Stateland, Inc. vs. Commissioner of Internal Revenue

DECISION

CASANOVA, L.:

This is a Petition for Review (To a Division of the Court of Tax Appeals)l filed by petitioner Stateland Inc., seeking a refund or issuance of a tax credit certificate (TCC) of its alleged excess payment of creditable withholding tax for the taxable year 2009, in the total amount of Eleven Million Five Hundred Seventy Thousand One Hundred Eighty-One Pesos Pll,570,181.00. The facts of the case, as culled from the records, are briefly narrated as follows:

Petitioner is a corporation duly organized an existing under and by the virtue of the laws of the Republic of the Philippines, with principal office at 3rd Floor, State Centre Bldg., 333 Juan Luna St.~

Cf A CASE NO. 8457

Binondo, Manila. It is primarily engaged in the business of developing real properties into subdivisions, and building houses on subdivision lots, or constructing residential or commercial units, townhouses and other similar units and offering these for sale. It is a registered taxpayer with Revenue District Office (RDO) No. 30 of Revenue Region (RR) No. 6 of the Bureau of Internal Revenue (BIR) with Taxpayer Identification Number (TIN) 000-341-850-000. xxx. 2 Respondent is the duly appointed Commissioner of Internal Revenue who has the power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto or other matters arising under the National Internal Revenue Code (NIRC) or other laws or portions thereof administered by the BIR. She holds office at the BIR 5th Floor National Office Building, Diliman, Quezon City, where she may be served with summons, notices and other processes of this Honorable Court.3 As of the taxable year 2008, petitioner has accumulated creditable withholding tax in the total amount of P54,561,791.00, which is a summation of those taxes paid in 2008 and those carried over from prior taxable years. In 2009, petitioner paid additional creditable withholding taxes in the amount of P11,570,181.00, thus making its accumulated creditable withholding taxes amount to P66,131,972.00 as of the year ended December 31, 2009.4 Petitioner's 2009 income tax due, however, amounted to P3,328,323.00 only. After applying this 2009 income tax liability to the aforesaid accumulated creditable withholding taxes, there remained a balance of PP62,803,649.00. Hence, petitioner opts to seek a refund of a portion of such unapplied excess payment, amounting to P11,570,181.00, representing amounts withheld in 2009.5 On July 21, 2010, respondent received petitioner's letter-request dated July 15, 2010 claiming refund of a portion of its total excess payment of CWT as of taxable year ended December 31, 2009 in the ~

total amount of Eleven Million Five Hundred Seventy Thousand One Hundred Eighty One Pesos (Php11,570,181.00).6 Respondent issued a Letter of Authority7 dated August 26,2010 and conducted an examination/investigation from August 2010 to August 2011, which yielded no adverse findings regarding petitioner's creditable withholding taxes and subject of the present claim for refund.s Respondent has neither denied nor approved petitioner's administrative claim for refund or issuance of tax credit certificate.9 Hence, petitioner filed the instant case. On May 23, 2012, respondent filed her Answerlo, averring the following Special and Affirmative Defenses: "SPECIAL AND AFFIRMATIVE DEFENSES

7. The petition is premature considering that petitioner's claim for tax refund/ credit of the alleged excess payment of creditable withholding tax for taxable year 2009 is still pending investigation.

8. The claim for refund is construed strictly against the claimant and should not be allowed unless proven explicitly and categorically.

9. The allegations regarding tax refundability do not ipso facto merit the refund claimed.

10. There is no indication in petitioner's 2009 annual income tax return (BIR Form 1702) (Annex "D" of the Petition) that it opted to be refund (sic) the excess creditable withholding tax, hence, the presumption is that it opted the same to carried (sic) over as tax credit in year 2010." On May 31, 2012, petitioner filed its Reply To Answern. ~ 6 Par. 4, JSFI, Id., p. 000668. 7 Exhibit "I" of Petition for Review, Docket (Vol. I), p. 000618. 8 Par. 2, "Statement of Facts", Petition for Review, Ibid., p. 000014. 9 Id., p. 000015.

lO Docket (Vol. I), pp. 000627-000630.

Petitioner filed its Pre-Trial Brief12 on June 15, 2012 while Respondent filed her Pre-Trial Brie£13 on June 19, 2012. On July 3, 2012, the parties filed their Joint Stipulation of Facts and Issue GSFI)14• As jointly stipulated by the parties, the issue to be resolved in the case at bench is as follows: "WHETHER OR NOT PETITIONER IS ENTITLED

TO ITS CLAIM FOR REFUND OF ITS UNUTILIZED

OR EXCESS PAYMENT OF CWT FOR THE

TAXABLE YEAR ENDED 31 DECEMBER 2009 IN

THE AMOUNT OF PHP11,570,18l.00."15 During the trial, petitioner presented its documentary and testimonial evidence. On August 2, 2012, petitioner filed a Motion for Commissioning of an Independent Certified Public Accountant16. In the hearing dated August 16, 2012, this Honorable Court granted the said Motion and commissioned Mr. Romeo A. De Jesus, Jr., as Independent Certified Public Accountant (ICPA). In a Resolution17 dated September 20, 2012, the Honorable Court noted the filing of the ICPA Report. Petitioner presented Mr. Romeo De Jesus in the hearing dated October 1, 2012. On October 24, 2012, petitioner filed its Formal Offer of Evidence .IS Respondent filed a Manifestation19 on January 15, 2013 stating that she is waiving her right to present her evidence. This Honorable Court, in the hearing dated January 16, 2013, granted respondent thirty (30) days from said date or until February 15,2013 to file her Memorandum. Petitioner was granted twenty (20) days from notice to file its Memorandum. Upon receipt of the parties~ 12 Id., pp. 000647-000659. 13 Id., pp. 000660-000662. 14 Id., pp. 000667-000671. 15 Submitted Issues for Trial, JSFI, Docket (Vol. I), p. 000670. 16 Docket (Vol. II), pp. 000718-000720. 17 Ibid., p.000739.

1s Id., pp.000758-000763.

memoranda or the expiration of the period granted, the case shall be submitted for decision. On February 8, 2013, petitioner filed its Memorandum (For The Petitioner)2o.

