CTA Case No. 5216 (Decision)

� � BEPUlSLH.: Of- HU.:. IJHitiPPINt:S: COUHT Of rAX APPALS UU �LON C l IV SUN liFE ASSUHAN E COMPANY Of <;ANAOA <PiiltiPPINl UHANCII). Ptt 1 t toner , �� varsus - C.I.A. CASE NO. ti218 COMMISSIONEB Of\ INlEI!NAl. HEVENUE, Hesponclnt. )( - - - - - �u� - -� �� �� �� � 1.) t:::: G I S I (:.> N This c.lst; lnVOIVth> jUdl(;liili dUt lOll r�or� the ovl'trpald dooumnl:a��y t<llliiJd r a x �J 11 i n ::> u 1 d not:: t' o 1 c v Nos . 91 3 4 lOti and 0 LH3l6 6 d u rl n U t he V ,01 ct 1 I U \:.:1 :L lila �faGts a � I.J<.)r�n.:: l.rv tilt-! r�'''th11�.1S an�i t�le;:.HJIIttJf.l of tht'l oase a.-�:: as ro 1 I \)WS: P a t i t. i Jl 1 e �� , Sun 1.. 1 t1-.1 .�i.::Jsur .i:llt<H:: company ur- Canada (Ph I I . Branoh}, Is a restdl.;\nt t uI. (:1 I !.Ill G 0 ,. IHH" i:1l t I u II d u I y the laws ot� Canada. It duly I tonsed to do bust ness In the Phi I ipplnes i lb it IS prlmarl ly engaged In th'.l 11e I IIStii'SiiUI biiS i llOi)S and dS suoh, It Is subjoct lv cJ > o u 111 t.!l i i t a I' 'i <.> t a nt p t a: on lll td I ssuanoe o�f I If Insurance pol totes pursuant to Soot1on (I I I

.. Ot:CISION - C.T.A. CASt NO. 5216 or t 11 1\1.:. t 1 on a I llllbiHr.AI (NiflCl, as amended. Pr I 01� to Ft:tbr'uodry ISI92., ptillt.lul\er using t he Ill e t & r� I n g Ill a G h I II fl.) I th e urrixlure c1.:�� c t1111 en t a 1� y s t a111p s I l.::. l.ilJ I i LV 1 :;:;. ;uc-�nues . 1-!0Wt\lVelf', Litle tu tnc��aas1ng volume ut� lli.C.llldliCe P''lluy ar�PI it:nt I Ofli> VBillfJS r� U II 1' f'Oili h�.lndr eel ltiOUSand ut fhl: . ... s f (I ntlll ion:>, petit iolltH� t o u n cJ t h 1 s 111 e t t> r 1 no llH G h i 11 t tt.tdlollB and t 1 111 e �� con :. u m 1 n g . Ull ffJwl�uury 1 u' I f:l82, p e t l t I on e r� 'FOI"tna I I y the tJureau or 1 n tar Ita I Heveuu.;; (Bill) fl()CH or AfAP (AuthOI" IIy lo ACGt1pL h:lyment) svstt:tm 1n teu 0 f t t1 CJI 1111:1 t e I I n \) [II d G h I II '.: ( l X ll' � A ) . Uncler t� he 1-'lHH nr A IAP system, petitioner d te S i I' tnJ ; L� illl p s l II w ti I h I 1\ f) 13 I H wtll l:;sue an A ., A P beat' 1 n u a b .:1 I I a I II UIUlH:IJ' . Vilil I dati 011 (}rt the AIAP and the AlAP lllt H� 1. 1 t 1 (t n e r ' s ottlclal reooipl. ftii'UU\Jh Ms. Lt!iOill 11:1 tuldoll, Gh I ef', Lol l<'tot..lon t1anol\, BIA �- Wast Makat1, tile r(:tques�t WiiS granted <l:.xh. A�- J) � A n d 1 n o o 11 s e q u e n o e f 1.1 I' l h e u H t) t 1:11,::! f\1\P BVo>tem, petitioner was requ ll"tlfl by ti1t: IH l o lt"i.fl I n I. d I I ti WhtH'ein It ahal I record the tya uf \"IOOUIU<H tt 8 rol" WI\ j \)('i ttit.t cJooumentary stamps ar�t utflxecl and Uti liZtH.1, the amount or tax paid, and the ArAP/POCH serial number being

