CTA Case No. 5126 (Decision)

REPUBLIC OF THE PHILiPPINES COURT OF TAX APPEALS QUEZON CITY HANTEX TRADING CO., INC., ... :; Petitioner, - versus - C.T.A. CASE NO. 5126 COMMISSIONER OF INTERNAL Promulgated: ~ REVENUE, ~ Respondent. _D_EC_1_1_19_97_-i::-j X -,"- - -------------- X DECISION The issue which is presented for our consideration is whether or not the assessments made by respondent against petitioner have valid and legal bases, thus making the latter liable to pay the former the amounts of ~13,414,226.40 and ~14,752,903.28, as deficiency income and sales taxes, respectively, plus interest that may accrue thereon until actual payment of the same. Petitioner is a registered general partnership duly organized and existing under the laws of the Philippines and is engaged in the importation of plastic prod~ts (p. 210, BIR records). Acting on a confidential information that the 1987 importations of the petitioner were understated in its accounting records, the agents of the Economic Intelligence and Investigation Bureau (EIIB) went to the business premises of the petitioner to conduct an investigation on its 1987 transactions pursuant to Mission Order No. 398-89, dated November 14, .I

DECISION - C.T.A. CASE NO. 5126 - 2- 1989. In their memorandum report (Exh. F), the EIIB agents reported that the herein petitioner could not be persuaded to open its books and records despite the authority given to them and since the herein petitioner becomes in a way hostile, they resorted to the best " evidence obtainable method under Section 16, NIRC. By using this method, there was found unreported sales in the amount of P63,032,989.17, thru non-recording by petitioner of some of its 1987 importations (purchases). The best evidence referred to by the agents of the EIIB were the different copies of consumption entries filed by the petitioner with the Bureau of Customs, marked as Annexes F-1 to F-68. In the same memorandum report, the EIIB agents declared that these entries were duly authenticated as having been processed and released after payment of the duties and taxes due thereon, by the Chief, Collection Division of Manila International ..., Container Port, dated August 7,, 1990, and the Acting Chief, Collection Division, Port of Manila, dated August 22, 1990. Duly certified copies of financial statements of the petitioner which was secured by the agents of the EIIB from the Securities and Exchange Commission were al.so used as its �evidence to determine the tax liabilities of petitioner. Thus, it was recommended to the Commissioner of EIIB that the Honorable Commissioner

DECISION - C.T.A. CASE NO. 5126 - 3- of the Bureau of Internal Revenue be apprised of the report and be requested to collect from the herein petitioner the following tax liabilities for 1987: , 35% for income tax P.22,061,S46.20 "SO% for fraud 11,030,773.10 40% delinquency interest 8,824,618.48 1988 and 1989 .P41,916,937.78 T0T AL Then Commissioner Jose T. Almonte of the EIIB in a letter, dated October 26, 1990 (Exh. I), recommended the assessment and collection from the petitioner of the total amount aforementioned and stated therein that his office is transmitting the entire docket of the case to the Bureau of Internal Revenue (BIR) Commissioner. Upon SIR's receipt of the letter of Commissioner Almonte, together with its entire docket, the same was forwarded to Atty. Ruben Buenaventura, Chief, Investigation and Intelligence Office (IIO) Divisi,on for his immediate and appropriate action (Exh. J ) � On January 25, 1991, Atty. Buenaventura recommended to Deputy Commissioner Victor A� Deoferio, Jr .� the following: 1. That t~e rate of gross profit for imported items be adopted in computing underdeclared sales;

