AYALA CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION AYALA CORPORATION, CTA CASE NO. 9024 Petitioner, Members: - versus - DEL ROSARIO, P.J., Chairperson, UY, and MINDARO-GRULLA, JJ. COMMISSIONER OF Promu lgated: I NTERNAL REVENUE, � "' , W\M�, '"" v ...'~lJ"\9 ; q;~"" Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X AMENDED DECISI \ MINDARO-GRULLA, J.: For resolution are the following: 1. respondent's Motion for Partial Reconsideration (re: Decision promulgated on 13 February 20 18 ), filed on March 6, 2018, with petitioner's Comment, filed on April 6, 2018; and 2. petitioner's Motion for Partial Reconsideration, filed on March 6, 2018, wit hout respondent's comment as per Records Verification dated April 17, 2018. Both parties seek reconsideration of this Court's Decision dated February 13, 2018, the dispositive portion of which reads: {.,

AMENDED DECISION CTA Case No. 9024 "WHEREFORE, premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is ORDERED TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the reduced amount of P81,723,674.43, representing petitioner's excess or unutilized creditable withholding taxes for calendar years 2012 and 2013. SO ORDERED." L Respondent's Motion for Partial Reconsideration In his motion, respondent argues that this Court erred in ruling that petitioner is entitled to a refund of unutilized excess creditable withholding tax (CWT) for calendar years (CYs) 2012 and 2013 in the reduced amount of P81,723,674.43, despite no evidence of actual remittance to the Bureau of Internal Revenue (BIR). Respondent contends that it is incumbent upon petitioner to discharge its burden of proving the fact of withholding of taxes and their subsequent remittance to the BIR. Respondent maintains that Revenue Regulation (RR) No. 2- 2006 is a valid regulation. Hence, proof of actual remittance of the taxes withheld to the BIR is indispensible in a claim for refund of excess CWTs. Respondent avers that petitioner failed to prove that the alleged withheld taxes came to the hands of BIR, thus, petitioner is not entitled to any refund. On the other hand, petitioner avers that the arguments raised by respondent are not new and novel. Petitioner states that this Court and the Supreme Court already held that proof of actual remittance is not a condition for granting a claim for refund of unutilized tax credits. Petitioner also stresses that it was compliant with RR No. 2-2006, which requires the mandatory submission of the Summary Alphalist of Withholding Agents of Income Payments Subjected to Creditable Withholding Taxes (SAWT) by the Payee/Income Recipient to all taxpayers claiming refund. The Court maintains its ruling that petitioner was able to comply with Section 2.58.3(8) of RR No. 2-98, which requires that: t.

AMENDED DECISION CfA Case No. 9024 "SEC. 2.58.3. Claim for Tax Credit or Refund- XXX XXX XXX (B) Claims for tax credit or refund of any creditable income tax which was deducted and withheld on income payments shall be given due course only when it is shown that the income payment has been declared as part of the gross income and the fact of withholding is established by a copy of the withholding tax statement duly issued by the payor to the payee showing the amount paid and the amount of tax withheld therefrom." (Emphasis supplied) In this case, petitioner was able to submit the Schedule of Creditable Taxes Withheld for the years 2012 and 2013 and the related Certificates of Creditable Tax Withheld at Source (BIR Form No. 2307). Commissioner of Internal Revenue vs. Asian Transmission Corporation, 1 is instructive: At any rate, the CIR is correct in stating that the taxpayer bears the burden of proof to establish not only that a refund is justified under the law but also that the amount that should be refunded is correct. In this case, however, the CTA-First Division and the CTA-En Bane uniformly found that from the evidence submitted, ATC has established its claim for refund or issuance of a tax credit certificate for unutilized creditable withholding taxes for the taxable year 2001 in the amount of P27,325,856.58. The Court finds no cogent reason to rule differently. As correctly noted by the CTA-En Bane: x x x proof of actual remittance by the respondent is not needed in order to prove withholding and remittance of taxes to petitioner. Section 2.58.3 (B) of Revenue Regulation No. 2-98 clearly provides that 1 G.R. No. 179617, January 19, 2011. l

