CTA Case No. 4721 (Decision)
REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY WANDER (PHILIPPINES), INC_ Petitioner. - versus - C_T_A_ CASE NO_ 4721 Promulgated: 19_!&_* THE COMMISSIONER OF INTERNAL REVENUE, _JA_N _t_t Respondent_ X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X DECISION r� .-. ..-1.--�.t�r�l"':�tl� Ti 'I-1.~-. ,.-.,.-1 �-�o �-� �- "1' .-. t-, .-. !- 1. ..r~t4--.iLt- '.) .1.':';:! -._=1� ��=-��� �- -._. ..i. r� t i .�.~-��r-��,r�,r.--.�;���-��r��-:....~.......... 1 r�-:�:.t�ljo=�~�=~�-.-.::.,-i 1�1-1 �-� ..... -� �-� 1-l-l-�.:-l...H-. 1J'."l-d-,'._.-.l._f..l-l�!-;�1-1;�:-::r, 1-'-.--.�".�--."��-�1 rt--'1- '���--''.�--~lU''-'��-���t.�~-:��.. .-:-�.1_1'-��-�-'I�l t�r��' T. .T-l--~�~--�-.,�.l-..l t1-�����tl o�='! 1�1-1~~;:::.�:-t1� r�r�:-:.��-=� �r..���(-���-�fl(-..1+r�-:�:....t�lt..:"'.�:-�' 1�;:�:-:�. ~'i r�:-:�.r-111-�;::�-:�. ,:.,:.:,.. .~.-~!��.=.i. ~ r� ,:::.1- 1- 01_1_1-lr:j I �-� �-� -� � i~'-� ... �-� .� LJ. ... l .... t.-~1-k-1-.l,._- r.-�'.-~. t�.1�.t.1.���..�J�t-1�~��1� 1�..:-;.. li�.-:~..1.k.-!.1~��� !r'��-�'�r� ��.:I�~-� r�1��-.�,�1�~--- t-1���-�-���/ 1�r-11---J--)�.lH�->-::.-:.' .�:-1.�1�1'-��.1 :.-:....:.�,.1.."_'�.:-:�. ~�.-.:-1.-n<,:i:-:.-.,--:�. fr) r 103 ---~----------~- ~--~--~-----�-----�-..)
CT..i.\. CM"E NO, 4721 �:-.. t�; ,�-t � �� ~.i� � - 1937 -Deficiency Income Tax �.::..dd � T.3..i2~:: .~; D1J.tie:: �� p 13.14 ~:. ::. 9(J9 0') 12,2 (JC:,_2�1l.(Jf) C:?.pitZl.l E::per~<iitu re.: I�f::?t �r:~J~-ia.t)le Irl;))!L1e- p l,22?.,69d (J(1 T:::.x Due T1Prt-('n p 1.970,246.(H) T:::!X Pa.id Defkie.ncy� Iw:.Arw Tax ,.::,,dd. 2(::~; Surcharg._,e i".dd: 2 o::;; Inte.re::t frcrn -r:. 4- 16 ::!, t�.) 9-2 1-G��;1 Cc-mpr(Tni�;e F�'?.nalty TOTAL AMOUNT PUE ANP COLLECTif:Lf: 1987 - Deficiency Sales Tax Nd. Ta.x:::t.ble Sal.:::::; �6...dd � Tax::Jble S::Jies tn �6.FPCES Adjusted T3:D::1.t.le S:3.1es F~;3_te ()f Ta;.i Tax Due TllE.>reon p 3 1. 3.~. ;.. 5� 46. 5.~~ oot, 22 Le::s: All�)\i.,t;;}bl>& Ta~;: Credit ,:::~,2.71 T::J.x Due p '}..3� 76.69::.. 62 Le:::::: T~n~ f>;::lid p 1.::!,9.:)66.3(:!, 4}. �:~,4f1 � ~.�::~ i�.d�:i: 2o::.;; Intere.:::t fr.::onl 4-2 1-/::.c. tc� 9-2 1-69 C�:::.mpromL::e pen3.lty TOTAL AMOUNT DUE AND COLLECTIBLE p
DECISIO, .. - C.T.A. CASE NO. 4721 -' 1991, re.spondent rendere-d her de-cision de-nying the protest for .--~'-T1��.�::::.f-i.-i1;A-.-t.1.. .-�--�i�IT inr�....-��~�� �rn;:..... tax but t11e c�ri~;dnal deficiencv� sales tax �-t I (.<l_.FPCES) c�n it-'=: purchases t-,�:-:�,(-.��;:�-:�:.1''\l.:-:�:�,.d.... 1-'��'l ~ !n�';:�:-�:.t~�r'tll_". ,.�--�)t'J.-P-� !' .---~-,+J>.j1 F..�-:�,i~-�--J..qJ-�:��:-��.r�\i;r f�:-,�.. _1(_i_t_{_-}_ Hence, tlw in'=:t:mt petitkm filed on� Ivlai"ch .3.. 1992, tt"�,.::. t�:=� t-1..--;:::.11-~; t1�.---,r-1 ,.-.,!- ,--1.:::. fl. ,.-.1� .::::.r-, .�-.�--i~T -i~.t�1r�......-��-,�t�r��.;i.::�:-�. t�=n-' _..~_,.~,."" :=1 !"1��.-+i d�-;::�-:�.t�l�,�-..-1� .�:-�:::.�!�,�,---�-I~! �c-:��:-:�,.1.i. ;�:-:�:.��-:�' .V_..,.,'..~. r~ �-��- ..1. �-� ��� J. ... :_._ �-� �-� -� �-�- .t. �- �-+ �-� - �-� �-� � �-- is li::Jbl<?. t�:) p:3_y defid<?.tY:y in�:::orne tax in the ::nnount of r1_�..c_-,.c_�,.:._:.:.:_.�c._�,c�tI��.,..-:.�:.:;.Lr�.t�. t'C._�..�_:�.1._1,_.:�:-,-.--���-j� i'_.;.U., t�;._:...c_,�r.�,.�_.��,1t--.(l-;-�:.!-)�-t� '--~'�,=--f��-:��::.ll�-r_��ct� n._;.:-:.:,.t._'f.1-1..-'���--�.-'t"l�.-:-:�:�:.t1-;!-1 t�t.-',.<d-:.:-. .�_:.�t"_t!~!-! (.'