nECISION - C.T.A. CASE NO. 5216 O(�nsumed, Potlltdll<r IG rt�IIJlJir;,HI l�l s ul�111 1 t ,, t r 110 cupy ot lhis I t:JcljJt:i t' t-) PI'�}. Vd t 11 d l t h t:; f.ll amps pur ,J)ased were l"u II y \'H.Hl SUIItt::d but ol' i l l) d tl h ll y the IIH;.t do o u "'en t a r y :. t amps . t� d c I I l l <A l. ti' uf this ledger�, petitioner Ill (I (JJ' I) ,-,OI!ij.lU t f-:1 lu 8tltt HI t i Gd I I y omputt the cllnOUII l oT dOI:IIlll�:JIIl<ti''J :;Jidlllp lcl.X baeecJ on the �taoe� va 1111:: or� l 1 le thal two f aoe va lttH o�f' t11e lift:: itttiUI'GIII01 pullote'b Iss u ect to l:ir�. G. l::riClll"fi<iCI\111 ::.;o I cddd f:i. Legaspi WIth l�'fJ I 1 oy IJ I ;4/06 d II tl H13lilt':lb, respectively, were lhe Ptllcy No . 9114/06 was l"tbo, lhO,U)U.OU, Instead ot P1 f)(J, 0( 0. Cl(r, WI� I cit I h u�lhll)ll t >31 aut.:.mat 1oatly genratas a wrong �.IOGillll<dll:al'y H l<iilljl::.i I t.i)( i) I' p ,_) / h 1 ) i b � 00 l instead nr P37b. 00. Whtlv Polt.:;y 1\lo. as p ., bO I I tiO' OlH!. 00' t tt::.l:oad I�' I ou, OoO. 00, I It us oomputt:il'' I] HI d I' il l 0 f! el'lI U t h d I' tJt" r�ot� In or dooumentary stamps t x a 111 o 11 n t 1 n u I o 1-' 4 0 0 , L\ n o . u u , ot P400.00 only. fhls e ,. r� o n e o 11 :::. noodtny or Vd ll.lc. a f o r e s a I d I 1 �t "' I n s u ,- a n o a p o I 1 n ltH> document11 y st � ntps lciX dlld j II lhe dltiOUn l tH P775,000.00, oomputact as �toll()WS:

m: t: l S I ON - C.T.A. CAS NO. b216 -4- Pl.d lc;t Nu. \J1J4/0b P3l5,:.:!75.00 Documentary stamp tax due on &rruntious faou value .! 2.!.{)() (P150,1b0,000 + 200 X 0.50) l. s s do tHIIIi e n t a r y c: t amp t a K . ----�---�--- due on oorreot faoe value (P150,00U.OO � 00 X 0.50) p ?... 7 9 1. .0.0.:. .2.Q O verpayment P400,400.00 Pol loy No. 0138768 Documentary stamp tax due ... 4 "10. 00 �-� on erroneo u s faae vatu ., ., �-����. .-......... ( p 160 I 1 60 1 000 + 00 X 0. 50) less docu mentary stamp tax . e_1E!.Q_l_QlQ!.QQ d u e on (Wrtoot faoe va I ttEl! <P160,000.00 + 200 X 0.50) Ovar�payment lotal overpayment lhe amount uf IJ3/b,d75.00 l:x: h. D�-1) was ohar�gad by t h a pet I t i o IH.ll' u n d tiH' J.\ 'I A IJ No . 40641 U:xh. t:) ptwollased on J\prll 11)1 �I!J\Ll. 111 til 1 1.1 l he a 111 o u n t or P 4 oo 1 '' oo. oo ( 1:: x h � f-1} was deduottd by tlt pat tltonti!l' undliH AfAP I'Jo. �106286 ( E x h � G ) , p u r- c h a s cl d u n A p r� 1 I ;..; :1 , I !J 9 ;;I � �r 1 1 ed P e t l t i o n e r t.HHHHII 1 n g a w a I' e o t t h e o v .:t r� p a v llttH\ t , on Apr�il tb, I \:H14 I l t> 0 I d I til I 0 r� t a X 0 f' d I l 0 r� I II t he a I t & r n a t 1 v til l o Iii d J u s t i t s d v i; u tn e n t a r y s t. il 111 p s 1 n v o n l o r y I n the amount ot P7/b,000.00 (lxh. 10. representing the I I eged o v tit I' p a 1 d d o o u m e n t iii r y s t a 111 p s t .:L� � llowavtH', the Inaction of respondnt on I t s I ;;; t t a r �� r q u e s t (i u Iii p 1 I e d t he p e t I t I o 11 a r t o t 1 1 e 'l h 0 I .n s t a n t I� \ill t i t i on f o �� Be v I e w on Uat'oh 241 1995 in order to toll the run111ng of the two year prescriptive period allowed under Seottora l30 of the

