Philippine Realty & Holdings Corporation vs. Commissioner of Internal Revenue

DECISION

This case involves a claim for refund of overpaid creditable withholding taxes in the amounts of P5,913,663.00 and P28,874,007.00 for the taxable years 1996 and 1997, respectively.

Petitioner is a domestic corporation duly organized and existing under and by virtue of the laws of the Philippines, with principal office and business address at 5/F Philippine Stock Exchange Centre, Exchange Road, Ortigas Center, Pasig City. On April 15, 1997, petitioner filed its Annual Income Tax Return for the taxable year 1996, declaring an income tax due of P115, 152,618.00 and creditable withholding tax of P121,066,281.00, resulting to an excess creditable withholding tax in the amount of P5,913,663.00.

In said return, petitioner indicated its option to apply this excess creditable withholding tax as tax credit to the succeeding taxable year 1997. (Exhibits For the taxable year 1997, petitioner filed its Annual Income Tax Return on April 15, 1998, declaring a net loss of P265,731,215.00 and creditable withholding tax of P28,874,007.00.

Due to the net loss incurred during the taxable year 1997, petitioner was not able to apply its 1996 excess creditable withholding tax. Thus, in 1997, petitioner had an accumulated excess creditable withholding tax amounting to P34, 787,670.00 consisting of its prior year's excess credit in the amount of P5,913,663 .00 and its current creditable withholding tax ofP28,874,007.00. The return showed that petitioner opted to claim for the refund of its accumulated creditable withholding tax. (Exhibits "K8", "K8 -1" to "K8 -3") On November 23, 1998, petitioner filed with the respondent's Bureau a letter- claim for the refund of its overpaid creditable withholding tax for the taxable years 1996 and 1997 in the aggregate amount of P34, 787,670.00 (Paragraph 3, Unconditionally Admitted Facts).

On November 26, 1998, the Chief of the Appellate Division of the Bureau of Internal Revenue (BIR) informed petitioner that its claim for refund was referred to the Revenue District Officer of Revenue District Office No. 43, Pasig City, "for factual investigation, report and recommendation" (Paragraph 4, Unconditionally Admitted Facts).

In a Memorandum dated February 15, 1999, the BIR Revenue District Officer of Revenue District Office No. 43, Pasig City, assigned petitioner's claim for refund to Revenue Officer R. Porlas and Group Supervisor G. Prado for "comment and/or observation" (Paragraph 5, Unconditionally Admitted Facts). Upon termination of the examination and investigation of petitioner's corporate income tax return for the taxable year 1996, petitioner was assessed for deficiency tax in the amount of P59,394.57. (paragraph 7, Unconditionally Admitted Facts; TSN, December 6, 2000, pp. 24-25) On July 6, 1999, petitioner paid said deficiency assessment. (Exhibit "L 8" ) For the year 1997, petitioner was assessed the amount ofP20,008.07 representing deficiency expanded withholding tax. Payment for the said assessment was made on February 23, 2001. (pp. 6-8, 8-14, TSN, May 29, 2001; Exhibits I-23 and J-23) Due to respondent's inaction over petitioner's claim for refund, the latter filed its judicial claim with this court on April 13, 2000. In his Answer filed on May 15, 2000, respondent raised the following Special and Affirmative Defenses, to wit: "3. The claim for refund Is subject to investigation by the Bureau of Internal Revenue;

4. Taxes paid and collected are presumed to have been made in accordance with laws and regulations, hence, not refundable. Claims for tax refund are construed strictly against the claimant as they partake of the nature of an exemption from tax (Commissioner Internal Revenue vs. Ledesma, G.R. No. L-13509, January 30, 1979, 31 SCRA 95) and it is incumbent upon the petitioner to prove that it is entitled thereto under the law (Western Minolco Corp. vs. Commissioner of Internal Revenue, 124 SCRA 121) and he who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law.

5. Moreover, petitioner must prove that it has complied with the governing rules with reference to tax recovery or refund, which are found in Sections 204 (C) and 229 of the Tax Code, as amended, which are quoted as follows:

"Section 204.

Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. The Commissioner may - x x x (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit of refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after payment of the tax penalty: Provided, however, That a return filed showing an overpayment shall be considered a written claim for credit or refund." "Section 230. Recovery of tax erroneously or illegally collected - No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be begun after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without written claim therefor, refund or credit any tax, where on the face of the return upon which payments was made, such payment appears clearly to have been erroneously paid." The sole issue to be resolved is: Whether or not on the basis of the evidence presented, petitioner is entitled to the refund of the amounts of P5,913,663.00 and P28,874,007.00 representing excess creditable withholding taxes for the taxable years 1996 and 1997, respectively. Revenue Regulations No. 12-94 (amending Revenue Regulations No. 6-85), as affirmed by jurisprudence, laid down the following three basic requirements for the refund of excess creditable withholding taxes, thus: 1.

