CTA Case No. 4688 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY PLANTERS PRODUCTS. INC�� C.T.A. CASE NO. 4688 �Petitioner; i - versus - I COftftiSSIOHER OF INTERNAL -X REVENUE. Respondent. ~- - - - - - -- - - D E C I S I CJ N This is a claim for the re�und o� unapplied withholding taxes for the taxable year 1989 amounting to a total of P78,381.78. Petitioner, a domestic corporation, owns several properties. which were leased to the �allowing entities in 1989 and which entities deducted withholding taxes due on the rentals: NABE OF LESSEE/ AiiOUHT OF ABOUHT 01 TA!X WITHHOLDIBG AGENT RENTALS WITHHELD Consumer's Grocery p 18,900.00 p 945.00 and Gen. tldsr. 91t725.00 4,586.25 Winco Enterprises 37,500.00 1,875.00 Negros Navigation Co. 48t975.00 2,448.75 Phil. Explbsives Corp �. 48,922.97 Phil. Explosives Corp. 918t720.00 489.23 Hemisphere-Leo Burnett 21;524.00 45,986.00 Ener-Ve.t Inc., 55,000.00 Onyx Agro Industrial 1, 076. 2()-' 2,750.00 520 .. ' ..,., '

DECISION - C.T.A. Case No. 4688 -2- HAllE OF LESSEE/ AIIOUNT OF AJIOUNT 01' TAX WITHHOLDING AGENT RENTALS WITHHELD Atlantic Gulf and Pacific 87;320.00 4,366.00 9,672.00 Sugar Regulatory Board 193,440.00 9,672.00 1.937.35 Maritime Phils. Port Sys. 193,440.00 P78, 381.78 Kakati Agro Trading; Inc. 193,735.00 T 0 T AL p 1, 760, 761.97 <Petition for Review p. 1) During the year 1989, petitioner incurred a loss amounting to P1;123,943.00 and hence, applied a claim for the refund of the withholding taxes in t.he amount. of P78,381.78 since it had no oc~asion t.o apply t.he same. t.o its income Liabilities beca~se of the incurred losses. On December 18, 1991, petitioner sent. a :follow-up letter regarding the claim for refund but. t.o no avt:iil ~ Hence, this petition for review. The issue on whether or not Petitioner is entitled to the amount of refund claimed is not. dif:ficult. to resolve as the records of the case reveal t.hat. it is indeed entitled to such refund.. In :fact._. t.he Respondent can neither defend nor prosecute her case so t.hat. We were constrained to declare her to have waived her righ't to present additional evidence. Said, We: "This Court has already considered respondent to have waived t.he right to presen~ additional evidence on January 20, 1994, dae to the many delays caused by her failure to prosecute t.he 521 �~

DECISION - C.T.A. Case Mo. 4688 -3- case. To show f�urther the inability of respondent. t.o prosecute her case on Karch 21, 1994 and April 11, 1994 respondent again failed to present her vit.ness causing further delay to the early disposition of t.his cas�. � Furthermore, since respondent failed t.o file her memorandum simultaneously with that of pet.it.ioner ��� and to this date she has not submitted her memorandum, this case is deemed submitted for decision on the basis of the records and the pleadings" (Resolution dated April 15, 1994, CTA records, p. 166) The records and pleadings of the case at. bar indubitably reveal that in taxable year 1989, Pet.itioner had no taxable income as defined under Section 27 of the National Internal Revenue Code <NIRC>. In fact., it incurred substantial losses �for that year amount.ing to P1;123,943.00 <Exh. "L") which remained uncontroverted by � the Respondent. There being no occasion t.o apply subject. withholding taxes to its income t.ax liabilities, petit.ioner should therefore be refunded of the rental taxes withheld by its lessees pursuant to Section e. of the Revenue Regulation on Expanded Withholding Tax No. e.- 85 which specifically provides, t.hus: Section 6. State.ent o� inco~ pay~~ �ade and taxes ffi thhe.ld. Every vit.hholding agent required to deduct and wit.hheld t.axes ;f, 522

DECISION - C. T. A. Case No. 4688 - 4- under these Regulations shall �urnish each recepient, in respect to his or its receipts during the calendar quarter or year a written statement <BIR Form 1743) showing the income or other payments made by the vithholding agent during such quarter or year, and the amount o� the tax deducted and withheld there�rom. Such statement <BIR Form 1743) shall be �urnished the corporate payee not later than the 20th day following the close of the quarter in which payment was made or not later than March 1 o� the following year in the case o� individual pay~e. However, upon request, the payor shall be obliged to furnished such statement to the payee simultaneous with the income payment. The amount so withheld shall be allowed as a tax credit against the income tax liability o� the payee in the taxable quarter or year in which income was earned or received. <Emphasis supplied>. The figures however, as presented by the Petitioner is not in accordance with the evidence on hand. Hence, the correct amount refundable should have been P78,95G.78 and not P?8,381.78 as evidenced on records, computed as follows: IAJIE OF LESSEE/ AJIOUIIT OF AJIOUIIT Of TAX VITHBOLDIIIG AGEIT REIITALS .,.., WITHHELD Consuaer's Grocery p 18,900.00 p 945.00 <Exh� and Gen. Kdsr. 91,725.00 50,000.00 4,586.25 <Exh. �o�> Winco Enterprises 97,897.00 918,720.00 2,500.00 <Exh. �c�> Hegros Navigation Co. 21,524.00 2,937.98 <Exh. �o�> 55;000.00 Phil. Explosives Corp. 87,320.00 45,936.00. <Exh. �E�> He�isphe~e-Leo Burnett 1,076.20 <Exh. �r� > 2,750.00 <Exh. �s�> Ener-Vet Inc., 4,366.00 <Exh. �u�. Onyx Agro Industrial �u-1� to �u-s�> Atlantic Gulf and Pacific 2, 250. 00 <Exh. �r�> Sugar Regulatory Board 45,000.00 9, 672. 00 <Exh. �J�) 11 937. 35 <Exh. �K�) Kariti11e Phils. Port Sys. 193,440.00 P781 956.78 Kakati Agro Trading, Inc. 193.735.00 TOTAL P11 1731 261.00 523 .. "

DECISION - C.T.A. Case No. 4688 - 5- However, since this amount did not represent the amount claimed in the Bureau of Internal Revenue, We are constrained to refund only what was originally claimed and contained in the Petition for Review. WHEREFORE, in all the foregoing the Respondent is hereby ORDERED to REFUND to the Petitioner the amount o1 P78,381.78 representing the unapplied withholding taxes. SO ORDERED. te Judget CERTIFICATION I hereby certify th~t this decision was reachetd ~fter due consultation among the members of the Court o1 Tax Appeals in accordance with Section 13, Articlet VIII of the Constitution. Q ..L;lQ.~ ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals 524