-!' " f :_1 ..L p-s-tEt.lty. tl-, .-. .., F' 1 r- .-...-, r� .-. ~� l.~ 0. r�,-!_�r�.�_":�j_l...t.."I"!~� r.)�...f..-~ ~ .0.,.1~1-'-�-l� . C) ' {��-j� JC)' ...:). .1.. () (; 't='.t-' t::;"c._�.t-::-:-r-tt-1� ' A�.}~;=f, 1.!l"lf-' .-. t-r� !....-+l�-n�.t.-.1-� c� ~r.--1 ._.! �� )'.)l. -� ��-� �._.. (:ompensating taxes paid on v;:J.rious import.:ltic�n of machinery �-r- �-r- t-:-.1tlr�-�l ;�-:�:[:....--Jl.l'l.r�-r-'�t�r�it:rt-Jt, �l.t... r\f'.-.---.1.:,:.1.,.,�-=.,��-=.1� �1-1-;�:-:�:.'��-�1 �~:,.c._-. fl� .�l�~/:-:.:(j �-:-t.c_c..-_-,t-:'-t----=-~� J) 1�) -l~� Lr_-.f-t:-;!�"I_.t.t...i.s.(,! 1(:? . t�-1� �;1::-:-. (._�.f."_.'�!}tO-��:-:�::.�t1�t't'1�--)�t"l ---f 1-..'.... !-;.:_:.:._.c, !r-,�-�'-..�'1-11--.-'l:7r-r1�t-� t-�r1�-�J:.t-� �c--�1't-1(.'_�;.:.:_:.. r--���;�:-�::.tl't-t�",�,,_t!--;1::-:-.1- r��---�':-.'�r!-���t''t-�:--�-f��ll'ry....:.:.,,-'-�-1 tl.�lt'c..�.. 105
DE..DSIOi., - C.T.A. CA..SE NO. 4721 - Page 4 - t� .:�':�.�t��"-f�l�rJ-1�r't~l�it:':�'t�1t_..t.iri�o::.:-". C._.�,�:-�.�.t"!".'i=.-"..'��.-.�.:-!!. "t�!-L��.�J�t�� tL-'.'=.-". '��.�ip�-�.'��-�l1--J'��-���t_.p._..��._�l ��.J��J-��lt�t. �l�:,:-:.,1t}.t. .:-�,..�;:--' .d- ..t�t .-:.��,�'i;r;.-J�'=��"�1�1-C.���p~. In ;::v:lditi�:)n_. the BIR has is:,:;ued BIR 1-1t�-:� :.t�--�~1.1.1-1.�.--l.�:.�:.r� t.1� 1A�~ ,-. 1r,..r�.-.�-,�~.�,,1�c��-1������-�'�r�1 �-� !- �~~'�~'��'(\�' ��=.�.tr�1��.�.l r�n�-�l�t��)h.-J.:-:�c--� ����l�tt..:.:....-�.�.! tL- , 1/ � 1-����A�.� tt.�.t1.��..�--��,t1<"::'-�t� J t.-��, �v � 1. Section _3.0((:) of tlle 1�)6 7 T3X Code: -sECTION 30. -..:-- ":7 -..:r- ~ .. 44 .C.a., (c) r:a.x'3s. - ( l) In general - T:lxes paid �::.r a(:crued ~A~it.hin Uw t::G�m.ble v� ear in -:::.::mnect.ion V�lith the. t3.iq:�.;:~.y�e.r's profe.s:sion, tn.lde or business, t � A .�. ,t;.71.;-"-��r~��r--��-�� Title.,; r r,_'F,_.. .�:i 1.'L,-�-.--�'-�'!11�t:-:.!_, -�~.-,~..:~.. 1� !,..}, t��1-r�l� t--~=� . ., r1 �:t. ~1._.. A�.�-i�:�..-~_�-1-7-.--~-~= !--) 1�� '��-��r�1� t-�-�=�� .,' t:::.,_T,::.�=: ~~-\.&.~�-� �-� .i..n1rur��1� ��=-� �--,~::�.-�..-�..1+ t~---~l~r :�-:�l._n.. t'-l� -1t__�)r�-1�t�.F1' ..-lr� 1 qr� ~i ' f.-...-. l..t. -.~...l��;:=r,r�1 .�-.�-.-,.�--�-,..,!.lJt. ��-��tr-1~r�-~ 'J' '-� but this deduction ~tr3.11 be a.llc�~hTHl in the case of a r1..-1t t-�~=-~-.:....,:-arJ)-��C;;..,Tjrt=.;.-.t� ~.'\~'1�1,.-....., (jf-)�-(�::�,..�1".:')� - �-� -� t=l ��J::1�~,.111�f~l;r 1�1�1 111�.--~. t�;�:-:�;...t.n._.t�!-1 1�1..i,�._::. d~~;ire to llEf'iiB- to amr extB-nt t11e. b~twfits of ..-�t�p.,.�lft�=� ' ��-� ._. .. �- .nr-��~~-1-t��~-=--~::;o:,t��'-~�1rn�1�1 r-::'1 ;��,f t.t.-.J11��=._�, �-=-� L�'i.t��.�=�-�:>... =._.>-tt..l...(l!l f\.t-t.:...:. .l~:,=.t...t..it�lcn~ t�,.-., l ...... "1. �-�' _. .... .. 1 {�,f r�..-�,t"Al.C'!-1 �,.-�,t- t:-.~.;;::.�=� (/l'11�ltt�i;:::.�:��~�� �-�"" -~:J..i..:..�...- �-� .... --� .J. �-� ;~ �-� �-� 1_._ �-� .L �-� �-� ... (C) E::::t~ t.e and gift tJ:::e::;_; 106