Respondent, on the other, hand filed her Memorandum21 on February 15, 2013. In a Resolution22 dated February 18, 2013, the instant case was submitted for decision. After a careful and thorough evaluation of the arguments of both parties, as well as the evidence they presented to support their respective positions, this Court does not find merit in the present petition.

The sole issue raised in the instant case is petitioner's entitlement to the refund of its alleged excess creditable withholding taxes for the taxable year 2009. Pertinent to the resolution of the said issue is Section 76 of the National Internal Revenue Code (NIRC) of 1997, which is quoted hereunder for easy reference: "SEC. 76.

Final Adjustment Return. - Every corporation liable to tax under Section 27 shall file a final adjustment return covering the total taxable income for the preceding calendar or fiscal year. If the sum of the quarterly 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 balance of tax still due; or (B) Carry over the excess credit; or (C) Be credited or refunded with the excess amount paid, as the case may be. In case the corporation is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, the excess amount shown on its final adjustment return may be carried over and credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. Once~ 2o Id. , pp. 000891-000905. 21 Id., pp. 000906-000911. n Id., p. 000912.

CfA CASE NO. 8457 the option to carry over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed therefor . 11 Based on the afore-quoted provisions, a corporation entitled to a tax credit or refund of the excess estimated quarterly income taxes paid has two options: (¹) to carry over the excess credit or (²) to apply for the issuance of a tax credit certificate or to claim a cash refund. If the option to carry over the excess credit is exercised, the same shall be irrevocable for that taxable period23. In exerCising its option, the corporation must signify in its annual corporate adjustment return (by marking the option box provided in the BIR form) its intention either to carry over the excess credit or to claim a refund; To ease the administration of tax collection, these remedies are in the alternative and the choice of one precludes the other24. On April 15, 2010, petitioner filed its Annual Income Tax Return (ITR) for taxable year 200925. Below are the pertinent amounts reflected on the return: Sales/Revenues/Receipts/Fees :P 121,176,843.00 Less: Cost of Sales/Services 0.00 Gross Income from Operation :P 121,176,843.00 Add: Non-Operating & Taxable Other Income 45,239,303.00 Total Gross Income :P 166,416,146.00 Less: Deductions 176,841,722.00 Taxable Income (:P 10,425,576.00) Income Tax 0.00 MCIT p 3,328,322.92 Prior Year's Excess Credits other than MCIT :P 54,561,791.00 ~ 23 Systra Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 176290, September 21, 2007.

24 Philippine Bank of Communications vs. Commissioner of Internal Revenue, et al., G.R. No. 112024, January 28, 1999.

Page 7 o£24 Creditable Tax Withheld for the first 3 Quarters Creditable Tax withheld for the 4th Quarter Total Tax Credits/Payments Tax Payable/ (Overpayment) 8,248,481.00 3,321,700.00 66,131,972.00 (P 62£803£649.08} Records show that petitioner marked the option "To be refunded"26 in its 2009 Annual ITR. Further perusal of petitioner's Annual ITR for taxable year 200927 shows that petitioner had total tax credits of P66,131,972.0028, which consisted of its prior year's excess credits in the amount of P54,561,791.0029 and creditable taxes withheld during the first three quarters of year 2009 amounting to P8,248,481.0030 plus the creditable taxes withheld for the fourth quarter of 2009 amounting to P³,321,700.0031 or in the aggregate amount of P11,570,181.00. Petitioner claims that its 2009 income tax due amounting to P3,328,322.92 was paid using a portion of its prior year's excess credits of P54,561,791.00, thus, leaving the prior year's excess credits in the amount of P51,233,468.08 (P54,561,791.00 less P3,328,322.92) and creditable taxes withheld during the year 2009 in the amount of P11,570,181.00 totaling to P62,803,649.0832 unutilized as of December 31,2009, as shown below: Prior Year's Excess Credits p 54,561,791.00 Less: Tax Due (MCIT) 3,328,322.92 Balance of Prior Year's Excess Credits p 51,233,468.08 Add: Creditable Taxes Withheld - 2009 11,570,181.00 Excess Creditable Taxes Withheld as of December 31, 2009 p 62,803,649.08 Since as only the prior year's excess credits of P51,233,468.0833 were carried over to the subsequent quarters/year 2010, the exces~ 26 Ibid., Line 31.

27 Id.

28 Id., Line 28G.

29 Id., Line 28A.

3o Id., Line 28C.

3t Id., Line 28D.

creditable tax withheld in year 2009 in the amount of P11,570,181.00 appears to be refundable pursuant to Section 76 of the NIRC of 1997. However, in addition to the requisite provided under Section 76 of the NIRC of 1997, a taxpayer must also satisfy the following requirements in order to be entitled to a refund or issuance of tax credit certificate for excess/unapplied CWT:

1. The claim for refund was filed within the two-year prescriptive period as provided under Section 204 (C) in relation to Section 229 of the NIRC of 1997, as amended;

2. 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. The income upon which the taxes were withheld was included in the return of the recipient (Section 2.58, Revenue Regulations No. 2-98, as amended; Citibank N.A. vs. Court of Appeals and CIR, G.R. No. 107434, October 10, 1997, 280 SCRA 459). As regards the first requisite, the pertinent provisions of the NIRC of 1997 are as follows: 11SEC. 204.

Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. - The Commissioner may - XXX XXX XXX "(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 or 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 the payment of the tax or penalty: Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund.'' XXX XXX XXX 11SEC. 229.