That the claim for refund was filed within the two-year prescriptive period provided under Section 204(3) [now 204 (C)] in relation to Section 230 [now 229] ofthe Tax Code, as amended; 2.

That the fact of withholding is established by a copy of a statement duly issued by the payor (withholding agent) to the payee, showing the amount paid and the amount of tax withheld therefrom; and 3.

That the income upon which the taxes were withheld were included in the return of the recipient Citytrust Finance Corporation vs. The Commissioner of Internal Revenue, CTA Case No. 4134, November 11, 1991, affirmed by the Court of Appeals in Citytrust Finance Corporation vs. Court of Tax Appeals and the Commissioner of Internal Revenue, CA. G.R. SP No. 28239, March 14, 1994; Citytrust Finance Corporation (formerly Investors Finance Corporation/FNCB Finance) vs.

Commissioner of Internal Revenue, CTA Case No. 4046, February 24, 1993, affirmed by the Court of Appeals in Commissioner of Internal Revenue vs. Citytrust Finance Corporation (formerly Investors Finance Corp.IFNCB Finance) and the Court of Tax Appeals, CA G.R. SP No. 31104, April 18, 1994; Ayala Life Assurance, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 5631, dated May 11, 2000; Stock Transfer Service Inc. vs. Commissioner of Internal Revenue, CTA Case No. 5796, dated May 3, 2000; Union

Bank of the Philippines vs. Commissioner of Internal Revenue, CTA Case No. 5623, dated April 12, 2000; Citibank, NA. vs. Court of Appeals and Commissioner of Internal Revenue, 280 SCRA 459; ACCRA Investments Corporation vs. Court of Appeals, 204 SCRA 957}.

As to whether or not petitioner's claim for refund of excess creditable withholding tax for the taxable year 1996 was filed within the two-year prescriptive period, the court rules in the negative. Section 230 (now 229) of the NIRC provides, viz: "SEC. 229. Recovery of Tax Erroneously or fllegally Collected. - XXX XXX XXX In any case, no such suit or proceeding shall be begun after the expiration of two years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid." Based on the aforequoted provision of law, petitioner had until April 15, 1999 within which to file both its administrative and judicial claims for refund, its 1996 Annual Income Tax Return having been filed on April 15, 1997. While petitioner's letter claim for refund was filed on November 23, 1998, its judicial claim was filed only on April 13, 2000 or after the lapse of the two-year prescriptive period. Since petitioner's claim for refund in the amount of P5,913,663 .00, representing its excess creditable withholding tax for the taxable year 1996 has been barred by prescription, we find it no longer necessary to discuss petitioner's compliance with the second and third requirements. We proceed to petitioner's claim for refund of its excess creditable withholding tax for the taxable year 1997. For the said taxable year, petitioner filed its Annual Income Tax Return on April 15, 1998. The administrative and judicial claims for refund were filed on November 23, 1998 and April 13, 2000, respectively. Clearly, petitioner was able to meet the first requirement since both the administrative and judicial claims for refund were filed within the two-year prescriptive period. To prove the fact of withholding, petitioner submitted vanous certificates of creditable withholding taxes. However, out of the total 1997 creditable withholding taxes of P28,874,007.00, petitioner was only able to substantiate the amount of P28, 744,808.15, to wit: WITHHOLDING

NATURE OF

INCOME TAX AGENT EXHIBIT INCOME PAYMENT WITHHELD

A BROWN

A Sale of real property 241 ,247,045.45 12,062,352.27

ACCURATECH MACHINE

B Sale of real property 87,222.40 43,861 .12

ADRIANA HU

c Sale of real property 1 ,497,580.00 74,875.00

AMADO MANUEL

D Sale of real property 3,155,528.55 80,208.88

ANNIE LAO FERRER

E Sale of real property 4,491 ,940.00 224,592.00

ANTONIO MARTY

F Sale of real property 2,481 ,818.18 124,090.91

BARBARA VARGAS

G Sale of real property 786,103.00 39,305.15

SELEY CHUA

H Sale of real property 1 '197,582.00 59,879.10

BELLE CORP

Sale of real property 6,185,454.60 309,272.73

BREPAC DEVT CORP

J Sale of real property 1,187,723.20 59,386.16

BROADCAST & COMM

K Sale of real property 1,335,467.50 66,773.37

CENTURY CANNING

L Sale of real property 10,437,998.60 521 ,899.93

CHESTER CO

M Sale of real property 2,104,772.80 105,238.64 CHMTRDG N Sale of real property 1 ,200,876.60 60,043.83

