Court of Tax Appeals
0Maja Develupment Curpuret Lon vs. ~ C.17.A. Case No. 4788 Cummissiuner of Internal
REPUBLIC UF THE PHILIPPINES
COURT OF TAX APPEALS
QUEZON CITY
MAJA DEVELUPMENT CURPURET LON,
Petitioner,
~ versus ~ C.17.A. CASE NO. 4788
CUMMISSIUNER OF INTERNAL Promulgated: ;
REVENUE, SEP 30 1994
Respondent.
DEeCPtsicun
This ais a ciaim for the refund of P124,402.40
peihiaenstng alleged excess withholding tax payments for
‘taxable year 1989,
Petitioner, a corporation engaged in the renting out
of real properties, filed its income tax return for 1989
reflecting a tax due to be paid by it in the amount of
P1195, 091.00, From this tax due was deducted or appieen
prior year’s tax credit amounting to £75, 959. 00 leaving a
tax due balance of P119,132.00. However, there is a Sx
creditable tax withheld from the petitioner for the year
1989 amounted to p244, 934. 40. Hence, according ta
Petitioner, this resulted to an excess payment of income
taxes in the amount of £124,402. 40.
Respondent, on the other hand, argued in her
Memorandum that the amount of P7/S, 359.00 representing
925
DECISIUN ~
C. 1.8. CASE NU. 4786
Hetitioner's prior year (1988) excess tax credit "were
actually and in fact withholding taxes, withheld in 1984,
1985, 1986, 1987 and 1988 (Bhs. "F" to "K-3", inclusive,
Petitioner), Such being the case, any claim for tax
credit therefor has already prescribed the instant
petitian having been filed only on April 14, 1992, or
more than two (2) years from the date of payment
thereof..." (Memorandum far the Respondent, p. 4).
Although the Kespandent 2156 correct an claiming that
prescription has already set in, pursuant to Sec. 230 of
the NIRU, rt as anly true as far as the years prior to
1988 are concerned. The excess creditable withhoiding
taxes for 1988 were validly carried over or applied to
1989 income tax liabaidaty pursuant to Sec. 69 of the NIRC
which provides thus:
Sec. 69. Final adjustment return. —- Every
corparatian liable to tax under Section e4
shall file a final adjustment return covering
the total taxable ancome for the preceding
calendar or fiscal year. if the sum of the
guarterly tax payments made during the said
taxable year is not equal to the total tax due
on the entire taxable income of that year the
corporation shall either:
(a) Pay the excess ‘tax still due or
(b>) Be refunded the excess amaunt paid,
as the case may be
In case the corporation is entitled for a
refund of the excess estimated quarterly income
taxes paid, the refundable amount shown on its
final adjustment return may be credited against
the estimated quarterly income tax liabilities
924%
DECISION -
C.T.A. CASE NO. 47868
- R=
for the taxable quarters of the succeeding taxable year. (see also Pasea Realty and Development Corp. v. Comsmissioner of Internal Revenue, CTA Case Na. 4528, April 30, 1993.)
Hence, from the evidences presented by the Petitioner, Exhs. "3-1", PRY PKG", "K-22" and "K-3”" are already considered prescribed as these certificates pertain to creditable withholding taxes prior to 19868. Exhibit K-4 is also not considered in Qur succeeding computation since said dacument is ioe &! Dertatannte of Ureditable Withholding Tax At Source by the withholding agent but merely an affidavit of Petitioner's own accounting manager which canld therefore be considered self-serving.
Respondent contended that the excess creditable withholding taxes in the hmount: ‘st P1c4,402¢.40 for the year 1989 were no longer refundable. For said taxes were already applied by petitioner in its First and second quarter income tax liabilities. :
However, the quarterly income tax payments for the First and second quarters of 1990 in the amounts of 78,492.00 and P18,866.00 (Exhs. “2", “A-a", "3", “d-a", Respondents; Exhs. "T", and “ou, Petitioner) shouta only be considered as mere installments of the annual income TT due. "These quarterly tan payments which are computed based on the cumulative figures of gross receipts and deductions in arder to arrive at a net 9295
DECISIUN —
C.1T.A. CASE NO. 4788 taxable income, should be treated as advances or portions of the annual income tax due, to be adjusted at the end of the calendar or fiscal year. This is reinforced by Section 87 (now Section 69) which provides for the filing of adjustment returns and final payment of income tax," (Commissioner of Internal Revenue v. TMX Sales, Inc. , et al., G.R. No. 83736, January 15, 1992) Respondent should be reminded that "where the tax i5 payable by the taxpayer in Quarterly installments, the final payment is the last quarter payment at the end of the tax year when it is finally ascertainable that the taxpayer either made profits or suffered losses in its operations”. (Commissioner of Internal Hevenus v. IMX Sales, Inc., et al., supra) In the instant case, petitioner suffered a net loss from operation in the year 1990 iain the amount of P3222, 248. 43 (Exh. "5S", Respondent; Exh. "R”, Petitioner), It therefore follows that rE MEARE has no income tax liability. Thus, its creditable withholding taxes for the year 1989 — be utilized in 1990, Further, petitioner cannot apply the excess payments in 1989 more than the year 1390 for 1t will run counter with the provision af law. (Paseo Healty and UVeveloepment Corp. v.
Commissioner of Internal Revenue, supra)
DECISION -
C.l.R.
CAS~ NU.
~166 - 5 - Thus , t he claim for refun d/taM credit
GRANTED but on
a reduced amount of P111,502.40, computed a s follows :
Tax DuP for 1989 lsep Exh. "A"I LPss: Prior yPar tax rrpdi t fi9B8l W!j_hh(IJ_lll!!!J J!!l~nL National Bookstore, Inc.
Yasaka !Mani lal Industry, Inc. Car•elo! Bauer•ann Pr1nt1ng Corp. Pnte Inc-.
Res ins Incorporated Re•aining tax liabil ity for 1989 l ess: Creditable Withho lding TaMes for 1909 loh t h~l!!!.!lg_fly en t
Crown Cards Corporatton
Yasaka lManilal Industry, Inc.
Cartelo & Bauertann Print ing Corp. Pri•e Inc.
Resins Incorporated
Ten!5ita Roxas Total A•ount Refundable ln all the Exh.
F
G
H
1
J
f.xh.
l 1'1
N
0 p (}
Aaount of
lax Withheld p 31,800.00 13, 122.00 12, 1&?.00 4,400.00 1,800.00
Aaount of
TaK Withheld
PIJO, 380.00 53,800.20 4'1,8b4.20 5,240.00 1,800.00 2,225.00 63,284.00 Pl.l1,807.00 243,309.40 IPli 1,502. ljQ) the Re s pond ent 1s h ereby ORDERED to REFUND the Pet itio ner or issue a tax credit on its.
behalf for the am ount of P111 , 502 .40 represen~ing excess income tax payment.
SU lHWEREO.
~Q,~ EHNESlO £). ACOSTA Pr e sid ing Judge
DECISION ~—
£.7.8. CASE NO. 4786
WE CONCUR:
GRUBA
Terrt¥ne 32 nt e bushy Heres §). PE VEE Associate fudge
(LER CATION
i hereby certify that this decisidn was reached after due consultation among the members af the Court of Tax Appeals in accordance with Section 13 Article VIIZof the Constitution.
7a 2: Gbseh—
ERNESTO D. ACOSTA
Presiding Judge
Court af Tan Apyuegaie.
CL
ro co