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 filed 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 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.'' (Emphasis supplied) It is well-settled in our jurisprudence that the reckoning of the two-year prescriptive period for the filing of a claim for refund or tax credit certificate of excess income tax withheld, both in the administrative and judicial levels, commences from the date of filing of the Final Adjustment Return.34 The reason is obvious: it is only when the adjustment return covering the whole year is filed that the taxpayer would know whether a tax is still due or a refund can be claimed based on the adjusted and audited figures.35 ~

In the case at bench, petitioner filed its Annual Income Tax Return for taxable year 2009 on April 15, 201036. Counting therefrom, petitioner had until April 16, 2012 (April 15, 2012 being a Sunday) within which to file its claim for refund or tax credit certificate, both in the administrative and judicial levels. Therefore, petitioner's administrative claim for refund filed on July 21, 201037 and the Petition for Review, filed on April 11, 2012, are both well within the two-year prescriptive period. In compliance with the second requisite, petitioner presented various Certificates of Creditable Tax Withheld at Source (BIR Form 2307)38 and Withholding Tax Remittance Returns (BIR Form 1606)39 issued to it by various withholding agents for the year 2009, which were examined by the Court-commissioned ICPA, Mr. Romeo De Jesus, Jr. of R.S. Bernaldo & Associates. In his Report dated September 17, 2012,40 the ICP A grouped the CWT Certificates, as follows:

CWT Grouping Amount Reference Cash Basis p 6,789,824.70 AnnexA Fully Settled Accounts in 2009 2,836,007.27 Annex B Last Collection happened in 2009 1,250,760.16 Annex C Corporation Buyers 23,768.77 Annex D HMDF Accounts 80,938.02 Annex E Accounts settled in 2010 590,517.26 AnnexF TOTAL p 11,571,816.18 The foregoing creditable withholding taxes of P11,571,816.18 are presented in detail below: AMOUNT REALIZED

OF TAX

GROSS NAME

TAX BASE

WITHHELD PROFIT EXHIBITS

1. SUMMARY OF THE 2009 SALES UNDER CASH BASIS supported with BIR Form 2307 36Par. 7 Summary of Admitted Facts, JSFI, Docket (Vol. I), p. 000669, Exhibit "D". 37 Exhibit "B".

38 Exhibits "N" to "N-256". 39 Exhibits "0" to "0-256". 4o Exhibit "BB", pp. 8-9. I ~~

MA. THERESA LLANES

RICHARD ORILLA

SPS. CARlOAD AND JOEL DIMA YUGA SPS. DALMACIO AND EMELITA MAYUGA

LEOVINO ULIT

ELMER BONDOC

TOTAL -1ST QUARTER

SPS. NORMAN AND SALVA CION BARCHETA

CEZAR AND REVEL YN YAMBAO

ANDROSCA SPS. ROMEL AND LETECIA LAUD SPS. MIGUELITO AND APRIL ROBLES

MYLEN ASPIRIN

SPS. ABELARDO AND CATALINA ADIZAS

REMIGIA BAUTISTA

REMIGIA BAUTISTA

SPS. JONATHAN AND DELIA ECHAGUE SPS. RAMIRO AND MA. CORAZON GONZALES

JUANITA NUGUID

SPS. ALBERTO AND ELIZA CALVERO SPS. LUISITO AND LOIDA ALGURA SPS. ROBERTO & ANA LEA QUIROZ SPS. ROLANDO AND MA. TERESA MENDOZA SPS. MINERVA AND ELIZAR MONTEMAYOR

LUNINGNING MINEYAMA

KEISUKE MINEYAMA

LUNINGNING MINEYAMA

GERALD RAYMOND CHIN

GERALD RAYMOND CHIN

p 2,247,800.00 p 112,390.00 734,083.00 22,022.49 2,398,358.00 119,917.90 704,000.00 21,120.00 965,308.95 28,959.27 722,684.00 21,680.52 7,772,233.95 326,090.18 660,000.00 19,800.00 2,217,935.00 110,896.75 6,232,142.86 311,607.14 1,656,994.00 49,709.82 2,117,142.86 105,857.14 2,297,800.00 114,890.00 2,246,686.00 112,334.30 252,814.00 12,640.70 754,184.00 22,625.52 2,449,804.00 122,490.20 1,154,949.00 34,648.47 1,768,800.00 53,064.00 4,029,187.50 201,459.38 2,247,800.00 112,390.00 2,748,980.69 137,449.02 2,721,428.57 136,071.43 1,198,425.00 35,952.75 731,500.00 21,945.00 2,597,137.50 129,856.88 1,741,071.43 52,232.14 1,741,071.43 52,232.14 p 1,257,124.90 "N" "T" 95,430.79 "N-1" "T" 1,238,721.36 "N-2" "T" 503,566.33 "N-3" "T" 125,490.16 "N-4" "T" 328,644.39 "N-5" "T" 3,548,977.93 364,435.58 "N-6" "T" 1,226,708.44 "N-7'' "T" 1,901,530.65 "N-8" "T" 307,381.04 "N-9" "T" 953,060.19 "N-10" "T" 1,307,124.90 "N-11" "T" "N-12" "T" 1,282,201. 77 "N-16" "T" 350,229.73 "N-13" "T" 701,702.80 "N-14" "T" 454,604.22 "N-15" "T" 1,182,637.91 "N-17" "T" 2,046,681.43 "N-18" "T" 1,257,124.90 "N-19" "T" 1,482,457.93 "N-20" "T" 1,498,005.24 "N-21" "T" 934,216.98 "N-22" "T" 549,287.58 "N-23" "T" 1,226,287.47 "N-24" "T" 831,631.85 "N-25" "T" 831,631.85 "N-26" "T" ..,.

MILA DELACRUZ

SPS. ELENA AND MAXIMO JR.

MAN GILA

MILA DELACRUZ

SPS. TERESITA AND CLEMENTE ABUTAL SPS. JUNELL AND GENALINE LA YAG

SARAH JOY MANA TO

SARAH JOY MANA TO

MIRLACOBOL SPS. PAUL AND IRENE CAC SPS. ARNOLD AND MARY ANN VALMONTE SPS. RAFAEL JR. & EVELYN DORONA

TOTAL - 2ND QUARTER

SPS. JULIUS AND YOLANDA BORJA SPS. JULIUS AND YOLANDA BORJA SPS. RICK AND ROSITA ESCOBIDO SPS. RICARDO JR. AND JONAL YN DELMORO SPS. DANILO AND TERESA OLIVA SPS. EDNALIN AND MARLON GUMARANG SPS. SALVADOR AND ROSSYL AQUINO SPS. BENEDICT AND VENUS PATACSIL SPS. FELEUGEN AND FIDELA GEONZON

