the
amount of P54, 104.00 which tax accrued up to July,
1989.
Fetitioner, is a domestic corporation and a
subsidiary of the Bank of the Philippine Islands,
which ais engaged in the real estate business as
lessor of real properties. Its income consists af
an annual rental of F1,855,000.00 from Citibank,
which leases the land of petitioner (tsn,
June 19, 1992, pp.11-12).
Petitioner filed with the Bureau of Internal
Revenue its Income Tax Return for 1989 showing a
763
— DECT STON -
C.F... Case No. 4695
refiundable amount of Fi72,477. 00 representing
current FS4,140.00 and prior year's F146, 026.00
creditable taxes withheld, computed as follows:
Income (Schedule 4 ~
Rentals/Leases) . PF 1,855, 000. 00
Less : Deductions 1,775,991, 00
Net Incone Pp 79, 003, 00
Tax Due ; Pp 27,653. 00
Less
a.) Prior year's
excess credit
(19868) P 146,026.00
b.) Otrly. payaents
aade this year
c.) Creditable tax
withheld
{expanded withholding)
{Exhibit AJ 54, 104. 00 200, 130, 00
Total Asount Due/Refundable 172, 477.00
Thus, the return of petitioner for 1989
(Exh. A) shows a gqross income of Fi, 855,000.00,
total deductions of 1, 775,991.00, a net income of
79,009,000. EThis income tax due of P27,653.00 for
calendar year 1989 was charged against petitioner’s
tax credit of P81,403.00 for calendar year 1987, as
explained in C.T.A. Case No. 4439.] —~
Fetitioner applied the F146,026.00 prior ¥yéar
exiress credit against its 1989 and 1990 tax
liabilities leaving a refundable creditable tax of
FAs, $15.00, the claim for refund of which is now
pending with this Honorable Court.
-
or::c r s I uN ·--
c.T .A. Case No.4693
I n t h £~ s a rn £>
t ·' r.~ t m~ n
< E x h • I n , p e t i. t i o n e t '
s h o w e d
a creditable tax withheld at source o f
P54, 104.00,
wh ich
is
the amount claimed in
this
case.
Its
ten ant, Citi.bank , had withheld a
5~, or
P92,750.00
on rental of P1,855,000.00 CExh.B>, but
pet iti oner
claimed
only P54, 104.00 because , as
explained
by
witnes s Rey n aldo Acejo, that was the amount of
the
tax accr u ed up to July 1989 CP92, 750/12 = P7, 729. 16
and
thereafter
the
taxpayer s hifted to a cash basis .
petiti oner
filed
a
claim
for
r
f 1nd
d tt ed
Nov.
1 7 ""'
1991
with
t' espondent' s
Legislative
Ruli ng
and
Divi sion
asking
for
the
refund
of
P5 L~ , 10L~. 00
repr esenting alle ged excess creditable
withh ol ding
tax few
Janua t~ y to J"uly,
1'::38'3.
Without waitin g for
t~espondent' s
decision,
petit ion1:n~
filed
on
Decernbet~ 27 ,
1991 a pet itio n for t~eview.
Upon
these
facts,
responden t
raised
as
special
a nd affir mative defenses lack of c a use
of
action
as it does not allege
t he dates
when
the
taxe s
to
be
t'e f•.tnd ed
pai d.
Pe t itioner's
claim
for refund in
the
amount
of
s
til
under
in vesti gation
by
the
t'espn nd ent;.
Th
taxes c laimed are deemed to
have
785
J
;,
-
DECISION -
) been paid and collected in accordance with law, and existing pertinent rules and regulations. Claims for refund are construed strictl y against claimant fot' the same partake of the nature of exemption ft'Onl taxation.
Thet·efm·e, it is incumbent upon petitionf:?t' to show that it is entitled thereto, ott1et··wi se, it shall be fatal to its claim for t'ef•Jnd.