DECISION - �C.T.A. CASE NO. 5126 - 4- 2. That underdeclared sales be computed b~sed on underdeclared imported purchases ~et of� advance sales tax paid; 3. That underdeclared sales be given or allowed cost of goods for income tax purposes; and 4. That imported purchases sold as is be ~subject to sales tax. (Exh. K) On February 12, 1991, Deputy Commissioner Deoferio, Jr. issued a memorandum to the Assistant Commissioner, Speclal Operations Service, directing the latter to prepare a conference letter . advising the herein petitioner of the prop~sed deficiency internal revenue taxes computed hereunder: A. Data/Information from docket: .-..�-��1.���-Sales - Imported p. 10 __ , . ,,.p_..4].., 054.258.98 . ------2. � �Cost of Sales -�Imported:� a)� Inventory�-- ... "' Imported 01.01.87-p. 10 11,184. 911. 23 ��--- � �b)� Purchases - Imported p. 10�� 45,538,694.57' - -Total� Available� for Sale�� 56,723,605.80 � c)� Inventory - ''l -Imported 12.31.87 p. 10� 16,495,544.63 .�-:�::���P--�401,'228. 061.17 .. -------- 3. .. Undeclared-- Import� .... ���:: :.P.�-94 ,-110,175. 00 ��--- � Purchases� pp. 12-13 ��--��� B.--Computations:-��--� ... ----..��1. � Cost of Sales ratio A2/A1 85.492923% 2. Undeclared� Sales -- ������� ������� �P-110�;079. 491.61 Imported Aa/81�

f"''� . DECISION - � ,,_,_,c.._:t,,_A.....,.C.A.SE... N.0.-".. 5..12.6-...--.. �--..... 3 ... ��� Undeclared� Gross � 15,969,316.61 ��~... � Profit 82� ---A3 �� ..... C�. Deficiency taxes� due: ..,... � -1. � Deficiency �Income<f.ax ---~ .. �83 x- 35%��� ...... �� .. � � .....- .... p ....,5�,-589, 261.00 ........ �50% Surcharge- � C1 � X� 50%��� 2,794,630.50 ... �� Interes-t:��tO� 02.28.91 �� � ...... ,3,213,825.08" --~�� C1 X 57.5% �� .. ���T�� 0 T A l � �� --�--��-:~P-11�,597, 716.58 �� � 2. Deficienc}l���Sales ..Tax .... ,... � .. at� 10%� ��pp.-�12-13--.... ........... p_. --7�,-290. 082. 72 .. ...... at 20%-� � pp.��12-13� � - �10,493,312.31 � � � .. Total Due-. 17,783,395.03 �����--�less:�� Advance�:.Sales. 11,636,352.00� Taxe.s�paid�pp.- 12-13 ...... Deficiency Sales ..Tax� � 6,147,043.03 � �-������50% �Surcharge C2""'X 50% ... 3,073,521.52 ..... �� �Interest to�' 02.28.-91 5, 532.338.73 "' � � �T 0 T A �l .. --���7���il-��1:4��.-752,903.28 (Exh. L) On April 15, 1991, Asst. Commissioner for Collection Jaime Mara issued a demand letter to the petitioner for the payment of a deficiency income and sales tax for 1987 in the amounts of P13,414,226.40 and P14,75~~903.28, respectively (Exh. C). On the same date, Assessment Notices Nos. FAS-1-87-91-001654 and FAS-4-87-91-001655 were issued against the petitioner, requiring the latter to� pay the amounts of P13,414,226.40 (interest being increased from P3,213,825.08 to P5,030,334.90) and P14,752,903.28 as its deficiency income and sales taxes, respe~tively for 1987 (Exh. D and E). 1._�;) .'.).. uc;

DECISION - C.T.A. CASE NO. 5126 - 6- Petitioner .protested the aforementioned deficiency tax assessment. The same was denied by the respondent in a letter, dated December 10, 1993, which was received by the petitioner on June 8, 1994. Hence, on July 6, 1994, �petitioner filed with this Court the instant petition for \, review. Petitioner presents the proposition as reasons of the petition for review that the 1987 deficiency income and sales tax assessments, including increments, are void ab initio, on the �grounds that: (a) the deficiency interests imposed on the income and percentage tax deficiency assessment notices .were computed in violation of the provisions of Sec. 249(b) NIRC; (b) the percentage tax deficiency was computed on an annual basis for the year 1987, in accordance with the provisions of Sec. 193 of the NIRC of 1977, despite the fact that in 1987, percentage taxes must be computed in accordance with Sec � .... 162 of the NIRC of 1986 (PO No. 1994) on a quarterly basis; (c) the BIR official who signed the deficiency tax assessments was the Asst. Commissioner for Collection who has no authority under the Tax Code to sign deficiency tax assessments; and that the tax assessments were based on alleged documents which are not admissible administratively or judicially, thus, the tax assessments

