KALAYAAN ENGINEERING COMPANY INC., v. COMMISSIONER OF INTERNAL REVENUE

CTA Form No. 8 (For DCC) 11111111111111111111111111111111 11111 11111111111111111111 11111111111111111111111 22-000168-0085 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION CTA CASE N0.10839 KALAYAAN ENGINEERING COMPANY INC., Petitioner, -versus- NOTICE OF RESOLUTION COMMISSIONER OF INTERNAL REVENUE, Respondent. To: OFFICE OF THE SOLICITOR GENERAL 134 Amorsolo Street, Legazpi Village Makati City ATTY. ALBERT C. ARPON ATTY. CARL FITRI A. HUSSIN ATTY. JONELLE ELLINE A. MAGALONG Bureau of Internal Revenue - Revenue Region 8A 36th Floor, Legal Division, Export Bank Plaza Building 313 Sen. Gil Puyat Avenue comer Chino Roces Avenue Makati City HECHANOVA BUGAY VILCHEZ & ANDAYA-RACADIO Ground Floor, Salustiana D. Ty Tower 104 Paseo de Roxas Avenue 1229 Makati City GREETINGS: You are hereby notified by these presents that on March 18, 2026, a Resolution was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, March 23, 2026. ,..... Atty. Maria ~a F. Chan-Te Executiverrerkof Court III

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION KALAYAAN CTA CASE NO. 10839 ENGINEERING COMPANY INC. , Members: Petitioner, BACORRO-VILLENA, Acting Chairperson, and CUI-DAVID, JJ. -versus- Promulgated: COMMISSIONER OF ---------- INTERNAL REVENUE, J Pfl Respondent. MAR 1 8 2026 ' l/~ �=6~ X - - - - - - - - - - - - - - - - - - - - - - - - - - X RESOLUTION CUI-DAVID, J.: At bar is petitioner's Partial Motion for Reconsideration1 filed on November 27, 2025, with respondent's Comment/ Opposition (To Petitioner's Motion for Partial Reconsiderationp which was b elatedly filed on January 12, 2026, assailing the Court's Decision dated October 29, 2025.3 The dispositive portion of the assailed Decision reads: WHEREFORE, in ligh t of the foregoing considerations, th e present Petitionfor Review is PARTIALLY GRANTED. Accordingly, the compromise pena lty in the amount of P20,000.00, imposed for the alleged failure of petitioner to file Documentary Sta mp Tax, and the deficiency assessment for Withholding Tax on Compensation for taxable year 2016, are CANCELLED and SET ASIDE. Docket. Vol. III. unpaged. /d. 3 /d. at 996-1036.

RESOLUTION CTA Case No. 10839 Kalayaan Engineering Company Inc. v. Commissioner of Internal Revenue X------ ------ -------------------- -------- --- -----------------------------------------------X However, the deficiency assessment s for Income Tax, Value-Added Tax, Expanded Withholding Tax, and Documenta ry Sta mp Tax for TY 2016 are UPHELD WITH MODIFICATIONS. Accordingly, petitioner is hereby ORDERED TO PAY respondent the total amount of P16,860,345.72 , representing deficiency taxes, inclusive of surch a rge and interest, broken down as follows: Tax Type Basic Deficiency Sur charge Interest Total Income Tax P9,799,335.29 P2,449,833.82 VAT 80,372.30 P3,472,99 1.82 P1 5,722, 160.93 EWT 369,764 .77 20,093.08 DST 237,752.95 92,441.19 32,096.07 132,561.4 5 Total 59,438 .24 P1 0,487,225.31 P2 ,621 ,806 .33 148,675.83 6 10,88 1.79 97,550.36 394,741.55 P3 ,751,3 14.08 Pl6,860,345.72 In addition, petitioner is ORDERED TO PAY responden t delinquency interest at the rate of 12% p er annum on the total amoun t due of P16,860,345.72 reckoned from October 11 , 2019 until full payment, equivalent to P5,543.13 per day, pursuant to Section 249(C) of t h e NIRC of 1997, as amended by TRAIN Law and implemented by RR No. 21 -2018 . Finally , pursuant to Section 13 of RA No. 9282, and considering that this Decision is partly favorable to the national government, t he BIR, through respondent, is hereby au t horized to enforce collection through distraint and levy upon petitioner's goods, ch attels, effects, persona l property (including stocks, securities, debts, credits, bank accounts, and oth er interests), and/ or real property, in sufficient quantity to satisfy the tax lia bility a nd a ny incremen ts due to d e li n q ue n c y . SO ORDERED. In t h e Motion, petitioner argues th at it is not liable for deficiency in come tax (IT), expanded with holding tax (EWT) , and d ocumentary stamp tax (D ST). In essence, petitioner alleges th at: 1. The amount of P29 ,040,527.07, which it received du ring th e taxable year, does not constitute unreported revenues or undeclared income for income tax purposes, as it r epresents sales already reported in previous years; 2 . Acknowledgment receipts are not mere vouchers and are sufficient to substantiate its expenses;