DECISION - C.T.A. CASE NO. 5216 - b -� NIHC, as Hm �ndod, i n 1 e I a t I (it) w I l h S e o t I o rt 2 0 4 ( 3 ) of the same code. Upon these fuots, responf1ent t'aiaed the tollowlr\{) s p eo I a I a n cJ a f I' 1 r tn a 'l i v e de t e n s e s 1 5. Patltloner fal led to show that the total am lllt'lt of P7"7fi,OO< .00 was aJtually expended and paid out of btH POCA Nos. 406241 and 40H2H6; f.:\ � Pet 1 t I cHHH " h a s not s how n t IH.l t Po I I o y Nos. 9134708 and 9138/66 were Indeed the Insurance pol lnies covered by the at leged erroneous payment of documentary stamp taxes In the amounts of P375,875.00 and P410,400.00, r�espeot i ve I y; '1. Petitlonet�' s olttlm �fof' t.ax ot"c'HHt 'for� alleged trrotHHHts payment o�r tlo umentat�y stamp taxes Is still undet' lnvestlgatlon/examtnati0n by the etn, 8. Claims for rafunds are construed strictly agai n st the olalmant for� tt1e- sanH partake the nature or exemption from taxation . Therefore, it Is incumbent upon pet It 1 on or to show that It Is nlit'I:H l tiHIH '.Ito, otht1rwlr,e, it shal I be fatal to its otlm tor tax oredlti 9. Taxs paid and ool ldated a r� t: JH' u I:HIIIH!t d taw and to have been madB I n a o o c. I' d a n 0 e with regulations, hence, n o t t" e 1' u n d a b I e ; 10. All told, tl'le petition doefi not 8tate a cause of aotlon . <pp. 2'1-�21, l.TA l'eo .) In order to p1�ova that. It IS enttttod to the amount sought for refund or tax oredlt, petltlanr sutimltted both or-al and dooumantary ovldeuoe. On the other hand, respondent's presentation or evtdonod was derud waived,

DECISION - C.T.A. CASE NO. 5216 -6 - upon motion of petitioner, tor fal lure of respondent's oounsel to appear and present har evldaho6 on the date given by tn� Court CRsolution, Aprl I 2. 19961 p. 105, CTA reoot'ds). AI I t h e e v 1 den c e p t' t:H'J an t '"' d by t IH3 p e t i l 1 o n tH' we I' a admitted by the court In Its f-usolution, dated .Jfnuar�y 25, 1996 ( pp. 96-100, G fA 1 eoords). Both pa1�ties s u bm I t t e d t h a i r' r .:t split o t l v �J 111 em o r a tHI a . Is pt<JtitlotHH' entitled lo the amount ot P/Hi,OOO.OO representing alleged overpaid documentary stamps taxi We answer� in the a�tttt'miltlve . Petitioner was able to provtt tt\a1 the oor�rect taoe valutt of lnsur�anoe Pollny N<Js. 91:1410(-1 alld 913B/6o ISSIHHJ to Mr . Nlok G. E no a r� tHl c I on a n d M s . Soledad B. respectively, W6re In the amount of lbO,OOO.OO <xhs. I, E-1, I and 1��1) and P'I60,0UO.OO U::xl\s. b, G--1, J and ...l�-1) and not Pt50,15o,ooo.oo (Exh. D--1) nor� P160, 160,000.00 <Exh. F�-1) as encoded In the computer . Since, the I I!I computer program automat Ina I ly generates the documentar�y �jI I stamps tax due whenevr the face v tua of lnsur�anoe polloy was encoded, it will of oour�se compute the sum ot P37ti,37tL OO an<1 P400,400.00 �ror th subject I I'ISUI'dllOfl policies basad on the wrong amount enoodd instead of th oorreot amount of P376.00 and P400.00 only. In addttlon, petitioner was able to establish that the