The petit i on contains no allegation that it is entit l ed to the refund or the deductions claimed.
co ntention that it has ava il able tax credit, for the current and prior year', is gt'atui;t ou s and does not ipso facto warr'ant t h e t' e f u n c.1 • ln a claim fot' t'efund, it is inc umbent upon p eti tioner to show that it has complied with pt·ov is ion of Section
C:~3 0
in t'elation to Section 204 of the Tax Code. The sole issue raised in this petition is wheth er or not petitioner is enti tl e d to the refund of P54, 104.00, as excess creditable withholding tax p a i d f o t' J C\ T'll.l cH ' y t o J 1.11 y , 1 '3 8 '3.
Petitioner· presented as evidenc e the following t'e 1 event and documents to fOl"' the period , Januar'y to .Tt..ly , to wit: ..
·- DEClSIDN --
L":"
- ...J - Exhs.
Particulars A 1383 lncoae Tax Return <BIR Fora 1702> together with its attachaents: B c 1.
Audited financial stateaents; 2.
Schedule of taxes and licenses; 3.
Photocopy of first page of 1988 annual incote tax return. Certificate of Creditable lncoae TaK Withheld at source for 1989 <BIR Fora 1743. ll issued by Citibank, N.A. showing the aaount of incoae paid of P1, 855,000.00 and the aaount of tax withheld of P92,750.00. Letter claia for refund dated Noveaber 13, 1991 filed with respondent on Noveaber 14, 1991. Hespondent r cis> d no o bje c tion to t h e admi ssion of the Exh ibits pre se n t ed by petiti oner.
When it was t i me for respondent to pre sent his evid ence , his counsel waived th e presentation o f evidence due to the absence of t he BIR r ecords.
Instead s he s ubmitted the case f or decision based on t he records a nd pl eadi n gs ava il a ble . The arguments raised b y respondent are not new.
In fact, respondent h as repeat e dly raised th ese sa me aryumenb• in all gi milar cases involving th e sa rn e pet it· n er•. Al l that is required of pet i tioner in claiminu for of excess cr editab l e withholding taxes are : 1 l.
Sec.
101 Rev. Reg. 6-85; see Citytrust Finance Corporation vs. The Coaaissioner of Internal Revenue, CTA Cas@ No. 4134, Nov. 11, 1991; and Citytrust Finance Corporation <For1erly Investor's Finance Corporat ion/FNCS Finance) v.
Co11issioner of Internal Revenue, CTA Case No, 404G1 February 24, 1993. "
~ DECISION ~—
" C1) that it filed a claim for refund within the two (2) year period as prescribed under Section 299 (now £30) of the National Internal Revenue Code;
C2) that the income npon which the taxes were withheld were Tres lured ec in the return of the reedodents ane
(3) the facet of withholding is established by a eopy of statement (BIR Form 1743.1) duly issued by the payor (withholding agent) to the payee, showing the amount paid and the amount of tax withheld therefrom.
Neither is it required of petitioner to show the date of payment of the tax withheld at source, The rule is a corporate taxpayer pays on a quarterly basis. The final payment is the last quarter payment at the end of the taxable year or on the 15th day of the fourth month following the close of the calendar or fiscal period. This is the time when it can be finally ascertained that the taxpayer either made profit or suffered a loss in its operations. = The best proof of withholding . Sun Insurance Office Ltd., v. Acting Commissioner of Internal Revenue, CTA Case No. 3205, June 23, 1989; Ateneo De Manila University v. Commissioner of Internal Revenue, CTA Case No. 3213, July 26, 1989; Asia Australia Express Ltd.,
v. Commissioner of Internal Revenue, CTA Case No. 3976, October 18, 1989.
766 --
DECISION -
C.T.n. Case No.4693 ·-- 7 - is t he ~n-·esentat ion of Statements of Ct~editable 1-Jithholdin~~ Tax.
Their presentation will be sufficient to show that indeed the withholding agent withheld and remitted to the Bureau of I n t £:' t' 1 1 a l He v en u e t h e am o u n t
l. n d i cat e d t here i n • It is significant to note that petitioner's tenant, Citibank, had withheld a 5% , or P92,750.00 on of P1,855,000.00 <E><h.B>, petit ioner claimed only P54, 104.00 because, as expl <:~ined by witne ss Reynaldo Acejo, that was the amount of the tax accrued up to July 1989 CP92 ,750/ 12 = P7,729. 16 x 7 months - P54, 104. 16) and ther eafter the taxpayer s hifted to a cash basi s :
Q.