AMENDED DECISION CTA Case No. 9024 proof of remittance is the responsibility of the withholding agent and not of the taxpayer- refund claimant. It should be borne in mind by the petitioner that payors of withholding taxes are by themselves constituted as withholding agents of the BIR. The taxes they withhold are held in trust for the government. In the event that the withholding agents commit fraud against the government by not remitting the taxes so withheld, such act should not prejudice herein respondent who has been duly withheld taxes by the withholding agents acting under government authority. Moreover, pursuant to Section 57 and 58 of the NIRC of 1997, as amended, the withholding of income tax and the remittance thereof to the BIR is the responsibility of the payor and not the payee. Therefore, respondent, x x x has no control over the remittance of the taxes withheld from its income by the withholding agent or payor who is the agent of the petitioner. The Certificates of Creditable Tax Withheld at Source issued by the withholding agents of the government are prima facie proof of actual payment by herein respondent-payee to the government itself through said agents. XXX Thus, the certificate of creditable tax withheld at source is the competent proof to establish the fact that taxes are withheld.2 IL Petitioner's Motion for Partial Reconsideration Petitioner raises the following grounds in support of its motion for partial reconsideration: I. The Court erred in disallowing a portion of the claim for tax credit certificate in the total amount of P46,414,695.77 on the ground that the income payments per Summary of Certificates of Creditable 2 Commissioner of Internal Revenue vs. Philippine National Bank, G.R. No. 180290, September 29, 2014. t..

AMENDED DECISION CTA Case No. 9024 Taxes Withheld (BIR Form No. 2307) do not tally with the income indicated in the Summaries of Rental Income, Directors' Fees, Other Income, Proceeds From Sale-Land and Other Various Accounts for CYs 2012 and 2013. II. The Court erred in not taking into account the findings made by the Independent Certified Public Accountant (ICPA) as found in the !CPA Report which can fully explain the apparent discrepancy between the income payments per Summary of Certificates of Creditable Taxes Withheld as against the income indicated in the Summaries of Rental Income, Directors' Fees, Other Income, Proceeds from Sale-Land and Other Various Accounts totaling to P46,414,695.77. III. The summary of explanations provides the necessary reconciliation showing that there are no discrepancies between income payments per Summary of Certificates of Creditable Taxes Withheld as against the income indicated in the Summaries of Rental Income, Directors' Fees, Other Income, Proceeds from Sale- Land and Other Various Accounts. Petitioner assails the findings of this Court with respect to the disallowance of a portion of petitioner's claim for tax credit certificate {TCC) in the total amount of P46,414,695.77. In order to assail such findings, petitioner prepared a detailed list of explanations for some items of disallowance with cross references to relevant documentary exhibits, attached to petitioner's motion as Annex "A" for the Court's consideration. To address the concerns of this Court's findings of lack of sufficient proof, the ICPA also attached the copies of the relevant General Journals/Journal Vouchers, Customer Invoices and Treasury Documents which are the source documents for each transaction. In this connection, petitioner moved to allow the ICPA to testify on the execution of her Judicial Affidavit attached to its Motion for Partial Reconsideration and identify the relevant supporting documents attached thereto and to set the case for hearing for reception of its evidence. {,