CHU KEN GIAP

0 Sale of real property 4,334,232.00 216,711.60

CORAZON CLAUDIO

p Sale of real property 816,942.00 40,847.10

DAKILA FONACIER

a Sale of real property 2,331 ,382.20 116,569.11

DILIP SHRIVASTAVA

s Sale of real property 983,704.00 49,185.20

DIANA SHRIVASTAVA

T Sale of real property 784,512.00 39,225.60

DIZON COPPER SILVER

u Sale of real property 1,797,170.00 89,858.50

DOMINION PROPERTY

v Sale of real property 3,330,031 .20 166,501 .56

DOMINION PROPERTY

w Sale of real property 4,762,000.00 238,100.00 ELIZALDYCO X Sale of real property 792,701 .00 39,635.05

ENRICO TENSUAN

y Sale of real property 6,912,500.00 345,625.00

FIRST ABACUS

z Sale of real property 2,061 ,818.20 103,090.91

FLORENCIA NEVALGA

AA Sale of real property 4,217,500.00 210,875.00

GBW HOLDINGS CORP

BB Sale of real property 714,520.00 35,726.00

GBW HOLDINGS CORP

cc Sale of real property 714,320.00 35,726.00

GBW HOLDINGS CORP

DO Sale of real property 720,562.40 36,028.12

GBW HOLDINGS CORP

EE Sale of real property 714,320.00 35,726.00

GBW HOLDINGS CORP

FF Sale of real property 714,320.00 35,726.00

GBW HOLDINGS CORP

GG SaDie of real property 714,320.00 36,028.12

GILT EDGED PROPERTY

HH Sale of real property 983,482.00 49,174.10

GOLD CREST INTL

II Sale of real property 3,990,000.00 199,500.00

GRANIN PROPERTIES

JJ Sale of real property 403,363.80 20,168.19

GREEN ACES HOLDINGS

KK Sale of real property 1 ,601 ,640.00 90,082.00 DEVTCORP LL Sale of real property 4,209,545.40 210,477.27

HENRY UY

MM Sale of real property 398,629.60 19,931 .48

HOME CREATION

NN Sale of real property 1,115,100.00 55,755.00

ITSHAK HAREL

00 Sale of real property 527,187.40 26,359.37

J-LO REALTY

pp Sale of real property 1 ,225, 100.00 61,225.00

JAME DE JESUS

QQ Sale of real property 4,905,500.00 245,275.00

JANUS MATUTA MGT

RR Sale of real property 1 '180,000.00 59,000.00

JENNIFER ENRIQUEZ

ss Sale of real property 1 ,790,684.80 89,534.24 LU, GEREMIAH TT Sale of real property 4,527,000.00 226,350.00

JONATHAN LU

uu Sale of real property 4,217,500.00 210,875.00

JOSEPHINE NG LO

w Sale of real property 3,951 ,780.00 197,589.00

LANDMINER'S INC

ww Sale of real property 944,824.00 47,241.23

LANDMINER'S INC

XX Sale of real property 944,824.00 47,241.23

LC LOPEZ RESOURCES

yy Sale of real property 1 ,599,434.20 79,971 .71 MEl SU LEE zz Sale of real property 2,303,408.40 115,170.42

LEONARDO CHUA LIAN

AAA Sale of real property 1 ,008,032.00 50,401 .60

LEWIS EDWARDS

BBB Sale of real property 3,756,082.00 187,804.10 LIAN , CHING CHENG CCC Sale of real property 1 ,700,870.00 85,043.50