DECISIL...j. - C.TJ\.. CAJ~ NO. 4721 - Page 5 - (D) T:::mf.-s ::Jsse::sed a.gainst h>>Jl bendits of a. tind tending to incro&ase tlH v::;Juo& c�f tll>::> property ::1s:::e:::�::ed: :::1.n d (E) Eledric energy consumption tax impoE:ed (_�� y~:' r p,=i (~":-i�-��:-�� IJ.>:'-,�1� �;~�lt�t.-,:\l_1.. -i':-�-�1:11_, '"'�t��lio~ . -~ (, � - .... �-� . _.t �--� 2. Se(:t.ion .:)CI (.lf Eevenue Eegulations Nr). 2: -SEC <..1-tl Tax-es in ge..oeral - A; :j_ go&neral rule, t:txe::: are deductible Tvvit.h tlw exception of those v.ritil resJ.:>ed. to 'i..Vhich the lav.r does not permit d<?.(lU(:tit:)tl. Z i~ X. ImJ::n.xt. �:tuties paid to t.lle proper custom:3 r-� �-- ..- �-� -� -.- �-� �� . ,--,1-fl.( -~� .::.r-:: ::1 t�1���l !~--,�1�-1�-��-:�J:.i!lA-.��:�-:���:-�'.. (�-1� !�-Y� �-��11--- r,�=l t1�<"1!1 11�r��,::.t�~.-.-:'�,::. rn-� t � i� ~�r1'l.=�:->�Cc).'-<-=->-' �--��-� �-� �� --..!.. --� A�~�':a-.:a.-.��-��1� .;-;::, ::'J!"i(l r-� c�t�:t1"(ir. t.-.-~:y...;..:..:._,. c�--' �'-:�t-!"l,-�-.1 :r::.l.!"lt':It ,�--�-,-t�}}�A-� f t_�..:_t.~.�.:;:.:.-:.�.�c-;� ,.-.,!- I A~~,::.!-1' �-'��� .._ � �� �-� ._..__ - �J ... � .... tEJ.me or 1El.t.ure paid diro&ct.ly to tlw Gov&rnnlo&nt �:::.f the Philippine.::: or to ;:my politic:::1.l :::ubdivision therec{. are dedudit.le. T.lJ& H-�lJI(i '{.:7~l?S" JJJ.>f:'.:YJs� t~?.:;:..p;_;;- ~.f~t~~-~[}..p..t� ell}(/ .t.l-(1 (/.~-~-ill(�,~t{J.t1s- :..-;:/1-(,i.l.l(f _{-).f-1 .:"FJ�~l(' !--(5f'.(i .i'{)J- (:?l}J.(;l!.t} t.:..;� 1--~r~~-~.ps:-&.t} tJ~fJ.f.:�� Jj'Jt?.l:&s-~ s�llJ{~:/1\:-?/~:-:&:. ('.Jr ~D-fll.l~?/tf&:..-;- JJ:.lf~f~7&1Jt t~_., -~�ie.J~~ff}.-:_lltt?.l.lt"~.;-~ ~{ :i{ ~-{_ t1 "T1��;:::. ( (i' te- l ..... .... 'L�l,=�-�:t�.,.-...,t-.r.."l ... L�1t....1� .:..:.:.;..�_:�, r.r--.��\:.,�.11, � ,.-l t.~l r :.:C>.\ ,....-...,...-..,L!��r�-1�n:._:-\ �r�1~I;r ....-..-,1�1 1. .._. .... irnport::1.ti�:::.n �)f one ( 1) unit 197::. For.J LTD-4 door :;edan. t..:. l::u:::> u::;ed in t11e in::;pect.ion ()f its prc�jed.. <-Jr<?. U.tLd e.r :-.:.ect.'.1on .y- _.-n..'c.�!, .:! e.::.i. u.c l:_-."1Jf=:1�ke ~ n:m1 L'tS gross l. !K(:.tne. 1 ,-,t t1��,::. � .1. .�. l-..� 1.l.::-.-;~..a;.-,-~�,�-,-,�.-�1-.+:�.-::�. ::_1__�_=__: 1.1_i"1l.r.-,ll�;.�:.:..Lt�1---P-�':l.��-l..t�,�-::�..,j t~--,-u" � :_::;p__ ,_�:t_.l�,:_)!",t. T:=i? F'~;�:-:�.c;=.-�1�-1�}\�-;�- t.1-�,..-). 11....:_:-.. I t-1 ..--r-.r-�lA ___ ..,.:. ___ �-� J. �-� "In reply tlJ.erE:-t(\ I 1Et':72 t1"1e 11::)!}:)!" t-::. inform ycu. that f�)r incdne tax purpo:::e.s.. t:J.x<?.�:: }>lid ,:=:�r tl--1,::. 1.!1 (f1!"t!lPr��th",t1 t�=i'-!':Jt-,1,::. -~i,.-.,.-.!-'14.-�l ~:.!l�H-Il�t-1 ~,-.ritkl 1...., �.,� '�' '-�� '.,' '� II .,�.:.- .:.. �.,�l. '�' t- '�' � .~.,. .:..<&.1-, 'l:!,:'�:'>�..�.�:,.Jt. � '�" '�' ... '�" '.,� �� �.,� - I I 1.. .,�i the t::c:{pa.yer�s trade or business ;;:.,r.s- deductible 1)Uf'3UJ.nt. t) Section ~ ;:,O(.c .H. 1) of tho& T::tx Code as ' ~ a.me.nded. (:::ee al:;o Sec dO, Rev. Re.g�:;_ No. 2) Such fr<��m its 107
DEOSION- C.TA. CASE NO. 4721 - Pageb- <i'J:ut-s-rly gr��-:-:: tn�:~.-:�m.::-. :::nell bu:::int.-::s t=Jxe-:; 'i ~>)tEd:;ting ;>f the ::_idV::l.11C9 -;aJ% ta.x p:::dd en the I 1mpc-rted rav? rn:::1t.erL::l.l:; used in tli.e n>:111uf::1d.ure (:.f it:: fini'.::hed pL<lU.�::ts a::: �\��.7>?.11 a::: t11e :::ale; t.:::Ge::: paid t)!l t.lie ::::::dd rini:::lleJ prCd 1JC~S i..-,;hi<::l'i .:t.re �::�)l'J by it .JiJring tlle t::ca.t�ls- quarter. (Sec..:::�~�-� T3.Z Cc..:le). ~�ik�rec�'ler. mating �;udl declucU.:::�n v,rould not i!r:l�:::>l7e :3. �::hange in E!�:�>:)1J.1iting rneth(!d rer:luiring the prior con:::ent of the Commi::s1-:::�ner oi Interna.l Revenue�� Ev�en assuming tha.t the CEtpitalized Custr:)nls Dutie; and item in comJ. )UtitN�-� ta.x:j_ble inc�)me f.:x the g-i';,;en v" ea.r. i p�, nr-(:�.t� t-�;-:.c-i -ri-.,. ;:--1� c-1�11. !"1P� .!..;.,, ;:-:1�1�1c-l ;:-:.(~11-1�-i nr~t��r-~.. ;:�.:.:...r1-t c�;:-:i�!"1!.1�0t�. :=--�t t�. t-.l�,-A-� �:-:-::::-:-1.af-'1''"l..