AMENDED DECISION erA case No. 9024 In the Resolution3 dated May 24, 2018, the Court granted the recall of the ICPA for a hearing on July 10, 2018 for the above-stated purpose. Meanwhile, the resolution of petitioner's Motion for Partial Reconsideration and respondent's Motion for Partial Reconsideration (re: Decision promulgated on 13 February 2018) was held in abeyance. The hearing proceeded as scheduled and petitioner was ordered to submit its Formal Offer of Evidence. Accordingly, petitioner filed its Formal Offer of Additional Evidence on August 14, 2018. In the Resolution dated October 10, 2018, the Court admitted petitioner's additional evidence but noted some discrepancies between the documents described in the Summary of Explanations, the printed documents and the scanned documents submitted by petitioner. On November 7, 2018, petitioner filed a Manifestation and Motion to correct the document reference number in the Summary of Explanations and to submit the correct printed and scanned copy of documents to conform with testimonial and documentary evidence offered during the trial. The same was noted and granted by the Court in the Resolution dated December 12, 2018. Hence, we now resolve petitioner's motion. Petitioner seeks for the reconsideration of its claimed CWTs amounting to P46,414,695.77 which was disallowed for issuance of TCC since the corresponding income payments amounting to P448,708,926.10 per the Summary of Certificate of Creditable Taxes Withheld Supported by Original Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) Issued by the Payor in the Petitioner's Name for CYs 2012 and 2013 cannot be traced or differed with the income amounts indicated in the Summaries4 of Rental Income, Directors' Fees, Other Income, Proceeds from Sale - Land and Others-Various Accounts. The Court found that some items with discrepancy were accounted for by petitioner but failed to submit proof (i.e., journal entries traced to subsidiary and general ledgers) to support such; while other discrepancies remained unaccounted. Thus, the Court held that it cannot ascertain whether said income payments pertain to one and the same transactions. 3 Docket, pp. 741 to 746. 4 Exhibits P-23 to P-31. L

AMENDED DECISION CTA Case No. 9024 However, the Court found that, out of the total disallowances of P46,414,695.77 being sought for reconsideration, petitioner accounted only the amount of P46,342,779.34 with corresponding income payments amounting to P444,991,196.86 by presenting a Summary of Explanations per CTA Disallowances5 (Summary) together with the relevant General Journals/Journal Vouchers, Customer Invoices and Treasury Documents6 which were checked and validated by the Court-commissioned ICPA. The Summary shows the details of the amount of disallowances accounted for as follows: Period Amount of Income Amount of Taxes Payment Withheld Exh. No. Covered Payor 2012 Honda Cars Makati, Inc. Honda Cars Makati Inc. Rental Income P-20-11 1st Quarter p 5,554,880.50 p 277,744.03 P-20-12 1st Quarter 1 380 070.32 69 003.52 P-20-14 1st Quarter Honda Cars Makati Inc. 4 358 590.98 217 929.55 P-20-30 to 32 Isuzu Automotive Dealership, 1 675 772.80 83 788.64 3rd Quarter Inc. - Alabanq Branch P-20-36 Isuzu Cebu, Inc. - Mandaue , , 974,459.20 48 722.96 4th Quarter Branch 13,943,773.80 697.188.70 Subtotal Directors' Fees Ayala Land Inc. , , 9,S~_ooo.oo 1,425,000.00 1st to 4th P-20-60 to 95 Quarter Other income P-20-176 to 178 4th Quarter Bank of the Philippine Islands p 36 581 296.78 3 721 625.94 December P-20-180 2012 BPI Family Savings Bank Inc. 3 003 307.94 60 066.16 580 473.34 11,609.47 P-20-187 to 2nd to 4th Globe Telecoms Inc. 5 440,536.93 189 . Quarter 36,703 579.53 P-20-193 to 2nd to 4th 199 Quarter Integrated Microelectronics Inc 17,428,648.88 2,614,135.91 P-20-207 and 2nd P-20-152 Quarter Manila Water Company 28 171 420.36 4 225 713.05 P-20-208 to 3rd to 4th , , 27 077 458.47 149, 546.185.30 213 Quarter Manila Water Company 4 061 618.77 20,135.306.23 Subtotal Proceeds from Sale of Land ,, , 126. 785.270.00 P-20-244 December , 299,775.229.10 7. 607.116.20 2012 Amaia Land Corp. 29,864,611.13 Total-2012 .l!lll p 9,392,972.13 p 469,648.61 Rental Income P-20-251 I 1st Quarter Honda Cars Alabang 5 Exhibit P-58-2, Docket, pp. 596 to 606. 6 Exhibits P-23-1-1 to P-23-1-10, P-23-1-11 to P-23-1-12, P-25-1-1 to P-25-1-5, P-25-1-6, P-25- 1-7 to P-25-1-10, P-25-1-11 to P-25-1-16, P-25-1-17 to P-25-1-18, P-26-1-1, P-28-1-1 to P-28- 1-9, P-28-1-10 to P-28-1-16, P-28-1-17 to P-28-1-35, P-28-1-36, P-29-1-1 to P-29-1-2, P-30-1- 1 to P-30-1-5, P-30-1-6, P-30-1-7 to P-30-1-9, P-30-1-10, P-30-1-11, P-30-1-12 to P-30-1-15, P-31-2-1 to P-31-2-2 and P-58-3. l..