JOSEPH JOACHIM CHIN

SPS. NANCY AND EFREN CASTRO SPS. MICHAEL ANGELO AND MELBA CARREON SPS. TYRONE AND MARILOU MATIAS

FLORITA BUENAOBRA

JASMIN AND SHERIL YN SAN DIEGO

SPS. ERAL YN AND ALLAN MANDARIAGA 2,678,571.43 133,928.57 3,984,544.64 199,227.23 2,638,392.86 131,919.64 3,391,622.32 169,581.12 2,990,084.82 149,504.24 1,046,330.00 31,389.90 485,000.00 7,275.00 3,109,842.86 155,492.14 1,400,000.00 42,000.00 2,492,680.00 124,634.00 2,499,000.00 124,950.00 70,281,922.77 3,220,054.62 523,800.00 15,714.00 838,080.00 25,142.40 1,852,063.00 55,561.89 2,338,062.00 116,903.10 800,000.00 24,000.00 2,703,453.57 135,172.68 2,289,602.00 114,480.10 954,000.00 28,620.00 2,766,071.43 138,303.57 1,741,071.43 52,232.14 1,719,732.14 51,591.96 2,748,980.36 137,449.02 676,252.00 20,287.56 1,421,970.00 42,659.10 2,247,800.00 112,390.00 1,250,000.00 37,500.00 1,985,899.42 "N-27" "T" 2,225,390.69 "N-28" "T" 1,943,310.14 "N-29" "T" 1,734,266. 93 "N-30" "T" 1,570,672.54 "N-31" "T" 489,179.60 "N-32" "T" 302,085.36 "N-33" "T" 1,652,818.50 "N-34" "T" 462,391.07 "N-35" "T" 391,283.74 "N-36" "T" 686,024.42 "N-37" "T" 34,132,264.87 99,297.31 "N-38" "T" 158,875.74 "N-39" "T" 1,036,351.47 "N-40" "T" 1,300,807.64 "N-41" "T" 508,377.07 "N-42" "T" 1,355,104.15 "N-43" "T" 977,088.67 "N-44" "T" 604,052.48 "N-45" "Til 1,542,648.10 "N-46" "T" 831,631.85 "N-47" "T" 1,174,397.26 "N-48" "T" 1,483,626.57 "N-49" "T" 342,162.00 "N-50" "T" 772,236.94 "N-51" "T" 1,258,005.08 "N-52" "T" 443,479.54 "N-53" "T"

SYLVIA THEUNS

SPS. HONORA TO AND ROSEMARIE ESTAMPADOR SPS. ROBERTO AND SOLEDAD CASIO

TOTAL- 3RD QUARTER

RENE AND FRANCISCO NOB

SPS. GILBERT BONGBONG AND

AGNES NISPEROS

SPS. DANILO AND IRENE GRACE BAGUINON

LOURDES PERFECTO

SPS. ROGEN AND JEMERICK PASTOR SPS. CLARENCE AND MARILEN CORPUZ SPS. FERNANDO AND NENETTE LAURETA SOLAR RESOURCES, INC. SPS. PABLO AND BELINDA JUANILLO

JOSEPH JOACHIM CHIN

SPS. RUSSEL AND MARIA ELONA ELIZAB SPS. LEONARDO, JR. AND ANALIZA SANCHEZ

TOTAL- 4TH QUARTER

TOTAL 2,175,548.00 1,640,625.00 3,917,044.64 34,604,155.57 1,475,084.00 4,029,187.50 2,627,678.57 828,400.00 735,560.00 2,499,800.00 2,715,866.07 16,293,000.00 912,000.00 1,741,071.43 3,227,678.57 1,380,000.00 38,465,326.14 151,123,638.43

2. SUMMARY OF THE FULLY SETTLED ACCOUNTS IN 2009 supported with BIR Fonn 2307 SPS. SANTIAGO AND MERCED IT A BERBANO 3,369,464.29 SPS. RANILO AND KA THYRN DE GUZMAN 2,922,213.39 SPS. ARCHIBALD AND JINNYU GALERA 2,247,800.00

EMARVIC FAYO

2,265,511.00 SPS. HILDA AND RUDEL VALDECANTOS 2,880,682.14 SPS. GIL AND JENNIFER GUERRERO JR.

1,852,074.00 SPS. JEFFERSON AND MYRNA WAGWAG 1,529,982.00

JEROME A YROSO

729,076.00 108,777.40 1,178,801.43 "N-54" "T" 49,218.75 449,499.94 "N-55" "T" 195,852.23 744,398.52 "N-56" "T" 1,461,855.90 16,260,841.76 44,252.52 759,531.77 "N-57" "T" 201,459.38 2,218,985.97 "N-58" "T" 131,383.93 1,405,364.71 "N-59" "T" 24,852.00 510,531.00 "N-60" "Til 22,066.80 440,482.16 "N-61" "T" 124,990.00 1,095,021.36 "N-62" "T" 135,793.30 1,179,856.33 "N-63" "T" 814,650.00 (190,131.39) "N-64" "T" 27,360.00 562,582.48 "N-65" "T" 52,232.14 831,631.84 "N-66" "T" 161,383.93 1,808,070.97 "N-67" "T" 41,400.00 673,253.76 "N-68" "T" 1,781,824.00 11,295,180.96 6,789,824.70 65,237,265.52 168,473.21 1,669,517.78 "N-78" "U" 146,110.67 1,563,774.20 "N-79" "U" 112,390.00 1,082,051.33 "N-72" "U" 113,275.55 1,019,427.66 "N-77" "U" 144,034.11 990,821.97 "N-83" "U" 55,562.22 793,634.19 "N-74" "U" 45,899.46 581,845.68 "N-71" "U" 21,872.28 345,142.09 "N-73" "U" CfA CASE NO. 8457 SPS. AMABEL AND LANI PALOMATA