DECISION - -C.T.A. CASE NO. 5126 - 7- were not based on actual facts but on mere presumptions (pp. 2-4, Pet. for Review). On the other hand, respondent in her Answer demurs and maintains that (1) the assessments are valid and -correct and the taxpayer has the burden of proof to '- impugn its validity; (2) the petitioner failed miserably to present concrete evidence to overcome the presumption of validity and correctness attached to the assessments; (3) the assessments were based on facts as a result of the investigations conducted against petitioner by agents o f t h e Ec o n om i c I n t e ll�i g e n c e a n d I nv e s t i g a t i o n Bu r e a u a n d the Bureau of Internal Revenue; (4) the findings of fact of unrecorded purchases/importations which gave rise to undeclared sales were derived from copies of consumption entries filed with the Bureau of Customs which were duly authenticated as having been processed and released, after payment of duties and �taxes, by the Chiefs of the ''1 Collection Division, Manila International Container Port and the Port of Manila, and fr~m duly qertified copies of Financial Statements secured from the Securities and Exchange Commission; (5) the Commissioner is not required to make his determination (assessment) on the basis of evidence legally admissible in a formal proceeding in Court; (6) the undeclared sales are considered as net taxable income of petitioner following the case of

DECISION - C.T.A. CASE NO. 5126 - 8- �-���Republic vs. Gonzales (13 SCRA 633), thus, lLable to pay income tax at the rate of 35% under Section 24 of the Tax Code, as amended; (7) the imported items sold are subject to sales tax on original sales of ten percent (10%) to t~~nty percent (20%) based on the given value of the articles sold, less advance sales tax paid (RR No. 11-86, Exec. Order No. 3 6) ; (8) petitioner is liable to pay fifty percent (50%) surcharge and twenty percent (20%) interest pursuant to Section 248(b) a n d ( c ) .l. n r e 1 a t i o�n to Section 249 of th~ Tax Code, considering petitioner's substantial understatement of sales/income; and (9) the assessment notices were signed/issued by the then Assistant Commissioner for Collection, for the Commissioner, in atcordance with Adm. Order No. 2-85 in relatiori to Rev. Memorandum Order 27-85, both dated Sept. 25 �. 1985 delegating the authority to sign assessment I notices and demand letters t~ the Assistant Commissioner ''1 for Collection. The issues in this case may be simplified into one and that is whether or not the assessments made by respondent against petitioner have valid and legal. bases, thus subjecting the latter to a deficiency income and sales taxes in the amounts of P13,414,226.40 and P14,752,903.28, respectively, plus interest that may accrue thereon until actual payment of the same. l:J31

�:�t � � DECISION - <-,.._,,..C�.--T�.�A-�.-:�CPtSE-���NO �. 5�126....,,. ...,.� _,__ g. .. - .. T h e i s s u e s h o u 1 d b e r u 1 e d i n t h e�" a f f i r ma t iv e � a s � to rebut the validity or correctness of the�aforementioned tax assessments. It is incongruous� for- petitioner to. provQ its cau'se by simply drpwing an inference unfavorable to the respondent by " attacking the source documents (Consumption Entries), .f'"" which were the .bases of the assessments and which were ""~�~~�ce�r�tlf�ied ���by �the Chiefs .. �of�� the Collection Division, Manila International Container Port and the Port of ...., �Kanila����~as having� been'� processed and released in the name of the petitioner after payment of duties and taxes and ......... the-��duly .. c e r t i f i e d copies of Financial Statements secured .,,,--��from the Securities and Exchange Commission. Any such -..~�-�~inference.. c:a nn o t operate to .relieve petitioner from bearing its burden of proof and this Court has no warrant of absolution. The-Court should have been persuaded to , �.grant the reliefs sought by the petitioner should ...,it have .....,.,.,,presented� any� evidence �of relevance and competence ,.t'' required, like that of a certification from the Bureau of Customs or from any other agencies, attesting to the fact that those consumption entries did not really belong to them �..�. �The burden of proof is on the� taxpayer contesting the validity or correctness of an assessment to prove not ,....... only thatr �the Commissioner� of Internal Revenue is wrong l.J32