AMENDED DECISION CTA Case No. 9024 P-20-254 August Honda Cars Global City 2 563 056.02 128 152.80 2013 Honda Cars Makat1_Inc. 7 089 043.00 354 452.15 P-20-255 1st_Quarter P-20-257 to Honda Cars Makati Inc. 14 787 192.58 739 359.64 258 and P-20- 3rd Quarter Honda Cars Makati Inc. 11 825 274.18 591 263.70 260 4th Quarter Isuzu Cebu Inc. - Mandaue P-20-261 to Branch 262 and P-20- Subtotal 264 ALFM Peso Bond Fund Inc. P-20-279 1st Quarter ALFM Dollar Bond Fund Inc. 1 324 898.20 66 244.91 Subtotal I* 46,982,436.U I* 2,349,222.82 Directors' Fees P-20-293 3rd Quarter 30 000.00 4,500.00 P-20-301 3rd Quarter 10 000.00 1 500.00 I* 40000.00 I* 6.000.00 Other Income 2nd and Bank of the Philippine Islands 30 629 127.19 4 317,582.54 P-20-442 to 4th Quarter 446 December BPI Family Savinqs Bank Inc. 3,534 260.42 70,685.21 Globe Telecom, Inc. 210 715.00 4,214.30 P-20-447 2013 P-20-456 to 2nd to 4th HR Mall Inc. 36,268,339.00 5,440,250.85 Quarter Integrated Microelectronics, Inc. 458 December 8,190 449.00 1 228,567.35 Integrated Microelectronics Inc. 134 465.00 20,319.75 P-20-465 2013 P-20-470 1st Quarter Subtotal 16,076 176.00 2 411,426.40 P-20-473 to 4th Quarter 475 p 95,043,532.62 p 23,493,046.40 Others - Various Accounts P-20-509 to 511 1st Quarter BPI Rental Corporation 3,150,000.00 630,000.00 Subtotal p 3. 250 000.00 p 630.000.00 Total-2023 I* 11245,225. 967.72 p 1*26.478,268.22 - - - - - - Total - 2012 and 2013------ P _P~19_91,l,96~82 p- 1"4_6,3~2,~79.34 Considering that petitioner failed to account for the following disallowed ONTs of P71,916.43 (P46,414,695.77 less P46,342,779.34) with corresponding income payments of P3,717,729.28, the disallowance thereof still stands: Exh. No. Period Payor Amount of Amount of 2012 Covered Income Taxes Payment Rental Income Jun-12 Withheld P-20-40 May-12 ,. Integrated Microelectronics Inc. ,. 20 000.00 1 000.00 Other income Aug-12 P-20-174 Subtotal p 2~000.00 p ~000.00 P-20-184 Bank of the Philippine Islands ,. ,. 448.00 22 400.00 Dataone Asia (Philippines) Inc. 100,000.00 2,000.00 (.,

