CTA Case No. 3378 (Decision)

RXPUBLIC OF TfU PRJLIPP I1168 COURT OF Til X APP'KALS quf'(~(l~ CJTY CITIBANf(, N . .il . C. T.A. CASE NO. 3378 PHILIPPINE BRANCHES, Petl tlone .r: - V~l".t1L1S �� � THlf IICTJrfr: CfJ'(tiH.1 /m.!OW''i OF l fl1'lff, Nlt.l.. .RFVfi'. Tfl.Tf, RespondnD t X - - -- - - - - - - - -� X D E C .T B I 0 N The 8ct1orJ .is about~ a claim fo1� reftmd of an alleg�ed c.'Vt'H'P.rt.fd lncr.,me ax i n the total 8.mount of P568,989.85 l"t::"~pn'!.se.nf;Jn~ the 5 .%' wltbheld tax on rer1tal income fo1� tht~ t ,ryx,<:fble years 1979 and 1980. coJ�poJ�atlorJ engaged .ill business ln the Philippines, 'leased office bulld.f.n~ tls well as pa1�king spaces located at Ma.kati, Netro Manil a. Fo1� the taxable yean~ 1979 a11d 1980 pet.U.im1er's tenants withheld and paid to the 1�esponden t tlJe coz�.respoJJdiJJg taxes from the .l'emtals due t:lle pet.ttioJ1e1� ptu�suant t o Sectio12 1 (c) of the Exptmded W1thholdiJ18 Tax Res-ulat1olllrJ (EIR Reve1we Regulations No . 13-78, � as amimded) , summar1 zed as fol lo ws: 37h

DECISION - CTA CASF. NO . .137!1 19.7_9_. p 60,690 . 97 69,897 . 08 Fir st quarter 69 ,160.89 Second quarte r 70,160.56 Thi r d quarter Fou r th quarter P2'7 0 ,1 60.56 l.9_8J)_ P. 78 , 370.22 69, 049.37 First quarter 79,1 39.60 Second quarter 72,270 . 10 Thil:'d qu rter Four. h quarter P29 8,829.29 I t likewise appean; that peti tione1� filed i ts COl'POl'ate annual incom e tax 1�e tu.rn for tl1e cale11da r year ended December 81, 19 79 011 April 1 5 , 1 980 ( Exh. "E"); that .t t t~bowed ..<t net loss of P 74, 8.54, .916. 00 twd .i1 t~ avnilable tax c 1�edi t s totalled P6,257, 780. ao -� even wi th out i11 c lw.1i1111 th e amounts "H'i thheld on ren t .<. tl income under the Expanded IVl t hboldi11g Tax System - we1�e mwtilized o1� un ap p lied f or the r easo11 tll.". lt the yea1� 's operation 1�esu.lted 111 a .loss ( Exhs . " E- 1" & " E- 2" ) ; that the tax wi tblJeld by the tenan ts of the peti tione1� agai11st rentals pa i d du1�ing 1979 were n ot iJJoluded i 11 th e tax cred i t s, alth o ugh s u cl1 r en tal i11come (P7, 796,811. 00) was in c luded i11 its i ncome declared for said c al e11dar year ended Decembe1� 31, 1979 (Exhs. "E- 3" & " E- 4 " ) .