~�� --� �DECISION -> ..,.,.� �C~;--'f...;�A��"� CASE�� N0-.- 512 6 -- � , ....... ''"' -���--10 '-T' , , ' ...~"""""���bu�t-���-- ..the���taxpayer �is ��righ�t� {Tan Guan vs. CTA~ 19 SCRA �� -~ 903):.������ .. �otherwise ... �the�,�����pres.ll!Jip;.t.iq_o"�� �in ... favor of the ��~---���cor-rectne�ss ofLtax--- ..assessment stands�(Sy Po vs. CTA~ 164 ���!"'"'"'�SCR�A� 524).� � "The--�burden of proving� the illegality of- t-he assessment lies upon the petitioner alleging it to be so. "' �I�n��.. �the-' . case"� at �'bar,�. -petitioner miserably failed to discharge this duty. However,- with �regard to the imposition by the respondent of the 50% surcharge against �the petitioner as �� � fraud� penalty. this Court cannot agree with the former. The understatement of petitioner of its sales/income will not� .ipso fact:o make. the petitioner guilty .. of fraud. Pursuant to Section 282 (now 248) of the NIRC, the fraud ......~..�c-ont_~mplated��� before a� 50% surcharge can be imposed is �Willful neglect to file a return or the "false or .... fraudulent� return is"willfully made". In o.;ther words the fraud committed is intentional. ., Consequently, in. civil � ... tax��� fraud� cases. the �burden�� of proof is always on the BIR Commissioner to prove that the taxpayer committed fraud � ��'''"i�nten-t�.i:onal�ly���� for the si~ple �reason that the defendant cannot be compelled to testify against himself. In the ����-����instant� case. no substantial proo.f was introduced by the ,. ��� �� respondent to est a b 1 ish the fact of fraud � thus, the ;�;'1'' �::�""�-�?�lmpo:si�ti:cm�"'� o�f the.. 50% surcharge as __fr.aud~.. pe.nalt.Y~ i.s --- ,., .!C~O n side red�� arbitrary .

DECISION - ..... _... c �� "F- .. A,~� .,c.ASE� No. 5126, - 11 -� "Fraud is a question of fact and the circumstances ,,, ... constituting fraud must be alleged and proved in the �� -court below. The finding of the trial court as to its ~xist~nce and non-existence is final and cannot be ,,, � r~viewed unless clearly shown to be erroneous. X X X " �-�-.Fraud- is never lightly to be presumed because it is a ,! serious charge" ( Cc.1mmi ssi oner vs. llyal a Secur i t:i es Co.~ ~..,..,.,,.... Fr.aud:��is�'��never:� ��imputed �and the Court never sustains findings of fraud upon circumstances which, at most, create only suspicion"i$and the mere understatement-of a tax is not itself proof of fraud for the purpose of tax ���evasion�. -(�Yutivo Sons Hardware Co. vs. Court of Appeals. 1 ....,,.,,SCRA�-160).-���� -The.. mere -understatement of income in itself .�-,,.���does��not �-prove fraud ..- ��{Gomez� vs.� Domingo. CTA� Case No. ~"�-""'���1168�. �February �15�.��1�964) ...~. .., ��-��--Although the� reach of tlie issue on which we rest our decision renders the consideration of the subsidiary ����� .. issues�� raised by the petitioner in its petition unnecessary, suffice it to state that the same should be �--."'�'"'a d d r e s s e d by t h e Co u r t f o r t h e p r o p e r g u i d a n c e o f t h e parties concerned. -��Petitioner raised the argument that the deficiency interests imposed in the income and percentage tax ����de-ficiency was� computed�in��violation of� the provisions of 1~34