~. t.1� !l"lt;;.�" _ _ J. ... paid on l�rI�l�1rY)�r+�.� a.nd ' �:>tl�,�)tl . t.l."..�.tA�-�t"A�-�;���-,�+!h,._~. ;tr !"I�l,:�:-:�.��.::.>1.+! ."..;�r~� n f.-..:. ,~l,:::.f'!�,:::.,.-.1� �-� A~-q:;>=>t}�::::A -'"~'f-:l�t."A���:-::.>J. �{-l ;�-���,'~.�'-�A!" t�t.��il,::�:-�. 11'!".A... f�-��r!� ._... �-� ..., �-� --� ,_{_ -- �-� a..a. -� .... o,.,r �..r H-lA 1. 1.�.1 �-� r�J�..�..,'C.-.1..,...-..1~~1;.-t"t-��A~t",1=l 1��1-~"1l-f�'o...(.�,t�t-,�:�:-:�.;.��fl.. Tl"I...A�-� !"l-l�ll.l"!C;::.i-"~ ...�...l.t-��A-:� r�-l [..Y.� ';:7 .r[-�'.A�-� t-l�'l-'-1� �,�--��,t'lA- !' !"A�..� fA.�.!"C..... t..t..�.�..,. import:J.tic�n of El.Tvv rnaterials to be used in the rnanufactu.re of finisbed products a.nd not to c::1.p1t::tl assets used t�y pet.it.kmer in thP. rl.-.�t....i'-:- o.(+iJ--v-ti-;--:-r.t.�l i"...:>!. !--it�1+-=--:r'lP�- .(-l rn�r-(:n-��-.i.l1-C�-t:-::-;. _... _- Cur inu::.n1e. ta.x st::1.tute i:; patterned 3fter the Internal the TJnited St::1.tes interpreting. as 'Hell :::1.:=: the ruling:; �:::.f t11e pro.per 108
DECISION- CT.A. CASE NO. 4tl1 -Page?- ,�..�.,!�!��i�,--��1�.:�~.,J�.�.=.: 1�1-1 ,-:.-,�t1�!�,-.-� ,!�-..--1��.r1fo_-,-_, t.1���;�:�:-:�..1�!. 1�1��,,.-,�.�--. n�al.::.:... t-~.v �c-�:t���J:tn...t_.,.:_:..:,. �h�:.~J.\,!.A, [--��.�.:�::�.-,�����111l�.�_.~J~- !-.v.-lft�._..:.:,:. 'i ��'�'��' I in t11e Philippines. (Wise & Co. v. Meer, 44 O.G. No. 12, p. 4817; Madrigalv. Raffe-rty & Concepcion, 38 Phil. 614; Zamora v. Collector, L-15290, 15280; cited by TOMAS P. MATIC, JR., Income Taxation in the Philippines, 1979 Ed., p. 67.) Our Se�d.ion <:;o of Eevenue Re!u2"u.lations No. 2 ~Nas 1T1�1�---1� that Jr.)�,_�:1t, t-<�--=�-.>--t"tl�A-����-��l:�..:.;,�t-t-A��-�t-� r-'�'r�1.:-.:_:.. H�--� t�l1�t-.��:--.-,���-l �'-=':'.-..t:_-1:, t.�--t~:f�.=_�: Jt.�-r:�:-:.o-.--�Jt,l_1�_:t-t��'�-��)rf�.c_-, 1�-'l 1 '�-� 1 r_-.-��rf�,_-.t~~,''1�r._�-t._A.c,_�, � t. -� "1�1!�1tr-�-�'�,�-���,r�'t�� ,�--�,r� t.�.,:..-_t.,r�1�1�f ��..�.i1-1t'1�'�'-:;�:-:'.._:�, r-����:-��1. �-�-..1 t.�J.�_�.t t..�l�1"�...' f-�.'�t��I�.,�_�,�rI.-.JA... r� r'.�J"'Jl_c,�.--Jt.�-'�.-�.,Ltl�1-�=-'� �...�_.,�ff1.I'.-_~--~r���=-�'.r '':=,\"n.�._�l 1�!�1�t-.��:~�:-,rr�Y�-:-~l .r.;.:-.;, ~.A.. !"i-1��1�A.� ,--.�-�-~,--1-.~�l-A� .�.---�-t��,--�~!-c._:. �' ~-,.<~!A.t..�.:::-�. r�-l+A�-�r�}� lV__-�.t,.l-��t-~.--,J....p�-�. ::,.:- t---~~-�y-~p��.-�c---~ 1�r�r�lrr...r�-,~c-�-;~:�:-:�..�-d� .~......,.',;r ._._._, .:._::.. v��rr-���.�.-:�::.t��� �.-:���;-::�.��-:�� (._�.,t� t�-t-~L~- tL-.,1-''��c-���i�1�.�-.-:-::-..-:����=-�� t._i. !" t.1. ��L.:�:�-:�. ,.-..-,c�t �"l!. .�:_, J�t.t��r�.�.l.;.;_,.c._-. ..._--.r� t.r"1�A,t�l ;�..-.~~1-.:...,.,_.t.�1�.r."ll..._:�.,:.:,;. -._� ._. . ._ � �- ��-� wA. be sep;:.1.rately deducted The option referred to the .r&tU..tJ~ deduction for inlD� �:)rt dutie~: tn the treatrnent of such dutie-:: ')11 the bCn)l�:s a.s ((:.::t (.{ invent(::.ry'." (MERTENS, Law {)fl Federal Income Taxation, Vol. 5. S 27.25, Chap. 27 - Page 53-> Even :3::=~:uming :::;s' petitvmer c:lairns ttt::Jt a re1.<er::::~tl ~)f the depreda.t.ion charge i::; added b:::v:k t~::- inccme bef()r-e- the ,-,1� 1- ,�---�-�-;�-1-,��.I.-1i_f."�-J��l"t�'=-�;�t-l��.-��.-,�I��1. -:.� 1. t�1,-.,-.,rf-1A lit�l f;'�t�t�,-, ,-.. t~-iA �.�J. �-� .1. -:..��.�- t:~�Y t.�tL�l�..~.. 1�.� .1..1._ �� � y�.:::.r�:-.tt�;~ .��.-�+l ;�:->��:-=� !t"!11�!�1;~o�c-'-.��1, _..��_ .............. ��� �---�........ ,_.... r�1 r'�1�=-tr! ':�:-�)�.-v"-��(11I'_1_1��t�A�.� .--."l1.t�"l 10?7 Al_!_ ;:,,�-t ir'�',A�~� t-t�� t1. (;flAt� ,-.,.-.,t�1c�i h1' t�;:.,�l1l �-� '� ��� .._) I . T ~ �-� �-� ~ .--!Ar�-~, ~;r j. .�� �- (Atl ._. .... �;.� ..._, -� ..... - �.�.;. - ._.... �- �- -� fo.� / - � �. ��� ._.... f�:)r the. V�i A....._'i..t..". 19d7 109 )