DECISION - CTIJ CASE NO . 3378 - .1 - Aga .i11, for the yeBr ended Decem bez� 31 , 1980 , petition tu�'s corporate annual i 11come tax z�etuz�n ( Exh. "BC'' ) f i l e d on Apri l 15, 198 1 , shorved net loss of P77,071 , 790 . 00 f o z� l1J c ome tax pu.rposes; th a t i ts availa.blt3' ttL'{ ore dit ( l�eftmdabl e ) at th e end of 1880 in the c9moun t of P1 1 , 532, 8 55. 00 ( Exhs . " BC - 1" & "BC-2") w.:u; wwtil i zed or unapplied as tax c1�edit; th at .s tU d av::Ulable tax credits do not include the amounts rv.i thhel d by peti t i one1� ' s tenan t s against their rental p ayments du1'i11g 1980 bu t sa i d i l1CO.IJ.1e p~q.vm ~n t: lu1s been d e claz�ed as p a z�t of the g 1�oss i n come ::wd included i11 th e a1wua l i ncome tax re tr.u�11 ( F. xlt . "BC: - 3") . Pe t .i ti f"~JJe r fl.l~;;"ld , 1 c .laim fo1� 1�efund of t h e amoun ts of .F'270, J 60 . /5f_; .1nd .P.-:?98, 82.9 . 29 or .<I to tal of P568,989 . 85 on Au,t;~Ht: l 13, 1981 an d the pz�esen t p etition for l 't:1V.f er.r ( 1JJ C'c t:obH.l ' 12, 1.981. Tl1e c ase pz�es ent ;::~ no dis~m t.e as to the n~ la t i ve l.v s imple J1J<'1t e r .t.~!l fliCtB except fo1� what J'espoJH.ien t r.rou ld have i t i mp1�essed t h a t t h e l 'i ght to the z�eco v e1�y of th e taxes withheld and paid on or befoz�e Oo t o b e1� 1 2, 1979 h ave L<f l.l'eady pz�esc.ribed , i n voki11g the s tatu tory .lLmJt.'i tioJJS mandated in Section 292 of the T.9x Code, Jnte r alia , " I11 all Y c as e n o s u c h s uit or p z�oceedl11g s l1al l be begu11 afte1� th e expiz�ati o11 o:f tr-10 .vea.z�s :f.z�om th e d a t e of 37R

DECISION - CTA CASE NO . 3378 - 4- payment of the tax or penalty. " The questio11 ed withheld taxes 01 th e rc:Jnttt.l income foz� the f i r st and second tJlUlrter.: o f 1 g 79 subject of the claim fell due and were _p,<Lfd on or before April 15, 197g a11d July 2 0 , 19 79 res,r:1 {~ctively, C).t" moT e tlum two years pz�ioz� to the fL U ng of the instant peti ti on 011 Octobez� 12 , 1981. I!en c e barred. It may suffi c e to H t:a te howevez� that tlle legal moorings o f this <':f PP <'H 'fUJt: c ontentious quibble OJJ been se t i n p 1 C1 C f ' fn ' n llm l:'-'"'r ("!( rul .ings. Tllus held, " when <~ t tvr il'J p a id in inB tallments, th e p z�escz�i pti ve pez�i od nf trvo yean~ provided i11 Sectio11 306 (11ow Sec t:J o n 2 9 2 ) o .f th e Na ti cma l Int erna} Revenue Cc�de s h o uld be eo unted fz�om the date of t h e final p tiYment. And, the ' fin al payment' is the l ast q u:, rt r payment at tlle e11d of the cal en da r o1� f .t sc 1 y ear r.rben i t is f i 11a lly ascez�ta .i. JJ,'!fble th <1 t (/Jo t ,'f , 'fJ.'l.'VtH' e .i thez� made pz�ofi ts oz� suffered losse s iJJ 1 ts busi11ess opera tio11s. " (Commissione r of Internal Reve nue v . Asia Australia Express Ltd ., G. R. No. 85956 , April 10 , 1989 ~ citing Collector of I nternal Re venue v . Pr ieto , 2 SCRA 1007 and Commiseloner of Internal Reve n ue v . 37~