AMENDED DECISION CTA Case No. 9024 P-20-200 to P-20- 1st and 3rd Integreon Managed Solutions 167 533.30 312.50 201 Quarter (Philippines) Inc. May-12 Liveit Investments Limited - 3 200.00 64.00 P-20-203 Philippine Regional Operating 1st Quarter Headquarters 25 000.00 500.00 P-20-227 Stream International Global Services Philij)Qines Subtotal ,. ,. 3~8.~33.30 3,324.50 others - Various Accounts P-20-5 to 2nd to 4th Honda Cars Alabang fO 554 481.76 fO 11,089.64 P-20-7 Quarter Honda Cars Makati, Inc. P-20-14 and P-20- 1st to 4th Honda Cars Pasig (A Branch of 695,313.69 13 906.27 238 to P-20-242 Quarter Honda Cars Makati Inc.) 2nd to 4th 472 586.99 9 451.73 P-20-18 to P-20-20 Quarter Subtotal ,. �2~382.44 ,. 34447.64 Total-20~2 ,. 2,060,5~5.74 ,. 38,772.U 20~3 Other Income P-20-460 4th Quarter Honda Cars Makati, Inc. p 219,780.00 p 4 395.60 Subtotal , , 2~9,780.00 4,395.60 others - Various Accounts P-20-251 to P-20- 1st to 2nd Honda Cars Alabanq p 306 459.13 p 6 129.19 252 _Quarter Honda Cars Makati, Inc. P-20-512 to P-20- 1st to 4th Honda Cars Pasig (A Branch of 882,367.49 17,647.36 519 Quarter Honda Cars Makati Inc.) P-20-265 to P-20- 1st to 2nd Subtotal 248 606.92 4 972.14 266 Quarter , ~,437. 433.54 , 28,748.69 Total-20~3 , ~.657,2~3.54 , 33. ~44.29 Grand Total - 2012 and , 3,717,729.28 , 71,916.43 2013 Now, after examining the Summary submitted by petitioner and scrutinizing the additional pieces of evidence submitted, as well as revisiting the evidence previously offered and admitted during trial, the Court finds merit in reconsidering the CWTs amounting to P45,568,802.77 previously disallowed in the assailed Decision. Petitioner sufficiently reconciled and accounted the differences found in the corresponding income payments amounting to P438,486,952.46, and thus proves that each pertain to one and the same transactions. However, the disallowance of the following CWTs amounting to (P46,342,779.34 less P45,568,802.77) P773,976.57 with L

AMENDED DECISION CTA Case No. 9024 corresponding income payments amounting to P6,504,244.36 shall remain, to wit: Exh. No. Period Covered Payor Amount of Amount of Taxes Income Payment Withheld 2022- Other income , 580,473.34 , 22,609.47 P-20-187 to 189 2nd to 4th Quarter Globe Telecoms Inc. 2023 Rental Income P-20-254 August 2013 Honda cars Global City , 2,56~056.02 128,252.80 Globe Telecom, Inc. 220,725.00 4,214.30 Other Income 3,250,000.00 630,000.00 P-20-456 to 458 2nd to 4th Quarter , 5,92~772.02 , 762,367.20 '" 6,504,244.36 '" 773,976.57 Others - Various Accounts P-20-509 to 511 1st Quarter BPI Rental Corporation Tota/-2023 Total - 2012 and 2013 1.) Other Income from Globe Telecoms Inc. - P58G_473.34 The total income payments previously found as unreconciled for this particular transaction amounted to P37,284,052.87, broken down as follows: Period Income Tax Covered Income Payment Withheld 2nd Quarter 3rd Quarter p 580,473.34 p 11,609.47 4th Quarter 500,000.00 1o,ooo.oo I Total 36,203,579.53 5,430 536.93 I p 37,284,052.87 p 5,452,146.40 Petitioner explained in the present motion the differences found for the income payments amounting to PSOO,OOO.OO and P36,203,579.53, but failed to do so for the income payment amounting to P580,473.34. As laid down in the Summary (p.4), a comparison of income payment per BIR Form No. 2307 with that recorded in petitioner's books reveals a difference of P2,115.95: Exh. No. Description Amount p 582,589.29 P-25-1 Per books/GL P-20-187 Less: Per summarv of CWTs 580 473.34 Difference p 2,115.95

