R -:.PUBLIC OF ·, et al. vs. COMMISSIONER OF '·INTERNAL REVENUE, Res pondent. X - - - - - - - - - - - - - - - - DECISI ON This is a claim for refund or in alternative, issuance of a TAX credi t certifica t e:.for the amount of P410, 025. 02 representing unutilized/ unapplied creditable withholding TAX payme nts for TAXa ble yea r ending December 31, 1989. Pet itioner i s a duly registered domesti c corporation engaged in real state business particularly in the leasing of its buildings and pieces of real estate specifically to Citytrust Bank.ng Cor poration. In c alendar year 1989, Citytrust Banking Corporation paid rentals of real property to petitioner in the tot a l amount of P8, 200, 520.58 from whic h it withheld the equivalent of 5% or P410,025.02 pursuant to Revenue Regulati o ns No. 5 - 85 or the Expande d Withholding TAX Regulations. 88&

DECISI ON

This is a claim for refund or in alternative, issuance of a tax credi t certifica t e :.for the amount of P410, 025. 02 representing unutilized/ unapplied creditable withholding tax payme nts for t axa ble yea r ending December 31 , 1989.

Pet itioner i s a duly registered domesti c corporation engaged in real state business particularly in the leasing of its buildings and pieces of real estate specifically to Citytrust Bank].ng Cor poration. In c alendar year 1989, Citytrust Banking Corporation paid rentals of real property to petitioner in the tot a l amount of P8, 200 , 520.58 from whic h it withheld the equivalent of 5% or P410,025.02 pursuant to Revenue Regulati o ns No.

5 - 85 or the Expande d Withholding Tax Regulations .

88&

- 2 - A net loss of P44,346.00 wa s incurred by petitioner in the year 1989 as reflec ted in the Annual Income Heturn filed with the Bureau ot Inl e 1·n a l Nevenue .

This resulted in a refundable amount of P410, 0 26.02 repres enting the unutilized/unapplied 5 % creditable withh o lding tax on fees paid by City trust Banki.ng Corpo:o·ation.

Petitioner opted to apply as ta x c redit to the succeeding taxable year < 1'3'.30) t.he afol· eute ntioned re:fundable amount as indicated by the "X" mark ·on t.he box per-taining to s uch choice.

The ta>:

credit intended to be applied ·t. 0 the following year however, was not allegedly credited by herein petitioner against any other internal revenue tax liability for 1990 or any period or year for that matter. Petitioner c laimed to hav e a gain in c urred a loss in ta>:able year ending De cember 3 1, 19'3CJ.

On December 6 , 19'.31, pe ·ti.tione r :f iJed a c laim :for refund with the Bure au of Internal Revenue :for the unutilized/unapplied creditable withholding tax as at December 3 1, 1989 in the amount of P410,0 2b.02 . Respondent has nei th•? r g 1· an t e d nor acted upon said claim for refund.

The instant petition for revi e w was filed with this Court on t1arch 1 9 , 1'3'32 as the two ( 2 ) years from the date 88 8

DECISION -

G. T.A Case No. 4727 - 3 - of payment of the ta:.-:

is about to expire as provided u nder Section 230 of the tax Code . The iss u e to be resolved in the case at bar is whether petitioner is entitled to th e refund c laimed. In support. of, its case , petitioner presented the following e>:hibits, to wit: Exhibits "A",

"A - 1"

EJd1ibits "B" Written claim for refund of creditable withholding tax for CY 1989 in the amount of P410, 0 2 5. 0 2 stamped recei. ved by the SIR - App e llate Division on 1 2 - 06 -91.

Lease Citytrust petitioner.

ag1·eemen t Banking between Corp.

and Exhibits "C" Certificate o k Creditable Income "C - 1 to C-3" Tax Withheld at Source <BIR Form 1743. 1) s h o\d.ng ·that for CY 1989 Citytrust Banking Corp paid petitioner rental fees of P 7 , 'J 4 6 , 2 4 3 . '::18 fro 111 w hi c h 5% or P 38~ , 3 1 2 .1 9 was withheld. Exhibits "D " Certificate of Creditable Income "D-1 to D-3 " Ta:>: Withheld at Source < BIR Form 1743.1> showing that for CY 1989 Citytrust Banking Cor p .

paid petitioner rental fees of P4 5 4, 276 . 60 from which 5% or P22 ,713.83 was wit hheld. EJ<hibit "E" Petitioner's 198'3 Income Tax Return together with suppor-ting schedules s howing a net loss of P44, 3 46.00, refundable income tax of P410,026.02 and declaration received from Corp.

in P8,206,414.00.