LIRIO ANGELA CORP

DOD Sale of real property 1 ,556,250.00 77,812.95

LITTMAN DRUG CORP

EEE Sale of real property 1 ,083,1 28.00 54,156.40

MA ANGELINE ESQUIVEL

FFF Sale of real property 4,715,500.00 235,775.00

MANUEL CHUA

GGG Sale of real property 4,329,1 92.00 216,459.60

MARCEL ALBARACIN

HHH Sale of real property 744,863.80 37,243.19

MARK LEROY YU

Ill Sale of real property 1,107,814.20 55,390.71

MARILOU MONASTERIO

JJJ Sale of real property 1 ,779,915.20 88,995.76

MAXIMO BALAJADIA

KKK Sale of real property 9,326,000.00 466,300.00

MAXIMO KALAW

LLL Sale of real property 4,546,460.00 227,325.00

MEL TIP REALTY

MMM Sale of real property 4,083,450.00 204,172.50

MERIDIAN ASSURANCE

NNN Sale of real property 960,212.40 48,010.62

MERIDIAN ASSURANCE

000 Sale of real property 960,212.40 48,010.62

MERIDIAN ASSURANCE

ppp Sale of real property 1,548,785.00 77,439.25

MERIDIAN ASSURANCE

QQQ Sale of real property 492,969.60 24,648.48

MERIDIAN ASSURANCE

RRR Sale of real property 673,200.00 33,660.00

MLC-NOL REALTY

sss Sale of real property 62,824,681 .82 3,141,234.09

ONNA NG SY

TTT Sale of real property 1,485,906.60 74,295.33 HUNG PAl uuu Sale of real property 1,240,586.20 62,029.31

PERPETUA MANALO

vw Sale of real property 1,342,025.00 67,101.25

PETER YANG

www Sale of real property 2,077,316.40 103,865.82

PHIL GENETICS INC

XXX Sale of real property 607,200.00 30,360.00

PHIL GENETICS INC

yyy Sale of real property 631 ,305.40 31 ,565.27

POB CORP

llZ Sale of real property 8,013,664.91 400,683.25

PROBITY SECURITY

AAAA Sale of real property 375,000.00 18,750.00

RBL FISHING

BBBB Sale of real property 45,157.20 2,257.86

ROBERTO SY

ecce Sale of real property 2,029,927.00 101 ,496.35

SANTOS BAYLE

DODD Sale of real property 2,673,131 .80 133,656.59 SANTOS ,PARUNGAO EEEE Sale of real property 4,288,750.00 214,437.50

SEACAUCUS DEVT

FFFF Sale of real property 4,209,545.40 210,477.27

SHADWELL LTD

GGGG Sale of real property 2,063,253.80 103,162.69

SPS ANTONIO LIM

HHHH Sale of real property 1,812,589.00 90,629.49

SPS DOMINADOR LOPEZ

1111 Sale of real property 1,666,700.00 83,335.00

SPS EDGAR SALCEDO

JJJJ Sale of real property 1,267,625.00 63,381 .25 SPS E. MACAIBAY KKKK Sale of real property 1 ,608,200.00 84,910.00 SPS H. TAGAYSAY LLLL Sale of real property 3,756,082.00 187,804.10

SPS MANUEL YNGSON

MMMM Sale of real property 1,297,891 .40 64,894.57

SPS MANUEL YNGSON

NNNN Sale of real property 4,266,496.00 213,324.80

SPS RICALDE

0000 Sale of real property 1 '120,933.00 56,046.65 SPS R. CALIMBARIN pppp Sale of real property 901 ,255.60 45,062.78 SPS R. CALIMBARIN QQQQ Sale of real property 901 ,255.60 45,062.78

SPS ROBERT TY

RRRR Sale of real property 1 ,278,028.00 63,901 .40

SPS RODOLFO TAN

ssss Sale of real property 666,005.00 33,300.25

STMARY ESTATE CORP

TTTT Sale of real property 1,186,630.00 59,331 .50

STMARY ESTATE CORP

uuuu Sale of real property 1 '186,630.00 59,331 .50

SUAN YUYITANG

ww Sale of real property 4,480,000.00 224,000.00

SUNNYVALE DEVT

wwww Sale of real property 437,500.00 21 ,875.00

SYS PROPERTY

xxxx Sale of real property 1,304,362.40 65,218.12

SYS PROPERTY

yyyy Sale of real property 1,304,362.40 65,218.12

TERESITA DAZA

ZllZ Sale of real property 522,682.00 26,134.10

THREE'S CO

AAAAA Sale of real property 818,840.00 40,942.00

VENTURE COMML

BBBBB Sale of real property 781 ,725.00 39,086.25

VENTURE COMML

ccccc Sale of real property 4,467,000.00 223,350.00

VILSONS& CO

DDDDD Sale of real property 1 ,061 ,610.00 53,080.50

VISTA HOLDINGS

EEEEE Sale of real property 4,1 23,636.40 206,181 .82

WEALTH SECURITIES

FFFFF Sale of real property 541 ,227.20 27,061 .36 IGNACIO GGGGG Sale of real property 1 ,485,925.00 74,296.25

WONG LAI MING

HHHHH Sale of real property 2,957,062.40 147,853.12

WONG LAI MING

IIIII Sale of real property 2,956,562.40 147,828.12

ZEUS SYSTEMS

JJJJJ Sale of real property 2,168,250.00 108,412.50 GREENHILLS PROP.