DECISION - CTA CASE NO . 3378 - {\ . Palanc a, Jr. , 18 SC RII. tt!l6 ) . This len d s sett ling eloqu ence t o the f oc u s }ng q u esti oJJ z�aised in the c as e ..~ t ba .r. By s u c b p roJJOWJ c e men t tbez�e ca11 be 110 occasio11 t o fu1� t b t:n� s pec ulat e up , �n rvlJeJJ to base tl1e z�wming of th e s t at u to1�y p eriod of l imi t ations o tl1e.rwise tbe1�e would be a .l'BlJ d om q_u i1�k of a varia11ce i11 the t re a tme11 t of cases s i mi l at�ly situated. B1�ougl1t to be ar upon the ci.l�cums tlw c es obtaini11g, tl1e peti tio11 fo1� 1�eview was filed 011 Octobe1� 12, 1981 well witbiD the two y e a r pez�Jod c ounted fz�om Ap1�il 15, 19 80 , t h e da te o.f t b (~ filing of tbe final adjus tmen t z�ettU'JJ f(l l" t be c a l endaz� yeaz� e nded Decembez� 1979, pu.r�s uan t t o Sec t i o11 87 (b) of the Tax Code. Respcmdent 's o bje(:'!tion which would ba1� peti tioDer ' s claim f o z� t h e fi1�s t t wo quaz�te1� tax payments is of no n1ome�n t . All told, th e ca1.:;e before Us JJa.rdly pz�esents a g r i pp.i n g q u e s tion . A c� t l111 H eh o riJJ th e basis foz� tl1e cJaim is n o t; sh or t o [ spAcl fi e s upport in t erms of t ract a bl t:" d L'i ta openly lafd an d f 11lly d isc l o sed. The z�ecor ds make i t c 1 e ar t ha t pe t i ti OJJel' ' s iJJCoJDe tax .retul'lJB foz� the t axab.l e y e az�s in questio11 bave shoriJJ losses and ex ces s c redl table i11 come tax payments . RespoJJd en t p oints t o no f a ctual e!Toz�s n o1� supe z�flui ties r<~bl ch nee d be abz�idged. T!Je

DECISION - CTIJ CASE NO . 3378 - 6- .t�equisite statements <'HJ(f ce.t�tificatioJJS of i11come tax r.r.tthheld and rerdt:'---u:f upon r.rhich tllCked the c .l aLmed r efund cou lri f unJJ s h tht"l basis fo r a have r ema in ed a t .i d.l � n.J?� s peed 1 so to spelfk . More over , 1�e sponden t POl' es no ob jectio11 in ba ving the case submitted fo r d~cil':don e-n the basis of tbe pleadings 1 1�eco.n:fs and t he ( vi dencc hy pe ti t;lonei'. I t may suffice to s t <=tte tlu~ t "Si11ce one who prays f o .t� judgmen t o n tl1e p.leadlngs without offering pro of as to t:h t' f r u t.h of a .ll the material al l egat. ions 1 mu st be UJ t t-i~'n;h , od to have a dmitted the t r utl1 of al } m."'t.r>r i ,' 1 a nd rt1.l e v an t .~l legat i oJJB of t:he oppos ing PlH'ty, (HHi to .t�est his mo tion fo1� judgment on these all eg ations taken together wltb su c h of his or.rn as <1 1"::"' a dmitted (Bauermann v. Casas , 10 Phil . ~R6 ; Rvnn~A lista v. De la Rosa, et al., 76 Phil. 11 5 L re:~ ' onden t 1 as po _in ted ou t by p eti tlon e .t' 1 may be con H.lde1�ed as not questioJ1il18' se1�1 o usly petlticmer's entitleme11t to its claim for 1�efund. Mo.t�e so when the evideJJce pz�esented, which was not disputed by z�espo11deJ1t, sufficiently establishes petitioner ' s z�ight to the z�efund. (Commonwealth Management and Service Corporation v . Commissioner of Interna l Bevenue, CTA Case No. 32.32, June 26, 1985. ) " 38 .1

DECISION - CTA CASE NO. 3378 - 7- He do not think aJJY diffe~�e11t coJJclusion ought be ~�eacbed i11 tbe case ~"~ t bar. NHEREFORE, respondent 1s hereby ordered to grant the refund o:f the a.11oun t sought by the petitioner. No costs. SO ORDERED. Quezo11 City, Me t~�o Han ila, August 30, 1991. NE CONCUR: ~~- Q\.Q~ DNE'#ro D . ACOSTA Associate Judge C.II�.HTZFZCATZON I he~�eby ce~�tify that this decision was reached after due consultation among the JDembers o:f the Court o:f Tax Appeals 111 acoordtmce w'l th ' Section 13, A~�tlole VIII o:f the Ccmstitutlon. 3R?