MILANI SALES

MARIBEL RAGUDO AND SANTIAGO

MALI CD EM

SPS. ELEONOR AND SALDY DISPO

VIRGINIA MENDOZA

MARGIE VIACRUSIS

VIRGINIA DERIJE

SPS. RONALD AND EDNA ARNEDO

SHIRLEY MANANSALA

FRANCIS FLORES

SPS. JOVENTINA AND ROGELIO JOSUE

REBECCA REYES

RODRIGO TOLARESA JR AND

FRANCIS NENDY TOLARESA

TOTAL -1ST QUARTER

SALVE GARCIA

SPS. JOSE MANUEL AND

HONEYLETTE BUAN

SPS. RENA TO AND PERL YN TOLENTINO

LETICIA CERENA

SPS. JAY AND MYRNA CALSO SPS. JANIEL AND LARIE JOYCE ARCELO SPS. JENETTE AND ARMANDO TORRES SPS. CHERYL AND REX BIDBID AAAMAGTOTO

RUBY ROSA LABIAL

REMEDIOS AND VALENTINO

ALCANTARA AND RONCALER

SPS. EMMANUEL, JR. AND EMILISA TUNDAG SPS. RANDlE AND NANCY MOJICA

CRISTINA MENDIETA

1,498,000.00 44,940.00 1,633,007.27 48,990.22 368,182.00 5,522.73 395,949.00 5,939.24 311,305.51 4,669.58 453,122.00 6,796.83 780,543.72 23,416.31 837,834.00 25,135.02 1,909,610.91 57,288.33 519,973.82 15,599.21 399,896.00 5,998.44 720,173.52 21,605.21 1,864,088.00 55,922.64 29,488,488.57 1,129,441.26 2,240,357.14 112,017.86 2,725,746.43 136,287.32 2,228,484.55 111,424.23 1,561,020.00 46,830.60 1,665,373.00 49,961.19 898,000.00 26,940.00 633,851.00 19,015.53 798,000.00 23,940.00 500,000.00 7,500.00 628,200.00 18,846.00 736,528.32 22,095.85 500,000.00 7,500.00 342,258.00 5,133.87 718,973.70 21,569.21 283,694.65 "N-86" "U" 203,398.23 "N-69" "U" 75,556.52 "N-75" "U" 59,162.58 "N-76" "U" 40)03.91 "N-81" "U" 37,889.81 "N-80" "U" 34,253.04 "N-88" "U" 32,096.86 "N-84" "U" 24)16.90 "N-85" "U" 8,393.37 "N-87" "U" 3,968.66 "N-70" "U" 1,942.97 "N-82" "U" "N-89" "U" 8,850,792.40 1,223,863.23 "N-90" "U" 1,096,135.88 "N-98" "U" 884,585.02 "N-103" "U" 674,787.10 "N-99" "U" 547,876.59 "N-101" "U" 284,516.27 "N-102" "U" 275,672.49 "N-93" "U" 203,277.83 "N-95" "U" 124,500.49 "N-104" "U" 63,660.99 "N-94" "U" 47,028.53 "N-106" "U" 34,372.65 "N-105" "U" 30,881.21 "N-96" "U" 28,745.21 "N-100" "U"

SPS. MANUEL AND LEONORA OGNITA SPS. CHARITO AND ALDWIN ANDRES

NORMAN SAN PASCUAL

SPS. ERWIN AND MYRNA HARINA

TOTAL- 2ND QUARTER

SPS. FRANCISCO AND MA. EMILYN ATIENZA SPS. CARLITO AND MA. EMMA MARCIAL SPS. ADAN AND MARITES REPUBLICA SPS. RAMON AND CRESENCIA

SA MAN

SPS. THADDEUS CLAUDIUS AND RONERONDON SPS. JONATHAN AND MARIA

SOLEDAD ALAMEDA

SPS. VIRGILIO AND LOURDES GONZALES

REBECCA CACHO

ELENIT A SOTO

SPS. JOVITO AND MARIFE GARCIA SPS. ALDRIN AND JOSALL Y TIMBANCAYA SPS. REYNALDO, JR. AND EMMA FERRER

HA YDEE UCHIDA

SPS. HERMINIO AND BENITA DELA

CRUZ CAR

SPS. NORVILLE AND ROWENA ROXAS

JORGE VINCENT ACOLOLA

FRANKLIN COLLADO

AMORSOLO PAGATPATAN

ROBERTO AND NAOMI FUNTILA

AND ISAGUIRRE

REYNALDO ALEGRE

SHERWIN ECLARIN PENAFLOR

ALDRIN SACRAMENTO

TOTAL- 3RD QUARTER

500,000.00 312,431.00 435,035.00 395,081.00 17,819,339.14 2,225,421.40 1,425,969.00 1,650,455.36 1,363,575.00 500,000.00 803,381.00 627,806.24 637,521.77 500,000.00 500,000.00 618,108.81 659,780.42 500,000.00 978,530.00 372,052.94 350,984.75 375,000.00 351,931.65 373,485.00 339,775.25 269,381.58 375,000.00 15,798,160.17 7,500.00 23,317.46 "N-97" "U" 4,686.47 10,609.15 "N-91" "U" 6,525.53 1,546.49 "N-92" "U" 5,926.22 "N-107" "U" 633,699.88 5,555,376.79 111,271.07 1,225,260.84 "N-117" "U" 42,779.07 596,064.58 "N-119" "U" 49,513.66 467,446.68 "N-113" "U" 40,907.25 354,105.28 "N-118" "U" 7,500.00 189,064.43 "N-110" "U" 24,101.43 172,446.70 "N-108" "U" 18,834.19 101,400.55 "N-116" "U" 19,125.65 55,236.20 "N-126" "U" 7,500.00 54,992.85 "N-112" "U" 7,500.00 45,458.22 "N-121" "U" 18,543.17 43,139.44 "N-125" "U" 19,793.41 39,023.00 "N-115" "U" 7,500.00 38,594.61 "N-120" "U" 29,355.90 29,475.98 "N-122" "U" 5,580.79 23,656.74 "N-114" "U" 5,264.77 21,349.05 "N-127" "U" 5,625.00 20,389.92 "N-128" "U" 5,278.97 20,372.83 "N-123" "U" 5,602.28 15,822.22 "N-124" "U" 5,096.63 15,593.92 "N-111" "U" 4,040.72 15,293.09 "N-109" "U" 5,625.00 13,600.44 "N-129" "U" 446,338.96 3,557,787.57

LEONARDO YABUT

SPS. JEFFREY AND JOCELYN SUSON SPS. EDWIN AND MARGELYN CABANIG SPS. DARWIN AUGUST AND

MICHELLE PANGANIBAN

SPS. WINSTON AND GENOVEV A MATEO

LEONILA NARDO

ROMMEL AND MARIA ELENITA

lLANO SPS. RUFINO AND VERONICA SAMIO SPS. LEDEN AND LEA FLORES

ZENAIDA MOLINA

ERLINDA TAN

JOSE TUBALINAL JR.