DECISIO~- C.TA. CASE NO. 4721 - PageS- 1�..:l�:=�)- 7 tl-...,1;.1' r�l:=-tt. tY�1� t�ro �=~ .�-�-.l�.:.::.�,..+-i]�J....-�-.�'f"�.1..�---�--.,1p. 1 �-� -�� 1.1.! .l i=t '-� r-�,etl� r� t::J 19E;7 the ar.nount of - - t-1'(->1.�'~.: f1' (�1� t-_�1�-~� J. �-� ~��t�".!j. .,...-�"-��llY �C--:"~-1� 1~�-�c�:-� -~--..~&-4!. r�(~�f" in ... F:. 11 r-�r� �-.t.::.c-t t �l tl�.:::. !"t.:::.r� r�.::.,�llJ<�c.. r� -~. ._.' J.,�,.!..=.~..(�(iI'�'-�')�-�;�:" ~ ,-J~. .. ( ..�~��-'�� 1.",'~--':����-=�' t"t'l~.�,�-.�.l .' !:�;�'..c,�;r!��,"(��' �r���f�(�l.�~�t��! , ����. �-��v�...... !�..� J.J. ������ s �.� -.- .o-....tI��Lt-"ilJ.t"l. r�'' t...-.-)� F) 1(=j��'-)', __�j_.. 1''-)' ..(..) .-_~!, ,�..-�..,......,1.!..,[-'.-tJ..t...~.. .�.j .�_:j. . fr��tl(\1,\T'<C�-.�.� {�.[i . .�-:.:.:��=.)- 7I�' Lt:;Jp�.� !�.�:.:,:.,.�-,.,) "Net Taxable Sales 1 f, c. " n.t" .�_:-) 7 -~� Rate of Ta:x t�1.._, ;'�;)?(C.!I J '�' _}.(}.:~:1. Tax Due T1Hre�:)n .rrf.. Le-::s: A11�Y/la.ble Tax Credit 10% T::tx Due f> 2:.1 . 2(;J,3)72(!_~)0 Le~:s: T:::r::-: Pa.id Deficie-ncy Tax 22,()('{).{)';12.71 Add: 2::.:;g: Surch:3rge p 9,2f�9,{)7.::,..:~.7 us q 7 -~.07.44 102_.~>66. 4.3 2C:.641.60 Add: 2 o::.; Inter~:::t.Jrc�rn 4-2 1-f�f) to 10-21-90 64 104.00 TOTAL TAX DUEt~ COLLETLE:.LE :p 192.?.12.(:r_�;; =================~ H.- FF' d.T'�~'1�1�1;,:.:.,:..:-=.. t���:1-.t�l t.�.'�;�;'1.�� 1ll-.1�.i.��~�� -� �-~ t-.�:J.~'�:~. ~�.�'.~,;'',.'�;;t' �I�lr1�.!t1.��1�.�)1�l 1��.}�1� ,.:..u..:.l,.l�'.;-;'...;-:.. t�J��.l���-:.~. -�.��t.�.c... t�.(�.! t.~-i�lt:~::' 11 J. � 1���=-1��--�=--�n.�:.:.�(~l 1'�(.�~:-:-1-��=-�� r.l.11-�.:�:.�. t-(���.,� t1-��1.:-:..�. ~�.r,t:.�...--�-,�1�1~�.,.�.-..�J�t1_�_=._-, t...�.r:.-1�.~y.~ ~I--...-,1. 1 11��i �1cc�.��=-�� 1�1��1-:-:�1- (1�..~- ~J..-.. .lv r:-::e-t�t=1-_.1�1.1 J. r�,:::,�=:lllt?>tl q._j. ~-��r}-.!.r'��i1'~t...��:.�_. ~.��a,rl�l1i�(.��~!�l tl�l,c, i't;.:_; .�.._. �-� ����� .. 1'1�1� .�. ._. t�li��:._�'.:._'i_ll(i �,,-..;;,,�;:�:-�t-!"1�.(.�.;.:.., (._.�1/ .~.-.:�-I�V-�� (.!"f>.. (.A1- . 1l0
DECISIL--�- C.T .A. CASE NO. 4121 - Page9- Petitioner r:::redited fn::�nl its sales tax allovred only the sum of P22,(H)<3,852.71, thus the balance of J I :P 12,'\734.70 ~.~las disalk:rwed as a dedu.r:::tion, itf?mized as foll(iWS: 'Nant.er (J~>hilippines) Incorpr:)rated - 19f.7 ':,.-�1'1;:::.,.-inl;:::.- f..l..\.TI;::�J:.t� I ..E1'l"(�,�-t�"l;::.:_..(�.)1J-��=�--' T�=�1-�'"-':.~. t~--.... ,l'lll't�lo-_.c.._-. r�.�Ll'=�'-l�t'�!�;::v:. 1.'.l.1LT ,-.�..-..;�:-:�:.r�t-_:.z-..J1. '1-1 �C;J ]J�nI,:n" }I;."i';:::....+,. .1��--:-a-. t.J ..... �-- ._ - ._. . SUF'F'LIEP.S COST TAX ALLO~.�lAP.LE ItiSALLO~~TABLE REASONS FOR :BILLED H3ALL o-r.uAlKE 1 Standard F'1 . 1:32.00 Contr:~dor's Ta:{ F'l::tstic �::o:cp. P32_. 21 8. 00 F' 1. 18 2.00 Bi11it�~.s 2. Fiot::dlex 284.2? O~"LY 1.5�~t ig (or�p. F'.tdls. 2.. 842.6:5 a11o','�'~J:.l!? . .b~?it~ sttpp1i>?rs (G>?nt<ra1 tf-:-:cet.,mdis~} Inc. 626.21 :H ~i.ll 31 ~i.l1 - do - - dcr - 4. f'E-:~�:E- f'E-1'l 1.. 758.45 852.84 905.61 - d.r) - E:ntl?rprises 56. 856.45 - �iO - 5 coriii.3 Sa1t>s 3!;;0,.429.76 11 . 66q_60 \706.45 5. 96:3.15 6. F:cc�nUine- Lit�~.f::a~J? .- Inc. 7_.602.. 6:~;0.70 228.. 078.92114.. 039.46 7. A~_ana �2i:cc1e 983.84 Ef1t ... It�tc~. 65. 922.78 :::. iJrl:slo Enf.. 59.. 902.54 5.. 957.46 398.54 i.-053. 92 P128, 7~4.70 �8.n investiq�-�a.tion conducted bv" tile examiner reveal:; tllat 111 /