KKKKK Sale of real property 5,844,312.71 292,215.63 GREENHILLS PROP.

LLLLL Sale of real property 5, 156,7 42.60 257,837.34 GREENHILLS PROP.

MMMMM Sale of real property 3,437,831.02 171 ,891 .50

KINGSONS ENTRP

NNNNN Sale of real property 902,580.00 45,129.00

KINGSONS ENTRP

00000 Sale of real property 601 ,580.00 30,079.00

QUORUM INTL

ppppp Sale of real property 696,243.20 34,812.16

TV REALTY HOLDINGS

aaaaa Sale of real property 2,205,000.00 110,250.00

BAKERS NINE REALTY

RRRRR Sale of real property 134,468.55 6,723.42

PLO SHARES INC

sssss Sale of real property 134,468.55 6,723.42

A BROWN

TTTTI Lease 7,500.00 375.00

A SORIANO CORP

uuuuu Lease 36,000.00 1,800.00 BANKARD wwwww Lease 75,227.20 3,761 .36

CAPITOL SECURITIES

yyyyy Lease 18,000.00 900.00

CHOPSTIX EXPRESS

ll222.

Lease 56,057.20 2,802.86

CHOPSTIX EXPRESS

ll222.

Lease 196,200.00 9,810.00

CHOPSTIX EXPRESS

ll222.

Lease 196,200.00 9,810.00

COUNTRY HOUSE

BBBBBB Lease 8,448.00 422.40

COUNTRY HOUSE

BBBBBB Lease 54,982.80 2,749.14 CRUMBS cccccc Lease 111 '139.00 5,556.95

DEL MONTE PHILS

DDDDDD Lease 10,000.00 500.00

FAR EAST BANK

EEEEEE Lease 533,1 68.00 26,658.40

FIL-ESTATE REALTY

FFFFFF Lease 3.750.00 187.50 FRIGOS GGGGGG Lease 16,800.00 840.00 FRIGOS GGGGGG Lease 56,774.20 2,838.71

GAMMOX FOODS

HHHHHH Lease 109,001.00 5,450.05

GAMMOX FOODS

HHHHHH Lease 107,171 .60 5,358.58 GAMMOXFOODS HHHHHH Lease 79,775.80 3,988.79

GDC REALTY

I IIIII

Lease 108,000.00 5,400.00

GOLDEN MAPLE

JJJJJJ Lease 108,000.00 5,400.00

GRILL & BROIL

KKKKKK Lease 206,995.20 10,349.76

HOUSE OF MINIS

LLLLLL Lease 75,000.00 3,750.00

HOUSE OF MINIS

LLLLLL Lease 50,000.00 2,500.00 JOCRISON MMMMMM Lease 36,000.00 1,800.00

LG COLLINS

NNNNNN Lease 12,500.00 625.00

MAE CHOW LINE

000000 Lease 36,935.60 1,846.78

MAE CHOW LINE

000000 Lease 68,127.60 3,406.38

MAE CHOW LINE

000000 Lease 98,632.00 4,931 .60

MARINO OLONDRIZ

pppppp Lease 36,000.00 1,800.00

MBF CARD

QQQQQQ Lease 7,500.00 375.00

MCRP CONSTRUCTION

RRRRRR Lease 72,000.00 3,600.00

ML& H CORP

ssssss Lease 18,000.00 900.00

NORTHERN TELECOM

TTTTTT Lease 20,000.00 1,000.00 OKAMURA-UBIX uuuuuu Lease 1,641 ,600.00 82,080.00

PACIFIC ONLINE

xxxxxx Lease 72,000.00 3,600.00

PARENT FOR EDUC

yyyyyy Lease 4,000.00 200.00

PSEI llllll.