SPS. N/R AND CHRISTOPHER PETER TIGAS

REBECCA DOLOT

ELBERT PACLIBAR

TOTAL- 4TH QUARTER

TOTAL 6,696,428.57 334,821.43 2,429,905.00 121,495.25 1,105,127.00 33,153.81 551,519.00 16,545.57 770,148.96 23,104.47 500,000.00 7,500.00 496,100.00 7,441.50 634,760.95 19,042.83 500,000.00 7,500.00 661,613.72 19,848.41 354,774.83 5,321.62 353,581.85 5,303.73 269,381.58 4,040.72 511,596.61 15,347.90 403,995.00 6,059.93 16,238,933.07 626,527.17 79,344,920.95 2,836,007.27

3. SUMMARY OF THE 2009 CWT- LAST COLLECTION OCCURRED IN 2009 supported with BIR Form 2307

GLENN TAN

1,306,396.00 39,191.88 SPS. FELIX AND RACHEL

MELENDREZ JR

1,200,000.00 36,000.00 SPS. SIMEON AND JUANITA BATARA 1,498,000.00 44,940.00 SPS. NOEL AND MARIBEL PRESILLAS 1,628,445.00 48,853.35

CORAZON CALIXTO

492,391.00 7,385.87 SPS. REYNALDO AND CELESTINA BALDONADO 500,000.00 7,500.00

SUSAN AND ROWENA DEL ROSARIO

ANDABAL 500,000.00 7,500.00 SPS. RAMIRO AND IMELDA ZUNIGA 104,929.00 1,573.94

RODOLFO NACASAS III

500,000.00 7,500.00 1,960,144.46 "N-135" "U" 1,309,419.29 "N-136" "U" 377,266.75 "N-141" "U" 192,016.91 "N-130" "U" 68,560.47 "N-131" "U" 65,448.55 "N-138" "U" 64,052.17 "N-137" "U" 61,141.13 "N-133" "U" 54,919.58 "N-142" "U" 54,550.96 "N-144" "U" 26,300.13 "N-139" "U" 26,144.82 "N-140" "U" 21,274.88 "N-134" "U" 7,778.77 "N-132" "U" 5,373.68 "N-143" "U" 4,294,392.55 22,258,349.31 "N-145" "N-146" "N-147" "N-148" "N-149" "N-150" "N-151" "N-152" "N-153"

AMALIA GUZMAN

MARY ANN DEL ROSARIO

KRISTINA DE LEON AND DENNIS

BELLA

JOE NINO CASIMIRO

SPS. ALAN AND RACELA YALO SPS. ROMULO AND ASUNCION PADITSR.

SPS. RENOIR AND BRIGIDA HUEVOS

ASUNCION TUGADO

JOERGE CHRISTOPHER BOBADILLA

BONA AND DANILO MAYPA

LORICAR MOLATO

TERESITA REYES

KG&INTERNATIONAL SERVICES, INC. KG&INTERNATIONAL SERVICES, INC.

TOTAL -1ST QUARTER

TIT A BILLONES

JEROLD SALVADOR

MERLYN ORTEGA

MARIA LYNETTE ORTIZ

SPS. DINDO AND ANGELICA DALUSONG

LARDIE/LOUISE IAN/LOIS ANDREW

BOLINAO SPS. JOEL AND MELJAIN MALLARI

LILIA BILBAO

SPS. REYNALDO AND HELEN ST A. MARIA NOELTANEO SPS. W/PAND RAZZELJOY AMBATA SPS. DANTE AND ROSARIO CRUZ SPS. GEORGE JR. AND KHRIZNA LAURIZAS 787,834.00 371,819.55 349,176.95 250,250.00 362,892.00 361,021.00 500,000.00 907,796.00 374,586.06 375,000.00 375,000.00 500,000.00 500,000.00 392,542.92 14,138,079.48 750,000.00 100A36.00 388,332.00 782,347.00 375,000.00 375,000.00 2,231,892.73 570,805.20 419,798.00 335,913.16 420,299.00 200,000.00 500,000.00 23,635.02 "N-154" 5,577.29 "N-155" 5,237.65 "N-156" 3,753.75 "N-157" 5A43.38 "N-158" 5A15.32 "N-159" 7,500.00 "N-160" 27,233.88 "N-161" 5,618.79 "N-162" 5,625.00 "N-163" 5,625.00 "N-164" 7,500.00 "N-165" 7,500.00 "N-166" 5,888.14 "N-167" 321,998.26 - 22,500.00 "N-168" 1,506.54 "N-169" 5,824.98 "N-170" 23A70.41 "N-171" 5,625.00 "N-172" 5,625.00 "N-173" 111,594.64 "N-174" 17,124.16 "N-175" 6,296.97 "N-176" 5,038.70 "N-177" 6,304.49 "N-178" 3,000.00 "N-179" 7,500.00 "N-180"