I , . � DECISION - "'�k���--�C.::T.A.�CASE NO. 5126 - 12 - -~ Section 249(b), NIRC. This Court believes that this is a �.o��clear.�inadvertence �or misinterpretation� of the petitioner of the provisions of laws applicable. The correct provisions of law applicable in the case at bar ~re Section 282 (b) and (c) (now Sec. 248 [b] and [c]) and National Internal \, Section 283 (now Sec. 249) of the 1987 Revenue Code ( NI RC) .~ Petitioner contends that the 50% ��� ��� ��s u r c h a r g e s h o u 1 d no t b e � i n c 1 u d e d i n t h e c om p u t a t i o n o f interest since this was not mentioned in Section 283 (now This� ratiocination is a clear manifestation .�f'' that petitioner did not read Section 282(c) (now Sec. ''�� 248 Eel) where in it was clearly stated that the pen a l�ti es ��, �����"''"""''�"�imposed .shall ..fo.rm part o.f. the tax and the entire amount s ...�"&,,_,,.� hall ...be .. subject to . the interest prescribed in Section ., ..... ,:,283���(now . Sec. �24�9).�. Thus, the Court finds the ..,..,..,..,.,.,.computa�tion�� made� �.by,... ,, the respondent .c:as correct and logical. The aforecited provisions of law are~ quoted hereunder, for easy reference. --� SEC. 282. C.i.v.i.l Penal t:.i. es. (a) X X X (b) In case of willful neglect to file the� return within the period prescribed by this Code or regulations, or in case a false or �.fraudulent �return is willfully made, the penalty to be imposed shall be fifty percent (50%)� of the tax O"r of the deficiency tax, in case any payment has been made on the ,basis of ,........ su�ch� �return before the dis,covery of the falsity ...... -�.�or fraud.

./ �'' "DECISION - :~!{";:~""'*a:C;:.. :r..... A�.~"dC A�S�E�~.. N0 �� 5�1�2 6 ��� (c) The penalties imposed �hereunder shall,.,.. form�-� part�of the �tax�� and� the.,��entire amount ,: ' shall be subject to the interest prescribed in Section 283. XXX XXX '""''"�SEC.�--���263.-....'",.���Int:erest:. � (a),�In ��� gene�ral. There �shall be assessed and collected on any �> ...���unpaid� amount of tax, interest at the rate of twenty percent (20%) per annum, or such higher ,.....,.rate"* as�, may�� .. be p r esc rib ed by� �reg u 1 a ti on s, � from the date prescribed for payment until the amount is fully~paid � ......,.....~(b) Oe fiC':i ency���in t:eres t:. Any deficiency in the tax due, as the term is defined in this Code, shall b� subject to the interest prescribed in paragraph (a) hereof, which � � .. i n t "! r e s t s h a 11 b e� a s s e s s e d a n d c o 11 e c t e d f r om the date prescribed for its payment until the � f u 11 p a y me n t �<..t.h e r e o f � (c) Delinquency interest. - In case of failure to pay: (1) The amount of the tax due on any return required to be filed' or � (2) � The amount of t~e tax due for which no return is required, or (3) ~- deficiency tax, or any surcharge or interest thereon, on the due d a t e a p p e a r i n g i n t h e n o t i c e a n d d em a n d"l o f the Commissioner, there� shall be assessed and collected, on the unpaid amount, interest at the rate prescribed in paragraph (a) hereof until' the amount is� fully paid, which interest shall form part of the tax. xxx� � " XXX XXX On the issue raised by the petitioner that the �percentage tax deficiency should be computed on