This Exhibit "B", which is th e certificate of creditable inco me tax withh eld at so urce for t II P y £~ at' t '3 8 9 i s s u e d b y a v1it:llholding agent c,:.:\lled Citibank, N. fl . ;
s h ow s t hat t h e t~ e i s t' en t a 1 income paid of P1,855,000.00 for Paseo Realty and a creditable tax withheld of P92 ,750.00.
My question to you is, how come that the creditable tax withheld at s ource s hown in the income tax return for 1989 is only P54,104.00 while the certificate of withholding is s ued by Citibank says that they withheld P92 ,750.00? -' ·' ···- Dt:~: c I ~3 I UN ·-- C.T.A. Case No.~G9 3 -
B ·-
n.
When we t'e vi e wed the General L e dger of Paseo Realty and D~velopment Corporation, we noticed that in 1383 there was a change in t h e a c co u n t i n g p t' o c e d u t' e i n b o o ~< i n g of th e creditable tax.
We no ted that from January to July of 1989 there was a n accr ual a month ly accr ua l of the withhold i ng tax.
But s tarting Augu s t to Dece mber of the same year, they c hanged to cash b.:,sis.
That's vJhy whc.'\t appeared in the books in 1989 was only P54, 104.00 and t he t ota l am ount of creditable t ax of P92,750.00 was no t taken up in the books <tsn, :run~~ l 9, 1 ':1~J•:::, p p. 11 --1 ;;:~ > • It ] ...
.::> note worthy to po i nt at this that the declarations made by the taxpayer in his income tax return are for all int ent s and made in good faith and are true and correct for th e be s t of his knowledg e and belief. In fact the Treasure r and the Direct or , both representatives of the corporation s igned under oath t he inco me tax of the co ·r-'por'at ion.
Notice to f i 1 e t' It"' x pay e t' is presented ju s t above the provided for their signatures, t o wit: " We d e c l. at' e d t.m d e t' t h e penalties of perjury t hat this return h as been made in good faith, verified by us and to the be s t of our knowledge and belief is true, a nd correct pursuant to the provisions of the Nation a l Int e rn al Revenue Code, as amended , and th e regulati on s issued under aut hor i ty thet' eof."
7 '"'/ J
the space ) _,
- DECISION —
C.T.A. Case No. 46393 Internal Revenue Code are clear on this Thus, Section 45 Ca) and £66 of the the law provides:
"Sec. 45. Corporation returns.
(a) Requirements. a Every corporation subject to the tax herein imposed, except foreign corporation not engaged in trade or business in the Philippines shall render, in duplicate, a true and accurate quarterly income tax return and final or adjustment return in accordance with the provisions of Chapter IX of this Title. The return shall be filed by the president or vice-president or other principal office, and shall be sworn to by such officer and by the treasurer or assistant treasurer, "Sec. 266. Declaration under penalties or perjury. Fond Any declaration, return and other statements required under this Code, shall, in lieu of an oath, contain a written statement that they are made under the penalties of perjury. Any person who willfully files a declaration, return or statement containing information which is not true and correct as ta every material matter shall, upon conviction, be subject to the penalties prescribed for perjury under the Revised Penal Code.
774 National matter.
-~ DECISION —-
10 -
WHEREFORE, respondent is hereby ordered to refund in favor of petitioner the amount of P44, 104, 00,7 representing excess ereditable withholding taxes paid for January to July, 1989.
No pronouncement as to cost.
SO ORDERED.
Guozon City, Metro Manila, July 29, 1993.
L. K. GRUBA iate Judge
WE CONCUR:
OQ. Grose ERMESTO D. ACOSTA Yeesiding Judge Deh.
/ RAMON O. DE VEYRA / Associate Judge T hereby certify that this decision was reached after dite consultation among the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution.
Cuz o ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals W048