Cf A CASE NO. 8457

S~ . MANUELDOUGLASAND

ASUNCION LOLENG

TOTAL- 2ND QUARTER

S~. SHERWIN AND ANDREA ATUTUBO

ADELAIDA FRANCISCO

S~. DANILO AND BERNADETTE DE JESUS

ERNESTO AND ROSIE AZURIN AND

WARD S~. DOROTEO AND HELEN CRUZ S~. GREGORIO AND MARILYN ASTOR

ISABELIT A COST A

JOY MARIE OSAWA

VLECINA PAGHACIAN

JEROCEL SORIANO

EDNA AND KIM FERNANDEZ

FRANCISCO COLOMER

S~. ANTHONY AND CECILIA EISMA S~. GILBERT AND DELIA HERNANDEZ

HIYASMIN /ENRIQUE/MARCELINO

NUESTRO S~. VLADIMIR AND MARILYN GACAYAN

ANNIE OFELIA BUSTAMANTE

MA. CECIL Y AND RUSSELL ALLAN ANGELES/DIAZ

JOSE TRIBIANA

S~ . ROY AND ELMA QUIAMBAO S~. ROMULO AND RHODORA CARAMAT

TOTAL- 3RD QUARTER

S~ . EDWIN AND JUDITH ZABLAN

MARIA REYANN HEMEDES

ROWENA BULAKLAK

S~ . RONALDO AND CYNTHIA GAA 60,257.90 7,510,080.99 750,000.00 500,000.00 767,588.16 1,202,366.36 342,765.68 834,909.33 610,979.00 658,517.00 598,893.00 500,000.00 16,000.00 500,000.00 500,000.00 500,000.00 500,000.00 500,000.00 369,375.08 629,647.00 835,588.53 264,215.00 678,891.33 12,059,735.47 651,967.00 591,950.91 1,271,653.64 1,309,094.00 903.87 "N-181" 222,314.76 - 22,500.00 "N-182" 7,500.00 "N-183" 23,027.64 "N-184" 36,070.99 "N-185" 5,141.49 "N-186" 25,047.28 "N-187" 18,329.37 "N-188" 19,755.51 "N-189" 17,966.79 "N-190" 7,500.00 "N-191" 240.00 "N-192" 7,500.00 "N-193" 7,500.00 "N-194" 7,500.00 "N-195" 7,500.00 "N-196" 7,500.00 "N-197" 5,540.63 "N-198" 18,889.41 "N-199" 25,067.66 "N-200" 3,963.23 "N-201" 20,366.74 "N-202" 294,406.74 - 19,559.01 "N-203" 17,758.53 "N-204" 38,149.61 "N-205" "N-206"

PILAR GOBRIN

TERESITA DANCEL AND SPS. ROBERT

AND ANNA LIZA MANALILI

SPS. FORTUNATO,JR AND

CARMELIT A CLA V ANO

PRESCIOSO GILE

ZORAHAYDA PABA YO

SPS. EDWIN AND AMELIA CLEMENTE

ARLENE SOLLANO

SPS. GIL AND ROSABELLA MANUEL

ANNIT A NUEVA BECKMANN

SPS. ALEJANDRO JR. AND ASUNCION TURIANO SPS. CESAR AND JOSEPHINE PICHA Y

CARMEN RAMOS

AF REALTY AND DEVELOPMENT, INC.

TOTAL- 4TH QUARTER

TOTAL 39,272.82 1,069,858.18 32,095.75 668,001.11 20,040.03 627,806.24 18,834.19 622,994.75 18,689.84 375,000.00 5,625.00 357,442.80 5,361.64 615,014.03 18,450.42 1,490,285.45 44,708.56 500,000.00 7,500.00 375,000.00 5,625.00 375,000.00 5,625.00 375,000.00 5,625.00 4,364,800.00 109,120.00 15,640,868.11 412,040.40 - 49,348,764.05 1,250,760.16 -

4. SUMMARY OF THE 2009 CWT ON INSTALLMENT PAYMENT OF CORPORATIONS supported with BIR Form 2307 YOUNGJI INTERNATIONAL SCHOOL, INC.

5,872.24 293.61 1,054,401.18 ST. MARY'S SCHOOL OF NOV ALICHES, INC.

10,996.81 549.84 11,841.80 ST. MARY'S SCHOOL OF NOV ALICHES, INC.

5,636.25 281.81 11,841.80 YOUNGJI INTERNATIONAL SCHOOL, INC.

5,775.97 288.80 54,576.85 YOUNGJI INTERNATIONAL SCHOOL, INC.

5,681.29 284.06 54,576.85 ST. MARY'S SCHOOL OF NOV ALICHES, INC.

5,363.57 268.18 11,841.80

TOTAL -1ST QUARTER

39,326.13 1,966.30 1,199,080.28 YOUNGJI INTERNATIONAL SCHOOL, INC.

6,069.61 303.48 1,054,401.18 ST. MARY'S SCHOOL OF NOV ALICHES, INC.

11,748.47 587.42 11,841.80 YOUNGJI INTERNATIONAL SCHOOL, INC.

6,170.77 308.54 54,576.85 ST. MARY'S SCHOOL OF 5,730.19 11,841.80 "N-207" "N-208" "N-209" "N-210" "N-211" "N-212" "N-213" "N-214" "N-215" "N-216" "N-217" "N-218" "N-219" "N-220" "X" "N-221" "X" "N-222" "X" "N-223" "X" "N-224" "X" "N-225" "X" "N-226" "X" "N-227" "X" "N-228" "X" "N-229" "X"

NOV ALICHES, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

TOTAL- 2ND QUARTER

ST. MARY'S SCHOOL OF NOV ALICHES, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

ST. MARY'S SCHOOL OF NOV ALICHES, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

TOTAL- 3RD QUARTER

ST. MARY'S SCHOOL OF NOV ALICHES, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

OPEN MISSION IN THE PHILS. YOUNGJI INTERNATIONAL SCHOOL, INC.

YOUNGJI INTERNATIONAL SCHOOL, INC.