AMENDED DECISION CTA Case No. 9024 The amount of P2,115.95 allegedly pertains to foreign exchange (FX) loss resulting from the difference between the FX rate used at transaction date and FX rate used at collection date. Petitioner submitted Journal Entry (JE) Ref. No. 4100000525 dated 07/31/20127 to show how the above transaction was recorded but the Court did not find any FX loss in said entry. Further, the amount of P580,473.34 cannot be traced to petitioner's Bank Statement.8 As such, the Court cannot ascertain that the P580,473.34 pertains to the subsequent collection for the income entry per JE Ref. No. 4100000525. Verily, our finding that the income payment per BIR Form No. 2307 amounting to P580,473.34 is not the same as the income recognized in petitioner's books amounting to P582,589.29 will still stand. Hence, the Court affirms the disallowance of the corresponding CWTs amounting to P11,609.47. 2.) Rental Income from Honda Cars Global City {Honda) - P~56~056.02 As reflected in the Summary, a comparison of income payments per BIR Form No. 2307 with the income recorded in its books shows a discrepancy of P83,921.99 as follows: Exh. No. Doc. No. Postina Date Description Amount P-28-1 Per books/GL p 924 762.05 P-28-1-10 1 027 365.49 P-28-1-11 GJ 4100000254 4/30/2013 Rental for April 2013 694 850.47 P-28-1-12 (83,921.99) P-28-1-13 GJ 4100000323 5/31/2013 Renta I for May 2013 53,378.61 P-28-1-14 83 921.99 P-28-1-15 GJ 4100000439 6/30/2013 Rental for June 2013 (53 378.61} P-28-1-16 GJ 4100000510 7/31/2013 Rental for June 2013 -Adjustment p 2 646 978.01 p 2,563,056.02 P-20-254 GJ 4100000574 8/31/2013 Rental for June 2013 - 2nd Adjustment p (83 921.99] GJ 4100000576 8/31/2013 Rental for April 2013 - Adjustment Reversal Rental for June 2013 - 2nd Adjustment GI 5100000004 8/31/2013 Reversal Subtotal Honda Cars Global Citv - 3rd quarter rental Less: Per summary of ONTs I Difference I As stated by the ICPA, while the difference remains unaccounted by petitioner, it has no effect in petitioner's claim since equivalent CWT claimed by petitioner is based on the amount of 7 Exhibit P-25-1-7. 8 Exhibit P-33-237 (3/4). t.

AMENDED DECISION erA Case No. 9024 income payment per BIR Form No. 2307, which is lower than the amount recorded per books/GL.9 However, the Court is not amenable to the above !CPA's explanation. The fact that there is a difference between the income recognized in the books and the income payment declared in the BIR Form No. 2307 already gives rise to a question as to whether or not the two (2) differing amounts are one and the same, unless it is completely and properly reconciled by petitioner. For this transaction, petitioner attempted to account for the difference but failed to do it completely. Partial reconciliation does not warrant that the two transactions being compared are one and the same. Thus, petitioner still failed to dispose its burden of proof that the income payment amounting to P2,563,056.02 was accordingly declared as income for tax purposes. 3.) Other Income from Globe Telecoms Inc.- P210,715.00 The total income payments previously found as unreconciled for this particular transaction amounted to P36,479,054.00, which is broken down as follows: Period Income Tax Covered June 2013 Income Payment Withheld 4th Quarter Total p 210,715.00 p 4,214.30 36,268,339.00 5 440,250.85 p 36,479,054.00 p 5,444,465.15 Petitioner explained the differences found for the income payment of P36,268,339.00, but failed to do so for the income payment of P210,715.00. As presented in the Summary (p. 12), a comparison of income payment per BIR Form No. 2307 with the recorded income in petitioner's books shows a difference of P4,785.00: I Exh. No. I Descrip_tion Amount 9 Summary of Explanation per erA Disallowances, Exhibit P-58-2, Docket, p. 623. {