DELJSION- C.TA. CASE NO. 4121 - Page 10 - ._.a �C-J1. 1.::.:_:.;.:�:;,.:.:.,.,..-_j. t.<.1-.,-:..1~.t.- .�.-��.��.it�l/~~ ~.....-,�,...,.1�,:-:�,t.:-::.'_. c��1��t:�::�'-�:�� ��..�1�!� H--.,!;ll�"t::�:'t�c._�. t_-.:_:.:_..~.~~ pa� .�l-(1 ..-_.,..-:.!.�11h.,_.:,_,. ,-.-��.��r..e_.:�.._��lt".,te�.�j Tax t:redjf. - (a) Credit.:Jble Taxes: - i",nY s::-~�:1::;.:?., :::;:}h::.::; (::.r mill.:?.r'~; tax paid und-2.r Tt.t1.:.::. tt�� T{fJ.l.�:~�.::�-.� T' r ~-!Vi 'J k� ,.-.,1�1 .. -�~ �.� l~;r , ,�..-�,if :-..--~~�-1>=> ��� ,�-..-+l,�.����-,rr�l.-.:�::�-.'�:1-_~.1, ,.-.,.,.,:_~_ 1 - "/ ,_1, �- ��� .A.L�-� �-� -.� �� �-� .� l, i-' nr����,(l' ,��,r� ,�,tnt�,;;:..,�t �l�r�J�.�.~J t't-,- r,(�,t�r� -11!"" 'J t"� 1.J'.l��.~J. '�-� -� '-'.- ._, '.. �' Tl�"' �l,��,,,_�....,.�,�;:._:...�_:���._:,.,;�-;�:.��,-�l .. I�' �-�� �- '-1~(._'.A._.i."_l �., ?>(l _ .._.._ �t��'�~'�i~., /'IT J.! r��� ., 1�' t...}l'~-~J.t.�-'7'!;�, �..i...:~.. !! -=-�.. lr)�':=-.~1��t-�.. :'1:.'�.�.�./-......~,-=�---=��-'�-') l ��1�' !�,.)'t-� tl~~ .tL" ...:;,. ,_ 1___ f::! 1" 1+1. '�) '- "11 )'..-l: .... 1 � � / f- � �1�.,- � �1 � �1 tl�- rt � f � r 1 !.C r)_,_1 !;:,_~:;~:._ () t� 1�11�1� )=)~ ..-~~~ tt--'nl .-lt' 1I-l;.:1..,!l_l_1_!df.-i._�:tp��-�.t�~� !' ~").tL� �r�,t,-, ,.-�..��-�-.,-.l-lv~,t�:-:�:t'��..::_�.i���..�.�-�.t1- .!. ........� ��.�..�.�t- _1�11� t�'.�"...'!-1,..�i't�::�:'��.�. l t_(.�._) t���--~���.t�r!-1 r-_�.�.-._:tJ�t_. (�.��f ��:-::�.+-�~1'/' 1��,,:::. . 1 1-,.-.,t- �1�1!-1�'��-:;�J�-j;:.�:..;-�~,lJ. f.��)!�,..�-� .�,~,-'."--ln� �r-��t-� -~� r-~-�:1-�1?'>�' ���1"1:~11 -� �-� '�-'.l�,:,:_,.,���-ll'j-,�:-:��:-.�,.-�-1 t'=1..Cc_',:�-:�.l1.1."..l..d... .;) �-� the sa.le::: t:c~ on ;;t:,h_egricourltiu'2�-r�'ci:ntlal :;:;;::1.le of the finislwd product, excr2.-pt products: .I~t~or'./(/-:?(/ .b:(�H-::..;.v&l: T11at t1'1e arw,::.unt �:::.f :;::;::J.le::; taz ;:::.11 .::l.:�me::tica11y pPn::l"L;::ised ra_,,...,r n13.teriai_ p;3_rt or acce:::sory_. i::; :::eparately indic3.ted in the sa1e:3 invoice. . In the ca:;e of DlJ.f(:ha:;;;. c�f ra':..>l mat;;.rials.. r-)arts c:md a.cce::sorie::: f)v a m:::mu.fadu.rer frorn a du.lv regi:::tered and ac.-:':redited dealer, the amount of tax' passe(! on tf.) t11e dealer as v.rell :3.::: tlle sale::; t3.X on subsequent ::;;:J.le. if irKlica.ted as sepa.ra.te i~.ems in t11e de;:J.ler's sa.les invoice sllall be allov�.re�:.:l as credits 3.gain::;t the :::=::,_le::; t::.u~ due ('fl the finished product. �~'1.- n/~� c._-~_..._�.l .~.~.~:l..t��l�..-...'.:�;:.' :.a..-.. 1�f�::�:'.c_�-'�t��:J..�-:~.. f.-"�=c.l.l�.._��1 '.�-.-'t-i l.Hl-f.-lC.' .rt�e'�:��.'���j .~:.t�tJ.-.,_�-.�1.-:..:..~-. �;ha.11 bE> a.lh)'�'�lE>.-:i :Js (~:r~?dits ag::tinst thE> sa.l.s-�; tax due c�n the origina.i �::::Jl<:> of '3U(:h irnported article." The cr>?.dit of c.-::.ntrac:tor ::: tax V�ras not pro~lided t1"1erein. Fo11o~,q1ng tlw a.(cepted prindple ,.,A statutc�rv� construction e.xp.r~ssio ll.IJius est e�..:llls.it? a1t~ri11s "V�lhat. is not included is deerf1ed e::~du.ded", the sanw (:annot. be a1lov.red as a credit from the sales tax. 112 __/ ..
