CTA Case No. 4365 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY JARDINE FLEMING <PHILS.), INC., Pttti1;ioner, versus C. T. A. CASE NO. 4365 _, COMMISSIONER OF INTERNAL REVENUE, )( - - - - - Respondent. - - - - )( D E C :J: S :J: CJ N This involves a claim fot" t"efund of allegedly ovet"pai d income tax fot" the taxable yeat" 1987, in the amount of P63,181.00 Ori March 15, 1988, petitioner, a duly authot"ized Phi lippine corporation, filed its Corpot"ate/ Partnership Annual Income Tax Return for taxable year 1987 <Exh. "E"; CTA Recot"ds, pp. 64-82), therein declaring a net loss in the amount of P322,168.00 and consequently , a tax due of "NIL" <Exh. "E-3"; CTA Recot"ds, p. 64). Said return likewise shows a refundable amount of P63, 181.00. due petitioner, which amount was computed thus: 687

~�� DECISION CTA CASE NO. 436S - 2- Tax due on 1987 income P 0.00 Less: Cash payment made ~~04.00 to BIR on May 29, 1987, covered by Confirmation <P 43,204.00) Receipt No. B-10600861 19,977.00 and BIR Payment Order No. C-0404878 <Exhs. "B" <P 63, 181.00) and "B-1", respective 1 y; CTA Recorps, p. 61> 1987 income tax payable as ~f date of filing of ~ consolidated retu~n Less:Tax withheld on advisory fees Total amount due for 1987 (refundable> A claim for refund of said amount �of P63, 1.81.00 was made by petitionet~ in a letter, dated ,I December 13, 1988, and received by the BIR on De cember 19, 1988 <Annex "E", Petition For Review; CTA Records, pp. 24-25>, addt~essed to the Chief of the BIR's Appellate Division. As respondent has not yet . acted on petitioner�' s claim for refund, the instant petition for review was filed with this Court on May 25, 1989, in order to toll the two-year prescriptive period provided for by \ the Tax Code. It is apparent from respondent's memorandum that petitioner's claim for refund of the amount of P43, 204. 00, which represents the tax pay111ent made .by petitioner on May 29, 1987 <evidenced by Confirmation Receipt No. B-10600861 and BIR Payment Order No . C-0404878) is not being questioned. This is 688

DECISION CTA CASE NO. 4365 - 3- cle.:u~ ly shown by the two grounds laid down in said memorandum to negate petitioner�s entitlement to the t~e fund sought. These grounds, which both relate solely to the tax withheld at source from advisory fees paid to petitioner, are that: I L Statements and cert:i,'.ficates of tax withheld presented and offered by petitioner as proof of withholding are not conclusive evidence of payment and remittance to the Bureau of Internal Revenue <"Memot~andum For The Respondent", p. 3; CTA Records, p. 1.40) ; and 2. There is no showing that the income from which taxes were withheld was declared as pat~t of _, petitioner's gross income tax return <"Memorandum For The Respondent", p. 7; CTA Records, p. 144). Even at this early juncture, therefot~e, the ' Cout~ t finds that the claim fat"' refund of 1=>43, 204.00 is valid and allowable. This conclusion is based not only on the fact that respondent admitted that petitioner had a tax dLie of "NIL" in 1987 and had paid the amount of 1=>43, 204. 00 on May 29, 1987; but also on the fact that sufficient evidence, in the form of Confirmation Receipt No. B-10600861 and Payment Order No. C-0404878, was submitted to pet~ suade Us of petitioner's entitlement to said amount. 689

DECISION CTA CASE NO. 436~ - 4- The issue thus presented to the Court for adjudication is whether or not petitioner's claim for refund of the remaining amo�.mt of P19, 977 �. 00, representing withholding tax at source from advis i ory _, I fees, i s proper. Anent the fit~st ground f.l.aised by respondent, as above-quoted, he argues that: "Here, private respondent (sic) never presented official or confirmation receipts to prove payments and remittance to the Bureau of Internal Revenue of those amounts indicated in each of the above- mentioned s tatements and cet~tificates of withholding taxes, amounting to a total of P31,736.70, thus casting reasonable doubt as to the veracity of the alleged payments or t~emittances to the Bureau of Internal Revenue by private respondent and its withholding agent. xxx" <"Memot~andum For Respondent", p. 4; CTA Records, p. 141> With t~espect to his second ground, respondent stated thu s: "The income tax return of petitionet~ fot~ 1987 do (sic> not show that its income from which taxes were withheld was included as pat~t of �. its gt~ oss income . On the cont rary, the evidence shows that it under- declat~ed its gross income. During the yeat~ i nvolved, petitioner declared gt~oss income of P399,546.00, while it actually received inco me of P634,734.00. "Since petitioner failed to comply with the req�.lit~ement that the income from which the taxes were withheld shall be declared as part of the gross in co me in the inc ome tax ret ttt~n, it i s not en t it 1 e d t o the refund of the amount sought to be t~e funded." ("Memorandum For The Respondent", p. 8; CTA Recot~ds, p. 145> 690