, ';:'''"' DECI S I 0 N - , ___,� "�� C� T � A� CASE . N0 � 51.2 6 - �1.4.:-. quarterly basis in accordance with Section�162, �NIRC and,,,.,_,... ���not � annually, the Court finds the same untenable. ,~~ Precisely the respondent computed the percentage tax on �_ "'"r.����-an�� annual�� basis� because of the fact that the petitioner did not comply with'the provisions of Section 162 of the " �1987� Tax Code. Pet! tloner� did not adduce evidence that /,,.' - will show that it filed a correct quarterly return for "����S�ales��and other pe,-.centage taxes for the period covered "<, ; . -�by the subject assessment � ..,,,,,.,.,..,.The-� -Court agrees with the respondent that the Assistant Commissioner for Collection has the authority ..... ,.. �to sign� deficiency tax assessments for and in behalf of the Commissioner. This power is clearly delegated to the � "�'"�~�-said��"� of-f�icla-1 in Re�\4'., -Administrative Order No. 2-85, which took effect November 15, 1985, thus, the Court ��-finds--the contention of the petitioner as a mere ploy to divert the real issue of the case. "Admini...s,. trative �-~regulations and policies enacted by administrative bodies -��to interpret the law have the force of law and are entitled to great respect." ��"�(E�slao vs. Commission on '":�Audit. 236 SCRA 161) � ���� Further,-peti-tloner, in seeking� to exculpate itself from the assessments alleged that the tax assessments � were based on documents which were mere xerox copies of �,.. import entries, thus, not admissible administratively or 133'1

,' , _DEC I~ I 0 N -: � � ,..-.. C.T.A�... CASE�NO. 5126" - 15 - �-:judicially ��against it, hence, the assessments �were not ��������base-d on���actual facts �but �on .. mere presumptions. We ruled -en contrarlo to the stand of the petitioner. . . ta\x.. e, s on the � basis� ����Of . the best evidence o b t a in a b l e . -in , ... -.case�� of fai-lure on the part of the taxpayer. tq s_ubmit the r�equ-i�red--r�eturns�,�stat�ement,� reco�r�ds�� and.,�other�� documents� � . -,,,.,.....L-Based_ on the records. presented, petitioner fails to submit ......,. the-��"�re�quired books and� . other� financial records when� "~ � � ...., r e q u e s t e d � � As h e l d by t h e S u p r em e Co u r t i n t h e c a s e o f "best� evidence obtainable" applies when a tax report �required by law for the purpose of assessment is not �available� or when the tax report is incomplete or ,.. f r a u d u 1 e n t . Hence, the questioned documents may be used .-by the respondent as basis for the assessment of any internal revenue tax. ... � �,-.SEC. 16. � , Power or the Commissioner t:o ----���,makr"i!tssessment:s�. ���� ,_.,.��-(a)��� x� x� �x� � ,..". (b) Fall ure to subm.i t requ.i red �reports~ �� ..-- �������-s-tatement~--�����e�t:c-~ ..--�---� Wh�en� a ��report required by law as a basis for the assessment of -any national internal revenue tax shall -no-t. be .~. ~.forthcoming .�within the time fixed by law or ......_,.... ,r�egu�lation���ol"'�� when there is reason to believe ... tha.t. .any. such�� repor-t �is ....f.a-1 se, incomp-lete. -or .,..,..--;-..e-rroneous,-- ~--the Commiss io ne r sh a 11 �,assess �-the ----�pr-ope�r"-�tax--on �the��� be-s-t evidence� obtainable �. In case a person fails to make and fil-e a required return-- o-r- .. lis-t at. the- time .. �- pr�e s c r.-ibed--,~.... �

<lr~l""'' 0 ECI S I 0 N - �~ ..r;:w��� � C�.�T .ti/!t.,:� CASE N0 � 512 6 . - 16 - ' .,.,.,~,.by law, or�� makes willfully. or othet1�wis.e,. � a"'" � false or fraudulent return or list, the ........ Commissioner shall. make- the return from his own _,,,,,.,,knowledge and ... f.rom .such informa-tion as he can .,.,.obtainthrough.testimony or otherwise. In any such case, the Commissioner may make a return or amend any return and any return so made or amended shall � be prima facie good and sufficient for all legal purposes. ' (Underscoring supplied) XXX XXX XXX ,. f � � ,. ,;- By t h e u s e o f t h i s me t h o d t h e Com mi s s i o n e r ma k e s o r ..,...,.,,amen�ds the� return from his own knowledge and from such information as he can'obtain thru testimony or otherwise. " �A�ssessments. made as �such are deemed prima facie correct and sufficient for all legal purposes. The taxpayer has the duty o~ proving otherwise. As earlier adverted to, petitioner failed to discharge this duty. -~ Where the taxpayer is appealing to the Tax Court on the ground that the Collector's assessment is erroneous, it���is incumbent upon� him to p'rove what is the� cor�rect and just liability by a full J and fair disclosure of all ... ,~pertinent data in his possession. Otherwise, i f the ..�. taxpayer confines himself to proving that the assessment ..,~-i�s��W'rong, the Tax Court proceedings would settle nothing, as the way would be left open for subsequent assessments ....~..�and,.. appeals� in� interminable succession.� (Sy Po vs. Court .-��,,� � .,.,.,.o�f�"~ax��AppeaLs. supra.)

DECISION - C.T.A. CASE NO.� 51�26 -17 -. As earlier discussed this Court affirmed the 1987 deficiency... assessment �made � by� respondent against petitioner, except the imposition of the 50% surcharge, which should only be 25%. In accordance with the said fi~dings of the Court, the computation made by respondent \,. of the deficiency income and sales taxes of the� petitioner found on page 5 of this decision is modified, � �.... � a s � f o 11 ows : � ��� "-""""'-1.���- Defriciency income tax ---~�5,589,261.00 Plus additions to ~ax a. 25% surcharge [Sec. 282(a)] (5,589,261.00 X 25%) 1,397,315.25 �� b.��20%�deficiency interest [Sec � .:283(b)] 04-15-88 to 04-15-91 ,.,, .....4,195, 774.01 ' (6,986,576.25 X 20% X 1096/365) Totql income tax due and payable . ,. . � Pll, 182 �350. 26 -~�� 2.� Deficiency sales tax� p 6.,147,043.03 Plus additions to tax a. 25% surcharge [Sec. 282(a)] 1,536,760.76 (6,147,043.03 X 25%) 4. 976 ..~78. 67. b. 20% deficiency interest. [Sec. 283(b)] ,,. P12., 660,382. 46 01-20-88 to 04-15-91 (7,683,803.79 X 20% X 1182fo665) ��Total income tax due and payable ,..... IN� THE LIGH"T -OF All THE FOREGOING, judgment is ......... hereby rendered DENYING�""'�the herein petition.� Petitioner ...._...,.. is�-- hert�eb�y � ORDER�ED:-r�<.t.o���PA�a,;�-th e respondent Commi s si one r of Internal Revenue its deficiency income and sales taxes for the year 1987 in the amounts of ~11,182,350~~6 and . respectively, plus 20% delinquency�� 1.J4CJ

DECISION - �� �C.T.A. CASE NO. 5126 - 18 - interest per annum on both deficiency � taxes from April 15, 1991 until fully paid pursuant to Section 283(c)(3) of the 1987 Tax Code, with costs against petitioner. �-���-,..�����~���.....,., ... SO"� ORDERED���. ��� ....,-..... � � ._. ....... '" ~~~Q. Q~ ��ERNESTO �D. ACOSTA Presiding Judge ~ ~ � RAJIION 0. DE ..... Associate. �Ju e � '�� ~ ~L / : ~�AsseN>cc-ioiabQ�.Ju~ :""�. � -'- CERTIFICATION decision was reached � I h~reby certify that-the above after due consultation with 'the members of the C...o, urt of -Tax-Appeals in accordance with Section 13, Article VIII ���---o�f����the .. Consti tution. � � ( ~l9.Q~ ERNESTO D. ACOSTA Presiding Judge Court of�Tax Appeals� 1;J41