.-:.=� OECISION - G.T.A. CASE NO. 5216 - ., - refund or tax oredlt was filed within the two-year p&rlod ft��om the date o�r payment of the tax . It t I I ad Its claim fc)r refund with the B I A on Pf.IL_ 15 . .......!.... 1994 and with tt.ia Court on Mat'oh r� tH '. > k nn 1 n g dat o ot tha payment of to dot'wmantary stamps tax. paid on I 11 ,, tll' <.11'1 o e Po I t c y No . 9134'106 under� A lAP No. �HH.)')41 <Ext�. Bl; l!lnd on f:_pr 1 .. ! . ... �?:...1 under A�r AP No . 4068b { t x 11. c; . We Oclnnot a1.:tHHie tu ret.pull!'ielll.' b- I c11(HJinatiOI'I that' the dooumt:tntat'Y stamps tax ot' l n s u 1� an G e 1-' u I 1 o y Nus . 91341 .l6 and \11a8/bb wEtri$ not pa td out ot A I AI IIJo::s. 40624 I and 40ti286, respeotlvi;jly, dUt1 to t lie llliil pol l )tes were i s sued m on u 1 s b t r' 0:1 t 11"' pur o h a s e o 1' the A'fAPa. ltle tssua tll!;ttit i:> not the; l.tmtllness of payment o�t dooumtHttary staml)s tax bul til ov ���payment of tax that arose aue to hutnan errol ani lht:i recove,y ot� an exoesslve payment 111 t I OIHi I ln'lt>rtuil r� . V ti IHI Ei t a X pursuant to Seotlon ;.'.10 of t:ht NIHC. for� easy re1'er�ence Sectloll <:'.30 o'l' tltu NIIH; pr�ovtdes as follows: �seo. 230. Reoovery of tax erroneously or l t llegatly col teoted. N() BUit 01 JH'(lCiHHIII)tJ [f shall be maintained In any (;out�t tot the ,I recovery or any nattonal ltilernal revtHtue tax htH'eafter a I I egad to IHtv� beet cHToueous I y or� Illegally asseaseu or- c;ollected, or i.JI a11y

'i DECISION - C.T.A. CASE NO. 5216 -a- penalty olalmed to have been without authority, or of !.!U:'----um__LL!Jl!.g_!_!L!l!.Y-!.__ b.!l......�.!.!!.!Y. or In any manner wrongfully ool teoted, untt I a olaim far refund or oredlt has been duly fl led li I th the t.:omm Iss I one ; but suoh suIt or� pro o e 8 d I n may b a 111 a I n t a I ned , whet he I' o I' not auoh tax, penalty, or sum has been paid under protest or duress. I n any t:lase. !'. - - ': 1 . 2 1 .. s_'!.!.t. o r .. .. f.l.'''!<?(:jn<J_ .. __ ---- U t, "!.�..... !1 Ll:I.}!..--!J. X-. _J------J! !.L !.. ... L2.n.-.....-L-. ..!: .t9:t ... .. ___ ,.\!.t_ ... r t ?u! ....... U---l!_(}_ --- __ g t_ .J?...YL ?.! L U!..--L _ .. ... or ____ pen a I t y r e u a r d I e s s of a n y s up e 1�� \l en 1 n g c a u s e t ha t 111.:1. ..; a a� i s e d r l t.1 r pay 111 e11 l : P1 uv a du i , howover, l'hat the Commlssionet� may, even without a wt'ltten nl.:til'' ther:f,:,t', relund ur� o r� e d i t any t ax , w h tH � e on I' a o e n r t II e r e t u r n upon vhtnh payment wari made, suoh pavm=nt appears olearty to have been er r�oneous I y pa 1 d. " ( tJ n dill r S 0 0 I' I 1'1 b) S Up p i I <'HI ) f u r t IHH' 111 o I' e , find no log,,; on r�aspoucJant ' s be given probative value. The oase$ oltad by the respondent' s \)ounse 1 retar to tiHI usual lodger of hooks of account and not to th one requlrad by the UIH to be maintained. It should be noted that the ledger was foremost. requ I rect by the B I H to keep track on the documentary stamps purohased In advance and how they are utilized by tht:t petltionet�. '!'his Lt'lttr't js 01' tl'16 Impression that r�eponder�t Is ntH .htng on tho ledger alnoa a true copy thereof 11. I s t n be s u tJm 1 t: lad t: o the BIR befora petitioner oan nuv tor the ll&xt set of A'IAP. It Is to lle stressed ttlat unch.:H' tile AtAP system, It i.s only the ledger that can aooount un whether the

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DECISION - C.T.A. CASE NO. 52t6 - '10 - hereby certify tht this deotslon was rea.hed after due o on fHI 1 t at i on w i t h t11 e IIHil m b H' s o 1' t he Court o �t Tax Appeals i n a o Q or d a. no o w I t h G �3 o t i IJ 11 1 3 , A r- l i o I a VI I I of the Constttution. \2:w-Q- .. lHNS&U U. ACISIA f'l'iid>ldllltJ Judge Cvurl. of Ia .. .iqJpo:L:.alt; :� I I I1 I \