DECLq01~- C.TA. CASE NO. 4721 - Page 11 - t:lx 1�.~?-a.s billed - ~;epara.telv a.s a SH_:.;::tra.te item in the invoice. Thus,� 1 ' .~_~c-r-,�.._-..,�1-�1-1r�_. c���t- t,t1-1.:�.:_:.. t���=--�~.�~-~' �c-�-1t1-1�ft_�.�e�.�.�_�1 t-����-�� 1�._t. ..,,...,t�,t1tl..._~, l-l� t_. 1-I��:':.:>~.11�1-16~~ t_�..�._�.. ����-�1v��� fl-l�rt-h� "��'~t� ��1��� z�;::. .-. !- ;-r� [Ilf.'ll t�-t t1� .-,1�1c: ._. . } } - � .....: ...� 1,_. �-� t.t...�_�.f f... !:::" t..!:.:-;.! t"l-!"11.11t':�:" t.1� �1 f'':�:! .o.:.T,. !"!"!,;)�]]�1-l�t..- t.l.."t~'� tl"tO::.!"i �-�'�..�' ,1 �-� �..� tl�!;::. rn��11-� t�nr�r� ��)c-~-'=:'_:�'1 ""' �-� ~>f the law is ;:.Khie,led. The reo)urse of the q�-�overnrnent in case t�- r-� ., tl- .-. .-..-. .-1 �1 -. r�r- -. r� .-. t' r� .� i~ '�..-��..' ec��t_. c� .d.l"?:aT. ' ,=~t,t.:...,l.._: 1'-...r t_. ) { } .1� �... t~-) P :..1.11~" c._�,J-l�rr.�.'1r.J11�;~:: 1l !._':;:~d.l.:...:...r� 1��c-�' t..,_-...} ca/'�.-J. 1 "t�t-����1 ,-,f Atlas tJ�e:. �:-~��.i-:),'.~�t.:>1.11.,cj�t... t�t-�1.1::�.:.... .C_t JJrn��rL'�l�l�.o:.:...t� l/;1._ .:.:...,;�:=:l-l..._:.:.t-." Po.:_.:.t..t�.t1...�,�-..t,tlo:�.:r.t� '-" f::f:�.. 1�..� ,.�_-.�,_�:1:.-._c~��,-::�. ._. Fertilizer Corp_ v_ Commissioner. 66 SCRA 165, as f(;llo~.,ls: "To repeat the rnain issue in the c:3.se a.t b:3.r is Vllwther the i!.~FC is entitled under the Tax Code to d~duct t.lle r�urc11a::::e cost i)f t11e pyrite it used as i!-cv�:-.-r~dient in its rn:3.nufacture (.if fertilizer f(�r the purpose of .:))mpu.ting the sales tax it must pay on its sales of fertilizer. In expounding their respe(:t.ive posith:ms on this issue, the Commissioner of Internal Revenue and the Court of Tax Appeals appear to have be-n confused by their obses:::ional pre(:.cc:upaUon v..rith tl1e JJJ.(Jd&.t.ll.:11rnattf2r of V�lhether >)f not the ACivlDC had paid a sales tax c�n the pyrite 113 ) / / _/
DECT5I01 ... - C.TA. C~'\E NO. 4121 - Page 12 - it. h::1d sc�ld t.::! t.he AFC: Uwy failed to t:::1ke �::Iue '::tc�ct c�f the org;:.mio::: relati�)n�::hip ::unr::�ng the pE>rtinent �=�t�1d �-:�';-::.._�.�1�,t-fi.�t�_�.,t�l��:-�� �-�- �-- .ri�"�'�!,.��.�-.��~rl��.:_�.�lt_�.�,t�1��-:�� 'r.��,!f t�i��-1�1�-�::f ~l �=--t~v~ (._�.\�_.�,-.(l.~� 1�l..s-.,~:!��.��.�--,J:~;c-.� �~�-l .-ll��:::..--,��11�=:;::.(1', 1 1��,,.::.!�c.1� :-:-c.c_:t_.i.--.:..t�l-=_: t:~1rc.�=t(l~r �.�-'�"""'.,. L. �-',: .., .�.�. ,�..�,~J,!,_�. .�~.�f.(l �-,.�t�.:,.� '� - �.-�.� -��'- ...... ' 7 i 7 ',......, .~ -- "' [_�=,f:,_ - �- F�6-,i:., ::u1d U~<.(;::). a::: ~.~.re�li a-::;=} precs-pt. ;:pJ.it.s- t:;:,:::i�:: in tli<?. field �)f �::a.1e:: t;:J.Z<?:: Under S<?ction lf,t.(c), if t1lE~ .L.~...(l.-IDC v.,rzr:: t1w le�:see. (>i,-!JtlE:f �:::.r conce':;St�:)!Etire of the minera.l 1:3.nd irom V�lhicll it rem(>\led the nvrite that. it. had sc�1d tc� J. I the. ,<\FC, tlle.n it �;�\!:3.:::: &X&rr1 0t from f)aving :3.11V sales.1 'v f tax on its sale;:: of pyrite. .t..ny purch::1s&r - SU(h as the. AFC - of pyrite frorn t.l"ie i".CI�.,..mc rna.y de::iu�::t U1e f--�U!'(:llase (>/3t �A ::;1J.c11 pyrite. uw:le.r the. a.ut11�)rit;:r of Section 166-...-:\ Vlhkll pnY.rides 'T0lh.:;:.ne.ver ;:t_ tax-free product is utilized in the ma.nufacture or produdion of any article, in t11e deterrnination of the value of such finished article., the va.lue or ::;udl ta.x free. pr�:::.duct :::l"r::1.lll::.e. �Je.dude(l_,' "On the other h;::md. if the i-v:::rvmc v..ra.::, not qua.liiied for exemption frorn sales tax on it:: sales of py-rite under Section 1f,f,(c) (because. it v.ra.::; not tlie lessee. �:)Vmer or conce.ssiona.ire of the mineral land fr(:.m 9lhJch it rernoved the pyrite). then the AFC (or .c anv~ ot11er 1r~)Urclia.s>:>r of f.l,V. rite. fr�:::.tn tl1e. f�:)rnler)� ca.nnc.t. in'lOke. Se.cti<:)fl 1M:.-A a�:; t.lle lB-ga.l ;Ju.tll(:�rity f t11.::. t��t-:J� tll�' ��t� ��t� !.) '��~:i':�:';'-'.�:iJ-J�'���~��t�. l1-.1;,::~, .J' �~� :.1 ).) .... '�....�:-.)-:~:,+-�-� t) . ~ .rt~.�.'r}�l�t..,.).�:,;: 1..1_.- Ir).1_1.t..."r�'-�l1"o'�.:~:.,:':"'.'�--j fffcO�l!l'ollw t ht he3 tAtChlve!DlC~. . F. 'c H�)V�tev<er. it doe::; not thereb ve' (a purclw.. ser of pyrite fr�ATI th AClvlDC! is b;::J_rred from deducting th>::- pur(:l"r::lse cost of the. pyrite. from the. gross selling price c-f the. manuL:1.d.ured article (fe.rtilizer) sold by it. The �::ieductic�n can stilll::oe. m::v:le. but 1...1.w1er tlH a.ut.11ority ~.A Section 1g.(::. 1..1lhicll lT� )Htine.ntlv' reads: �x x x f'[(�ri:"l-&t~ TlEtt v-.rllere the a.rticles subject to ta.x under t.llis '::ection are rm:mufactured C�Ut c�f n1a tHLJl:; lite.v\~i:::e. subject. to t3.X under thi::: :;e.d.lc�n �=�r�1.-l C'-��'!!"lr..". l �._::.,:._:.......-.--t�l�.-�-i�!-1 ,�--.�,1-...tA�-� l"...ti...,.,\.1�!d..t...�..;::�.-,�-�1- '-\._...:_:. .1::';c:,.J-. i�1'�"hlr -fl1��-~,::. �' i ... �-� 114