RESOLUTION CTA Case No. 10839 Kalayaan Engineering Company Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------------x 3. The submitted BIR Form 2307 for the first quarter of 20 17 pertains to income earned or received in taxable year 2016; 4. Excess tax credits carried over to succeeding taxable years should not be disallowed as they are beyond the scope of the current year's Letter of Authority (LOA); 5. The unutilized creditable withholding tax (CWT) may be applied to settle deficiency income tax liabilities in the current year; 6. The alleged unwithheld taxes on rental payments in the amount of P631,755.60 had already been withheld and remitted in prior periods; 7. The alleged unwithheld taxes on payments for professional fees in the amount of P366,002.40 were paid to professional partnerships, which are not subject to income tax; 8 . The alleged unwithheld taxes on payments for the purchase of goods in the amount ofP30,157,675.16 had already been paid and remitted in the preceding period, as the goods were sourced from inventory; 9. The P630,000.00 rent to its affiliate is not a loan but a financial disclosure requirement, and is therefore not subject to DST; 10. The DST on amounts due to financial institutions had already been withheld by the pertinent bank; and, 11 . The advance to its affiliate, Chillex International Phils. Inc., is not subject to DST since it is not substantiated. Thus, petitioner prays for the cancellation of the subject deficiency assessments. In the Comment/ Opposition, respondent contends that the instant Motion is merely a reiteration and amplification of the same arguments raised in petitioner's Petition for Review, all of

RESOLUTION CTA Case No. 10839 Kalayaan En gineerin g Company Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------------x which were thoroughly evaluated and categorically resolved by the Court. Respondent asserts the settled rule that a motion for reconsideration is not a vehicle to relitigate matters already adjudged nor to revive arguments previously rejected. Petitioner's Partial Motion for Reconsideration is bereft of merit. Perusal of the Partial Motion for Reconsideration reveals that indeed the arguments raised therein have already been exhaustively considered, weighed, and resolved in the assailed Decision. It is well-settled that a motion for reconsideration containing a mere reiteration or rehash of grounds and arguments that have already been considered, weighed, passed upon, and resolved by the court before the decision is rendered does not need a new judicial determination. There is no necessity to rule again on these grounds, as doing so would be a useless formality of ritual involving a reiteration of the reasons rejecting the movant's arguments already set forth in the judgment.4 As the grounds relied upon by petitioner merely restate arguments already found unmeritorious by the Court, there is neither reason nor justification to set aside or modify the assailed Decision dated October 29 , 2025. WHEREFORE, premises consider e d , p e titioner 's Partial Motion for Reconsideration is DENIED for lack of m erit. SO ORDERED. LA~'ktw.v.b�Juir-lOAVID Associate Justice People v. Agacer, G.R. o. 177751. January 7. 20 13 [Per J. Del Casti ll o. Special First Division]. citing People v. Larraiiaga. 502 Phil. 23 1. 240 [Per Curiam, En Bane]: Mendo=a-Ong v. Hon. Sandiganbayan. G.R. os. 146368- 69. Oc10ber 18. 2004 [Per J. Quisumbing. Special Second Division]: Ortigas and Company Limited Parmership v. Judge Velasco. G.R. o. 109645. March 4. 1996 [Per C.J. arvasa. Third Division].

RESOLUTION CTA Case No. 10839 Kalayaan Engineering Company Inc. v. Commissioner of Internal Revenue x------ ------------- ----------------------------- --------- -- -- ------------- ----------------x ! CONCUR: