CTA Case No. 3694 (Decision)

.. ~UC OP 'OlE f'HILIP'P''"r. (OURT Of TAX .~rP.EALI � -~� CUY A. SORIANO CORPOR ATION (OTHERWISE KNOWN AS ANSCOR) Petitioner , - versus - C. T. A. CASE NO . 3694 COMMISSIONER OF IN TERNAL REVENUE , Respondent . X- - - - - - - - - - - - - X DECISION In its letter of May 9 , 1983 to respondent Com - missioner of Internal Revenue filing its claim for t ax credit of t h e s u m of ~1 , 190 , 861 . 95 rep r ese n ting alleged excess income tax payments made to settle income tax liabilities for 1981 , petitioner A. Soriano Corporation , ANSCOR for short , thro u gh counsel , states : In 1981 , ANSCOR filed its first qu arter i n come tax ret u rn on J u ne 1 , 1981 , showing a tax of ~ 876 , 561 . 00 . ANSCOR settled th~s as follows : Tax due ~ 8 7 6 , 56 1. 00 Withholding taxes on rental ~ 12 , 172 . 93 and others 864 , 388 .0 7 Company check g ~ z � .1 ~�1 .! QQ Total amo un t paid 58

DECISION - CTA CASE NO . 3694 - 2- It filed its second quarter income tax return on August 25, 1981 s howing a refundable income tax of 8981,326.12 because operations for said quarter resulted in a net loss of 8342 , 042 . 00 . Breakdown of the refundable income tax is as follows : First quarter payment 8864 , 388 . 07 Withholding taxes on rental 116 , 938 . 05 and others Refundable income tax ~2~! .1 ~f2.df In the third quarter, 1981 , ANSCOR filed its quarterly income tax return on November 27 , 1981 showing a refundable income tax of 81,000,979.63 because operations for said quarter resulted again in a net los s of 82,057,983.00. Breakdown of the refund able income tax is as follows : First quarter payment 8864,388.07 Withholding taxes on rehtal 136 , 591.56 and others Refundable income tax to date ~! .1 QQQ .1 2Z2!.2~ On April 15, 1982, ANSCOR filed its final income tax return for the year 1981, showi ng a net loss of 815,390,276.Un. Since the operations in 1981 resulted in a zero income tax liability and ANSCOR actually paid to your Office the total amou nt of 81,190,861.95 (consisting of actual payment in company check of 8864,388.07 a nd cumulative withholding taxes of 832 6 , 473 . 88) , it is entitled to a tax credit in 1981 in the said s um of 81,1 90 ,861.95. Thus , in its, petition for review filed with this Court on October 26, 1983 for the issuance of a tax credit memorandum for the s um of 81 , 190 , 861 . 95�involved herein, petitioner alleges: 1 . That it is a domestic corporation engaged in the business of managing other corporations , as 590

DECISION - CTA CASE NO. 3694 - 3- well as in the business of making investments in pro- � perty, per so nal and real . It has its offices at the ANSCOR Building , 8776 Paseo de Roxas, Makati, Metro Manila where it may 'be se rved with writs , notices , processes and other legal papers; 2 . That respondent i s the head of the Bureau of Internal Revenue with offi~es at the National Office Building , BIR, Diliman, Quezon City, where he may be served with summons, notices, writs , processes and other legal paper s ; 3 . That petitioner filed on time the required quarterly and annual incom e tax returns for the tax- a ble year 1981 , in all of which it reflected net loss except for the first quarter when it computed a tax due of E876,561 , which amount it paid in full on June 1, 1981 in cash , E864,388 . 07 and in withheld taxe s of El2,172 . 93 on rent a ls and other income; 4 . That the return for the second quarter of 1981 filed on August t5 , 1981 , showed a net operating loss, resulting in an accumulated refundable amount of E981,326 . 12 consisting of the cash payment of E864,388 . 07 mentioned in paragraph 3 abo ve and an accumulated withholding tax in the sum of Ell6 , 93a05 on rentals u~0v1-

DECISION - CTA CASE NO . 3694 - 4- and other income ; 5 . That the return for the third quarter of 1981 filed on November 27, 1981, showed a net loss in operations resulting in an accumulated refundable amount of 81 , 000 , 979 consisting of an accumulated withholding tax of 8136,591 . 56 on rentals and other income and the cash payment of 8864 , 388 . 07 mentioned in paragraph 3 above; 6 . That on April 15 , 1982, it filed its annual income tax return showing net loss and an accumulated refundable amount of 81,190,861 . 95 consisting of the cash payment of 8864 , 388 . 07 mentioned in paragraph 3 above and accumulated withholding tax of 8326,473 . 88 on rentals and other income; 7 . That petitioner filed with the respondent its claim for tax credit of the total amount of 81 , 190 , 861 . 95 on May 10, 1983, but respondent has not acted thereon until now . Hence, this ~ppeal . After petitioner has presented its evidence con- sisting . of Exhibits "A" to "G" inclusive , in support of its claim for tax credit, and the same were all admitted by the Co u rt , this case was submitted for