_, DECISION CTA CASE NO. ~365 - 5- While We with petit i onet"" that Certificates/Statements of tax withheld at source issued by withholding agents are sufficient proof of such withholding, We find that the evidence submitted in the instant does not convince Us of f.' . petitioner's entitlement to the amount of withholding tax claimed for refund. The Com""t' s conclusion t""ests on the following factual findings: 1. The amounts . recot""ded as withheld in the Certificates of Creditable Income Tax Withheld At Sou t""c e <Ex h i bit s F 11 11 t o 11 J" , inc 1 us i v e ; CTA Records, pp. 83-87) are as follows: P1,720.30; P5,876.90; P5,133.80; P16,005.70; and P3,000.00. These amo�.tnt s total P31,736.70, which is not equal to the P19,977.00 being claimed fat"" refund in the instant petition. More importantly, the said P19,977.00 cannot be obtained from adding any two or more of the amounts stated in Exhibits "F" to " J 11 inclusive. , This reveals petitioner's failure in showing that Exhibits 11 F" to "J", incl�Jsive, evidence the withholding of the amount claimed fat"' refund in the instant petition; 2. Exhibits "A", 11 C", "D", and "E" show the following amounts declared by petitioner as the 691

_, ,. DEC I SION CTA CASE NO. 4 36S - 6- amount of taxes withheld and gross r espectively, for eac h quarter of 1987 : Amount of With- Income holding taxes Fi t' S t P15, 151.75 P308,702 .65 Second P1,1 38.65 p 29,737.56 Third p 54,442.85 Fo ut' th p 2, 591. 30 f4. p 6,662.92 p 1,095. 30 f Mea nwhil e , Exhibits "F" to "J", inclusive, state the following as the respective amounts of inc ome paym e nt s from which the creditable in c ome t axe s were withheld: f- xhibit Amount of Income Payment "F" "G" p 34,406 . 00 "H" P117, 538. 00 P102 ,676.00 "I" P320,11 4.00 "J" p 60,000 . 00 None of the amounts declared as withholding taxe s in Exhibits "F" to "J", inclusive, or an y c omb i n a tion thereof, equal any of the quarte r!y wit hholding taxes declared by petitioner in i t~ q ua r te rly and annual inco me tax returns; an d no ne of the a mo�.tnt s declared in Exhibits "F' " to J II II' inclusive, s s i neom or a ny combination t he t'eo f, eqLtal any of the amounts declared a s gross in co me for the four quarters of 1987 by petitioner in i t s Ex hibits� "A", 11 C", 11 0" and 11 E" . This reveals petitioner's failure in s h owing ) t h at E xhibits 11 F" to "J 11 , inclusive, singly or in .:my 692

DECISION CTA CASE NO. 4363 - 7- combination, correspond to any of the quarters of .' 1987; 3. By petitioner's own computation <Reply Memot'a ndum, pp. .4-6; CTA Records, pp. 153- 155), it actually received a total of P694,656.00 in 1987. It t, '. is then unquestionable that, if the amounts of income payments as stated and evidenced by Exhibits "F" to "J", i nc~usive, wet'e declat'ed as part of petitioner's income for 1987, that the total of sa id amounts should equal the computed actual receipt for 1987 <not e that as per the schedule attached to petit i onet'' s 1987 consolidated annual income tax , t'etut'n, petitionet''s entire income fo r the year came only in the form of various advisory fees [CTA Recot' ds, p. 65]). However, it is cleat' that: f- xhibit Amount of Income "F" Payment "G" "H" p 34,406.00 "I" P117,538.00 "J" P102 ,676.00 TOTAL P320, 114.00 p 60,000.00 P===6=3=4=�==7=3=_4 . sg / The foregoing factual finding ~ add up to the "F" to "J"' 1 Exhi bi ts 1{ following co n cl �.1sion s ; inclusive, do not evidence the withholding of the a mount of ~19,977.00 being claimed in the instant petition; and nowhere in the records is there evid e nce that the income from which the P19, 977.00 693

DECISION CTA CASE NO. 436S 8- cl a ime d withheld was declared by petitioner as pa ~--t of its 1987 gross income. Therefore, there being no pt"'oof of either the withholding of the amor.tnt of P19, 977.00 Ot"' of the de c lat"' ation in 1987 of the income from which it was 1 alle gedly withheld, the cannot allow petit i oner's claim for refr.tnd of this amount. WHEREFORE, the Court hereby grants the instant petition in part, and orders respondent Co11111issioner of Internal Revenue to refund to petitioner P43,204.00 or issue a tax credit in its na�e in the salle a111ount, representing overpaid i nco�e taxes for the year 1987. The Court hereby denies the petition in respect to the clai111 for refund in the a111ount of P19, 977. 00 in all egad 1y overpaid withholding taxes, for lack of evidence to prove that the said a11ount was actually withheld and that the inco11e fro� which the same was allegedly withheld was declared by petitioner as part of its taxable inco11e for the year 1987. No costs. SO ORDERED. Quezon City, Metro Manila, 1992. I 1e;.__k� RAMON D. DE VEY Associate Jud I 694

DECISION CTA CASE NO. 4365 - g- I CONCUR1 <{1~~ ERNESTO D. ACOSTA Presiding Judge lA: <on leave> MANUEL K. GRUBA Associate Judge CERTJ:FJ:CATJ:CJN I hereby certify that this decision was reached after due consul tat ion between the 111e11bers of the Court of TaK Appeals in accordance with Section 13, -� Article VIII of the Constitution. Q.~EZ.~ ERNESTO D. ACOSTA Presiding Judge Court of TaK Appeals 695