880 of rental income Citytrust Banking the amount of

- 4 - The Court admitted all exhibits formally offered as evidence by petitioner inasmuch as res pondent failed ·to file hi s comment thereto within th e time giv e n to him.

Respondent waived prese ntation of evidence and did not file any memorandum.

' The case was submitted for decision with the filing of pe titioner's memorandum. The issue before Us is not of first impression. A number of cases raising the same question have already been decided by this Cour t. The basic r·e qu irements se t forth in claiming for refund of e:<cess credi ·table withholding tax are the following: < 1 > that it within the two<2> under Section 230 Revenue Code;

<2 > that were withheld the recipient;

the were and filed year of a c laim for ref und period as prescribed the National Internal income upon included in which the the ta::.ces return of < 3) that the fact of withholding is established by a copy of statement

< BIR

Form 1743. 1) duly issued by the payer <withholding agent> ·to the payee, showing the amount paid and the amount of tax withheld therefrom. L 10, Rev.

Regs.

No .

13 - 78 ;

Citytrust Finance Corp.

vs.

CIH, CTA Case No.

4134, Nov .

11, 1 99 1;

Citytrust Finance Corp.

( Former .ly Investors Finance Corp. /FNCB Fiance) vs. CH~, CTA Case No .

4046, Feb.

24 , 1'3'33 ;

Paseo Realty and Dev. Corp. vs. CIR, C:TA Case No.

4528, April 30, 1'3'33 ;

Paseo Realty and Dev. Corp.

vs.

CIR, CTA Case No.

4439, J uly 5 , 1 '393 ; Filipinas Mngt. and .1..

SEC .

Leasing 1994. )

Corp.

vs.

CIR,

CT A

Case No.

4146, March 11, 891

- 5 - While it is not disputed that petitioner was able to meet the foregoing requirements, it is noteworthy to point at this juncture that pet itioner declared in its income tax return that the refundable amount of P410,026.02 "is to be applied as tax credit to the succeeding taxable year 1 '3'30.

Weight i s given to said .intention of petitioner since any declaration , return and other statements required unde r the Nation a l Internal Revenue Code

( NIRC)

is signed "under the penal ties of perjury" if not found true and correct <Section 266 , NIRC >.

Further more, Secti on 2 <a> of Rule 1 31 of the Rules of Court provides:

"SEC.

2.

Conclusive presumptions. - The following are instances of conclusive presumptions:

(a) Wh e never a ~.!:.L has, by hi s own declaration, act, or omission intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, h e cannot~]1 any li·tigation arising out of such declaration, act or omission~~ Qermi t ted to fal.sif y_ _ __ !_t ;" ( Undersco:c ing supplied> XX}C XXX In this case , herei n petitioner seeks the refund of the refundable inco me tax as at December 3 1., 198'3 of P410, 026 . 02 which it already declared in its ITR to be applied as tax credit to taxable year 1 '390. There is 892 - 6 - allegedly no internal revenue tax liability on which the 1989 tax credit can be cr-edited against by petitioner in 1990 since it allegedly again suffered a loss. However, petitioner failed to include in its written offer of evidence its 1990 Income Tax Return as proof of said loss and to show that the 1989 refundable income tax was not applied as tax credit in 1990. The verbal offer of evidence were at best confusing since the exhibit referred to do not correspond to the evidence on file. <T. S. N.

January 4, 1993, pp. 7-9>.

There is likewise no file of petitioner's 1990 ITR in the records of this case on which the foregoing can be verified. Section 34 of Rule 132 of the Rules of Court is categorically clear on this matter thus: "SEC. 34.

Offer of evidence.

The court shall consider no evidence which has not been formally offered.

The purpose for which evidence is offered must be specified. "

<Underscoring supplied.) Under this rule, evidence not formally offered in court will not be taken into consideration by the court in disposing of the issues of a case <Martin, R. G. , Rules of Court, Volume IV [19891 p. 589). Claims for refund of taxes are strictly construed against the claimant, the same being in the nature of an exemption from taxation.

In an action for refund, therefore, the burden of proof is upon the claimant to 893

- 7 - establish a Fight to refund. Failing to overcome this burden, the claim for refund should be denied as in this case.

WHEREFORE, the instant petition :for review is dismissed for lack o:f merit.

WE CONCUR:

GRUBA Judge CERTIFICATION I hereby certify that this decision was reached after due consultation among the members of the Court o:f / Tax Appeals in accordance with Section 13, Article VIII o:f the Constitution. 89 4 f: .. -;;;- o( G~ ERHESTO D. ACOSTA Presiding Judge Court o:f Tax Appeals