DECISION - CTA CASE NO . 3694 - 5- decision based on the pleadings and the CTA records. The records reveal that petitioner filed its first quarter income tax return for 1981 on Ju ne 1, 1981 showing a tax due th ereo n of ~87 6 , 561 .0 0 , which amo un t petitioner paid in full on June 1, 1981 in check of ~864,388.07 and in withheld tax es of ~12,172.93. (Exhs . A, A-1, B & C; pp . 15-17 , CTA records.) Peti - tioner filed its second quarter income tax return on August 25 , 1981 reflecting a net operating loss of E342,042.00 resulting in a refundable amo unt of ~ 981 , 326 .1 2 con s isting of cash payment of E864 , 388 . 07 and withholding taxes on rental and other incom e, of Ell6,938.05. (Ex h � D; p . 18 , CTA records.) In the third quar ter of 1981, petitioner ' s income tax return filed on Novembe r 27 , 1981 again showed a net loss of E2,057,983.00 effecting in a n accum ulat ed refundable amo un t of El 1 1100,979.63 consisting of the first quarter paymeht of E8 64 , 388.07 and withholding taxes on rental and ot h~r income of El36,591.56. (Exh . E ; p . 19, CTA records.) And the final income tax return filed by petitio ner on April 15, 1982 -for the year 1981 reflected a net lo ss of El5,390,276.00. (Exh . F; p. 20 , CTA records.) Since it appears that petitioner 59u

DECISION - CTA CASE NO. 3694 - 6- h ere paid the amount of ~864,388 . 07 and cumulative withholding taxes of ~326,473.88 , petitioner would be entitled to a tax credit in 1981 of ~1,190,861 . 95 . Respondent Commissioner of Internal Revenue does not question or dispute the correctness of the above- stated material facts; neither ha s he presented any evidence controverting the same . Against this back- drop, respondent posed no objectio n in having this case submitted for decision on the basis of the plead- ings and the evidence presented by petitioner . In the light of the facts stated above and the evidence presented, has petitioner A. Soria no Corpo- ration established a valid claim to the tax credit of excess income tax payments for the taxable year in question? Petitioner's position calls to mind Commonwealth Management and Service Corporation vs. Commissioner of Internal Revenue, CTA Cases Nos. 3383 and 3578, June 30, 1987, the factual setting of which is iden- tical with that of the case at bar, and where this Court, speaking through Judge Alex z. Reyes, disposed of the same question in clear and unequivocal terms, in the following wise:

DECISION - CTA CASE NO. 3694 - 7- The cases before Us hardly present a gripping question or require a tor- tured ratiocination . As thus shown the basis for the claims ore not short of specific s upport in terms of tractable data openly laid and fully disclosed . Going by the records, petitioner ' s in- come tax returns for the subject taxable years have s hown losses and excess income tax payments . Respondent points to no factual errors nor superfluities which need be abridged . Neither were there any deficiency assessments issued. XXX XXX xxx . We see no reason and none is vouch- safed why these simple cases where fact and fabrication are no longer indistinguish- able , sho uld remain curiously unperturbed . It may be necessary to repeat what this Court said in what so plainly apply to the cases at bar that, "But as should be expected , the action could be maintained on the basis of the pleadings, admission and affidavit of the parties which neither provokes any un settling questions nor involves material factual issues genuinely in dispula . Th e administrative machinery or process employed on the right to the claim seems to have moved barely at idling speed . To be relatively quiescent for some four (4) years on a claim of such a simple nature and not so considerable a stake which no long er incites controversy nor excites a queasy sense of expectation , creates b ut a n unw arranted bureaucratic inertia uf inaction. Readily a legal con- clusion can be safely reached . Petitioner or any simi l a rly circumstanced taxpayer for that matter deserves a measure of fair dealing in a more expeditious and compe- tently responsive action . (Commonwealth

DECISION - CTA CASE NO. 3694 - 8- Pacific Consultants, Ltd ., v . Commis- sioner of Internal Revenue, CTA ~ase No . 2953 , May 15 , 1982), 11 cited in Dataprep (Phils . ) Inc . v . Commissioner of Internal Revenue, CTA Case No . 3600 , March 30 , 1984; appeal withdrawn , G. R. L-67735 , September 12, 1984 . We find no cogent reason to depart from the conclusion reached in Commonwealth Management and Service Corporation , as expressed in the above - quoted opinion of the Court there , and the same should resolve the similnr problem now brought before Us in this proceeding. WHEREFORE , respondent is hereby ordered to issue a tax credit memorandum to petitioner for the sum of Bl,l90 , 861 . 95 to be used as payment for its internal revenue taxes . SO ORDERED . Quezon City , Metro Manila , November 2 , 1987 . AMANTE F Presiding Judge WE CONCUR : (on official leave) C0 NSTANTE C . RO AQUI N Associate Judge ~z~ ., Associate Judge 59 0