TOTAL- 4TH QUARTER

TOTAL 5,970.11 35,689.15 6,121.86 6,273.62 6,378.18 12,551.50 6,484.48 37,809.64 6,433.08 6,592.55 6,702.43 6,814.13 182,947.18 183,590.20 25,000.00 7,868.58 2,017.25 158,590.20 586,555.60 699,380.52

5. SUMMARY OF THE 2009 CWT- FROM HDMF ACCOUNTS supported with BIR Form 2307 SPS. PRIME AND ANNA PILAR CAGAS 686,550.00

TOTAL -1ST QUARTER

686,550.00 SPS. MABELLE AND JOHN PAINAGA 726,584.00

SANNY ANALISTA

698,000.00

TOTAL- 3RD QUARTER

1,424,584.00 286.51 298.51 1,054,401.18 "N-230" "X" 1,784.46 2,187,062.81 306.09 11,841.80 "N-231" "X" 313.68 54,576.85 "N-232" "X" 318.91 54,576.86 "N-233" "X" 627.58 12,815.35 "N-234" "X" 324.22 54,576.86 "N-235" "X" 1,890.48 188,387.72 321.65 12,815.35 "N-236" "X" 329.63 54,576.86 "N-237" "X" 335.12 54,576.86 "N-238" "X" 340.71 54,576.86 "N-239" "X" 5,488.42 148,058.24 "N-240" "X" 5,507.71 156,948.16 "N-241" "X" 750.00 150,663.31 "N-242" "X" 236.06 156,948.16 "N-243" "X" 60.52 148,058.24 "N-244" "X" 4,757.71 150,663.31 "N-245" "X" 18,127.53 1,087,885.35 23,768.77 4,662,416.16 20,596.50 "N-246" 20,596.50 - 21,797.52 "N-247" 20,940.00 "N-248" 42,737.52 -

Page 21 o£24

ULYSSES DEVANADERA

TOTAL- 4TH QUARTER

TOTAL 586,800.00 17,604.00 586,800.00 17,604.00 2,697,934.00 80,938.02

6. SUMMARY OF THE 2009 CWT- FULLY SETTLED IN YEAR 2010 supported with BIR Fonn 2307 SPS. MARLO AND MARY JANE VILLEGAS 2,498,800.00 124,940.00

TOTAL- 3RD QUARTER

2,498,800.00 124,940.00 SPS. CAROL AND REYNALDO BUAGAS 1,047,400.00 31,422.00

SHELY D' AGOSTINO

2,846,759.82 142,337.99

GENEVA ALMYR ROSARIO

700,607.00 21,018.21 SPS. LILIBETH AND CARLO JIMENEZ 2,014,915.45 100,745.77

EDISON SALCEDO

2,470,800.00 123,540.00 SPS. EMMANUEL AND RAQUEL BROCAL 1,550,443.00 46,513.29

TOTAL- 4TH QUARTER

10,630,925.27 465,577.26 TOTAL 13,129,725.27 590,517.26

GRAND TOTAL

p 296,344,363.22 Pl1,571,816.18 "N-249" - - 262,914.64 "N-250" 262,914.64 67,345.35 "N-251" 300,738.92 "N-254" 62,956.66 "N-255" 119,933.20 "N-256" 240,240.63 "N-252" 155,598.72 "N-253" 946,813.48 1,209,728.12 p 93,367,759.11 Thus, petitioner was able to satisfy the second requirement and established the fact of withholding in the amount of Pll,571,816.18. We now proceed to the determination of whether or not the income from which the subject taxes were withheld were included and reported by petitioner in its Annual ITR for the taxable year 2009. As indicated in the above table, the claimed creditable withholding taxes of Pll,571,816.18 were withheld from the income payments of P296,344,363.22 in 2009, from which petitioner was able to realize a gross profit of P93,367,759.11. On the other hand, petitioner, in its 2009 Annual ITR, reported the amount of Pl66,416,146.00 as its revenues from sale of goods/properties, interest and other income, to wit: JlfZ- "Z" "Z" "Z" "Z" "Z" "Z"

Sale of Goods/Properties Less: Sales Returns/Discounts Net Sales Interest Income Other Income

TOTAL INCOME

p 122,005,289.00 828,446.00 p 121,176,843.00 p 31,788,695.00 13,450,608.00 45,239,303.00 p 166,416,146.00 Evidently, there is discrepancy of P129,928,217.22 between the income payments shown per certificate vis-a-vis the income amounts per petitioner's 2009 Annual ITR, as shown below: Income per Certificates p 296,344,363.22 Income per 2009 Annual ITR 166,416,146.00 Discrepancy p 129,928,217.22 Petitioner did not present any other document or reconciliation to account for the discrepancy of P129,928,217.22. The schedule of the taxable gross profit for the year 200941 provided by petitioner is not entirely supported by detailed schedules and other supporting documents to corroborate its allegations. Suffice it to say that this Court could not give much credence to the self-serving schedule of taxable gross profit provided by petitioner for it can be contrived easily, especially considering that this is not supported by substantial evidence establishing the fact of its existence. Consequently, this Court cannot verify whether the income payments related to the claimed CWT indeed formed part of the income reported in its 2009 Annual ITR. Hence, petitioner failed to comply with the third requisite.

In the same vein, the Court is not bound by the findings of the ICP A. The report submitted by the ICP A is but a tool or guide to aid the Court in the resolution of the case. The determination of the merit or the probative value of such report is still within the province of the Court. In addition, the Court is free to adopt or disregard, completely or partially, the findings of the ICP A. It can even make its own audit and evaluation of the documents pertinent to the case presente~

Page 24 o£25

WE CONCUR:

a~ c . G.;Y-~~~ S2 .

JifANITO C. CASTANEDA, Cj'R. Associate Justice ~-/.~~J- AriELIArR. COTANGCO-MANALASTAS Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ~~~c.~~ Q JUANITO c. CASTANErfA,.JR. Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

Presiding Justice during the trial in order to intelligently resolve the conflict brought before it. 42 It bears stressing that a claimant has the burden of proof to establish the factual basis of his or her claim for tax credit or refund.43 Tax refunds are in the nature of tax exemptions. As such, they are regarded as in derogation of sovereign authority and to be construed strictissimi juris against the person or entity claiming the refund44• In view of the foregoing, this Honorable Court finds that petitioner failed to comply with the requirements set forth in the claim for refund or issuance of tax credit certificate in the amount of excess/ unutilized creditable withholding taxes more specifically, its failure to sufficiently establish that the income from which the subject taxes were withheld have been duly reported in its Annual ITR. Note that compliance with the three abovementioned requirements is imperative for the entitlement to the refund of excess creditable taxes withheld. Hence, for petitioner's failure to comply with the third requisite, this Honorable Court is constrained to deny the present claim.

WHEREFORE, the instant Petition for Review 1s hereby DENIED for insufficiency of evidence.