AMENDED DECISION CfA Case No. 9024 P-30-1 Per books/GL p 215 500.00 P-20-456 Less: Per summary of cwrs 210,715.00 Difference p 4,785.00 Again, the difference amounting to P4,785.00 allegedly pertains to FX loss resulting from the difference between the FX rate used at transaction date and FX rate used at collection date. Petitioner submitted JE Ref. No. 4100000340 dated 06/17/201310 to show how the above transaction was recorded but the Court did not find any FX loss in said entry. Further, the JE shows a simultaneous recording of collection and income recognition, as shown below: Account Name Dr. Cr. BPI FCDU SA#0898 210,909.85 Bank Charges . Inc. tax payable 280.15 4,310.00 215.500.00 ! Other income With this, the Court finds it incorrect that any FX loss will arise from the above transaction since there was no timing difference between the income recognition and the collection. Thus, petitioner's explanation, thru the ICPA, failed to convince this Court as to the proper and complete reconciliation of the transaction in question. Thus, for petitioner's failure to prove that the income payment per BIR Form No. 2307 amounting to P210,715.00 is the same as the income recognized in petitioner's books amounting to P215,500.00, the disallowance of the claimed CWTs of 1'4,214.30 shall remain. 4.) Others-Various Accounts from BPI Rental Corporation - P3,150, 000.00 A comparison of income payment per BIR Form No. 2307 with the recorded income in petitioner's books is presented in the Summary as follows: Exh. No. Description Amount P-31-2 Per books/GL Less: Per summary of CWTs ,. 3.150,999.96 P-20-509 Difference 3,150,000.00 p 999.96 1o Exhibit P-30-1-7. L

AMENDED DECISION erA case No. 9024 The difference allegedly pertains to reimbursement by petitioner to the payor that was included by the latter in its income payments per BIR Form No. 2307 .U Petitioner submitted JE Ref. No. 600018389 dated 01/22/201312 to show how the above transaction was recorded but the Court did not find any entry involving the reimbursement made. Neither did petitioner submit any other documents to show that the difference noted was actually a mere reimbursement. We reiterate that failure to completely and properly account for the difference noted between the two transactions involved sustains the doubt as to whether or not they are one and the same transaction. Verily, petitioner still failed to dispose its burden of proof that the income payment amounting to P3,150,000.00 was accordingly declared as income for tax purposes. Accordingly, and in compliance with the third requisite, out of the total amount of P128,138,370.20 CWTs which was properly supported with BIR Forms No. 2307, the amount of CWTs which shall be granted is increased to P127,292,477.20, from the amount of P81,723,674.43 previously granted in the assailed Decision, considering that this is the amount which corresponds to the income payments which were verified to have been included in petitioner's taxable gross income per its Annual Income Tax Returns for CYs 2012 and 2013, to wit: Claimed CWTs with valid BIR CY 2012 CY 2013 Total Forms No. 2307 Less: CWTs, the related income p 65,969,541.75 p 62,168,828.45 p 128,138,370.20 payments of which per Schedule 50,381.61 795,511.39 845,893.0013 of Creditable Taxes Withheld differ with the income payments P65,919,160.14 P61,373,317.06 P127,292,477.20 reflected in the Summaries of Rental Income, Directors' Fees, Other Income, Proceeds from Sale - Land and Others-Various Accounts Refundable Excess CWT WHEREFORE, in view of the foregoing, respondent's Motion for Partial Reconsideration (re: Decision promulgated on 13 11 Summary of Explanation per erA Disallowances, Exhibit P-58-2, Docket, p. 629. 12 Exhibit P-31-2-1. 13 The sum of P71,916.43 and P773,976.57. f_

AMENDED DECISION CTA Case No. 9024 February 2018) is DENIED while petitioner's Motion for Partial Reconsideration is PARTIALLY GRANTED. Accordingly, the dispositive portion of the Decision dated February 13, 2018 should be amended to read as follows: "WHEREFORE, premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is ORDERED TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the reduced amount of P127,292,477.20, representing petitioner's excess or unutilized creditable withholding taxes for calendar years 2012 and 2013. SO ORDERED." SO ORDERED. rr:u,t1:i.-:r-toNN�. . r:.,.J.L.. M'NStto-GRULLA Associate Justice WE CONCUR: / ROMAN G. DEL RbSARIO E~P.UY Presiding Justice Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Amended Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. Presiding Justice Chairperson, Special 1st Division