Lease 10,000.00 500.00

PUNO LAW OFFICE

AAAAAAA Lease 108,000.00 5,400.00

SAINT CINNAMON

BBBBBBB Lease 24,247.40 1,212.37

SAINT CINNAMON

BBBBBBB Lease 23,077.80 1,153.89

SAKI JAP

ccccccc Lease 52,932.60 2,646.63

SAKI JAP

ccccccc Lease 102,652.00 5,132.60

SAKI JAP

ccccccc Lease 50,814.80 2,540.74

SAKI JAP

ccccccc Lease 140,428.00 7,021.40

SIZZLING SEAFOODS

DDDDDDD Lease 217,970.60 10,898.53

SPRINT FITNESS

EEEEEEE Lease 34,470.00 1,723.50

SPRINT FITNESS

EEEEEEE Lease 133,383.60 6,669.18

SPRINT FITNESS

EEEEEEE Lease 78,000.00 3,900.00 SUGBAAN FFFFFFF Lease 58,373.20 2,918.66 SUGBAAN FFFFFFF Lease 59,844.40 2,992.22

TAN LAW OFFICE

GGGGGGG Lease 72,000.00 3,600.00

TASTE OF ASIA

HHHHHHH Lease 6,908.80 345.44

TEKTITE TECH

IIIII II

Lease 72,000.00 3,600.00

UL TRALAND PROP

JJJJJJJ Lease 36,000.00 1,800.00

UNIVERSAL LEISURE

KKKKKKK Lease 7,500.00 375.00

UNIVERSAL RIGHTFIELD

LLLLLLL Lease 7,500.00 375.00

VIA MARE

MMMMMMM Lease 1 ,893,677.00 94,683.85 WBROWN&CO NNNNNNN Lease 40,000.00 2,000.00

WEST LAKE GARDEN

0000000 Lease 107,394.00 5,369.70 AYUYAO, CARMINA U-22 Lease 135,679.40 6,783.97 BANKARD V-22 Lease 8,250.00 412.50 BANKARD V-22 Lease 22,500.00 1,125.00 CRUMBS W-22 Lease 104,852.40 5,242.62

DIANA SHRIVASTAVA

X-22 Lease 784,512.00 39,225.60 EGGS, BEANS & GRAINS Y-22 Lease 24,316.20 1,215.81

FRILLE & BROIL

Z-22 Lease 123,795.00 6,189.75

GS& P FOODS

A-23 Lease 22,590.20 1,129.51 INDAY-INDAY B-23 Lease 71 ,848.60 3,592.43 INDAY-INDAY B-23 Lease 105,501 .40 5,275.07

JARDINE CMG LIFE

C-23 Lease 7,500.00 375.00 QUORUM D-23 Lease 348,121 .60 17,406.08

SIZZLING SEAFOODS

E-23 Lease 33,600.00 1,680.00

SIZZLING SEAFOODS

E-23 Lease 57,850.00 2,892.50

SIZZLING SEAFOODS

E-23 Lease 62,870.60 3,143.53 WBROWN&CO F-23 Lease 40,000.00 2,000.00 WBROWN&CO F-23 Lease 45,000.00 2,250.00 WBROWN&CO F-23 Lease 40,000.00 2,000.00

WEST LAKE GARDEN

G-23 Lease 284,299.00 14,214.95 Total p 575,361,397.84 p 28,744,808.15 /,/1 / f/

Finally, with regard to the third requirement, petitioner was able to establish that the income corresponding to the 1997 creditable withholding taxes was declared as part of its gross income in its 1997 Annual Income Tax Return. It bears stressing that the 1997 Income Tax Return of petitioner was examined by respondent's revenue examiner who found no finding of discrepancy of income except for the amount of P20,008.07, representing deficiency expanded withholding tax and penalties which, as stated earlier, was settled by petitioner (page 841-C, BIR records). In sum, petitioner is entitled to the refund of the amount of P28, 744,808.15, representing its excess creditable withholding taxes for the year 1997, computed as follows:

Total Excess Creditable Withholding Taxes for 1997 & 1998 Less: Exceptions P34,787,670.00 1.

1996 Excess Creditable Withholding tax P 5,913,663.00

2. Not validly supported by certificates of creditable withholding tax 129,198.85 6,042,861.85 Refundable Amount P28 744 808.15

WHEREFORE, m vtew of all the foregoing, the instant petition Is PARTIALLY GRANTED.

Accordingly, respondent is hereby ORDERED to REFUND to petitioner the amount of P28, 744,808.15 representing its overpaid creditable withholding taxes for the taxable year 1997.

WE CONCUR:

s:L-~<?. ~~.

Q .

ru..\Niro C. CASTANEDA,'fR. Associate Judge CERTIFICATION I hereby certify that the above decision was reached after due consultation with the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution.

~ l-9. CL-vt_ ERNESTO D. ACOSTA Presiding Judge