DECT5Il.�1 � - ,. C.TA. CASE NO. 4721 - flage 13 - the. t()ta1 cost c.f �such materials.. as du.lv' established. slE1.li be deductible fn::on1 the gross :.:;elHng price or gross value m money of ::;uc:h manufactured articles.� Tlie i!}:)f(lina.te. attention p;::dd t�y t11e Commissioner of Internal Ee.v�Emue- ;:Hl(i the Court of T3.X ~Ll~ppe;:J.ls to the pos::;ibility tllat the iV]�.JDC did not Tr-)::J.rv ;:U1V SE:1.1e:=: t:Jx on its sales c�f r~vrite tc� tlH AFC , .. # bec�:)me:; rnore dearly .lfidl-n~o~s- V�lhen it is considered t.ll;:rt. funda.rnentally, tile s;:J.les t::tx 1::::: :3.n obligation of the seller and not of the buyer. T1"1e (\)tnmi::si�:)ner�::; rec>:)Urse is against the ACI��.iDC. ;:t.rd not ag;:J.in~;t the AFC_. if tlle� former did not pay a.ny _,. .o:'u"':�t:>1�~~,.�.=.� f.) 1 j~) "'/1'1-t.P��~. t...l...,lc��~. ... k'(' llll-110b ' 11 t.�..=C~-.'~ -~ '"' 1. t'-.�-=-� ..:~u-::>l,1,:;-:*.���-=�� t)-.�) �=~ ...:1--�=~�"-1'� . :':.. !.�.! .1'-i.J. 'J} :::.,. !-1.--i,::.t- t t~~�-1!-~:_1, ... <:',::..---t1� (111 t}�l,::. CAJ. r� I �:�J1 [ �l (�-'� ~-.. .�,,..t:::>.l.��=-�' 1�1-.�."'"1�t� ,..:..:~.4�.�..~.-,::.11-.1�..!. nt-� 1-1� �- .�. 1-r �-� ._. ,_.. ��� ..�J. ._. �-� 1{)[)(<::) �:)f the Tax C�YJe fn::rn1 payrnent of s;::~.les tax on its sales of pyrite." T'l!'rT' 1� t'd}� - 1-t-?!-:if-'t�?G- t-- j1._.�() t-~--~Hi <�.11� -,=-::311l�.'T\�\T�c- l.l-!<-.:e- 0�t- rr��, 1_. 1.~_�;..-~, . (_'J.l.�). _f-e- pt- ':-:,.6'tl' t..�ttlg e . . . 1�n tt��- (.._�.(..-.1�t1"'_. �:.1.l-_-.�.t.\�.~�.1-r��..:~. ~1�-d-.....,:�T~ LP:l1.111�1t�;n=,c�-��,. t.-t!l-- 1-~,--.=_�.-.f)<'rt�ll_.-l,'I.V."_t-lt._. T\.'Vy�~:,t.-.:-r t.-..)<-�t�t�t:,:-=.".(�~t... (_'.l.t...t'nrOr t..11.~., the original sale:; of finished product. This is bol:;tered by the fact that tlle sales tax, excise or miller's taxes are paid on "domestic:;::tlly m:3.nufactured. processe:;d, produced or imported nrvvT materials. part, acces:;orv or other article locally purchased ' ~ or imnort.E?d by the manu.f::i_durer". The Contractc�r�s tax is a tax p:~.id for the :::ale of servke::: by those persons enumerat.E?d in .1::":.e�\,��_t.�1,-.A-l 17, 't'_) (_�1) � t._l.��1-~- .. T~.:1.A (.�J.-,-(1-e. Tl�1�1,--:.- ~-_-1o-E:-?r.:�- 1-10t_. U .-).�1n� oA:;-t- p�e-t�,--.=--<-A-l,--:o. "�=-'l_l_b,l_''o�:;--<.�- t_. practice oi their professions. The contractor's tax not being included in the enumeration is therefore excluded. 115
DELI.SIO.t~- � C.T.A. CASE NO. 4721 - Page 14 - The relia.tK' of petiticn.;;-r in tl1e dt.ed �-� all ,.--~-.~.----,�!-f�i�1�r�,.:.:.-:.�:,l--,--..�1-���-~-11 ~-IYil_l���lt't. 1�c- 1~:1. J_l1C_._�,J_J__�".:1>. l r-����r~.�:t'.'t.�l��-~� .',-;-:-,~ �ja.t-f-1'."...;r1-1-'-:.; 'i'IP.�-!�"i�'�-�-I-��.-��;r�c�--1 t�_-J.._,. c--~-1-!t'ft... r.. i / �-� �.. .!' �-' ��..-...,!- 1r��.�...:-1.!�r�-� ,.._-...if t�.t� �lt::.:-:.' t.-�":>'�<��7~ c'-,1--1!"'��"1�. ."'!1' t(�_.._.. t.'.�!,1::-,.<-1z- ~�--��t�F-�='��_t..()�fYd !-:;-'-r��r=.�. (S 8" ' <.;A; ' Abad v - Court of Tax Appeals, L-20834. L-20903. October 19, 1966, 18 SCRA 374, 385; Commissioner of Internal Revenue v_ American Rubber Co., Inc., L-19667, November 2 9, 1966, 18 SCRA 853; Philippine Acetylene Co., Inc. v_ Commissioner of Internal Revenue,- L-19707, August 17, 1967, 20 SCRA 1056; Gil Hermanis v_ Hord, 10 Phil 2 1 lt:>c� to:�, 110 orr�,c-c� ll'��t - ~ V9..- ) 0 tt-,..,,._~l_C._�,,:_:_:.O�(-"l ...-_.J Tl-,..::. t-�.,:::.t' 1"1 1"1���1 C:�:< �-� -� (�)-1"1 .1 &. �� y C= �-��-'�-' ':=-�l �- �-�'-�� �-��-' ,...__ . . . . . . . . .� �-� t-l���".._"._-..c_,..._:_:..1. 1t�!-:l:;',' rr-'-t�_1..'-�.-.--.~ 1�!.-.,------lJp.�-.�-.��-l-,:�:�,-.�c�--� t�'-r� �l,::�-:�. t.--'.-.-���,-c_:-t-� (�-����f t�r��!:l�.:>t1-l-lf�~:1,_-._-. t-l�-l�!.-""�-'� -,_~._�t-1��'-1� i�-�-'l�J, ""�---� t�l�l~-.J;o..,.-_1 tl�..::. �"�'� t_-.:-J�,,~q:,�~v,-I:i ::�.dt- (�-�lf t�--~'-,'\�.���.~:��:-:�.�c��' Lit��ti.-..-�..) ��-~�--'�-�-��.�.-�'-�---'�-.-�,]1!l-�t~ 1�1-1 1��.�.le'.:�.t�,��:�:�.,�.t�!�-l-L�1�11_1J..t-1::n. -� 1��-� C�-'"~'ll�1t-,�n.:,� f.')1"1�.--�-�.,:�;',~. 11.1,1'.�:-:�- t_J '-' g-:::r�:xl-:: (American Rubber Co_ v _ Collector of Internal Revenue, 64 SCRA 569.) For sales t_ax purpo' se::::. the only (:onditic�n in order tc� be t1�1.::., ��:-�'��~�)..l.o!.t�:-:�.t."l t!-..,,.:;__,..:_�, ;-.._.,-.._�.-,r�t�..-._:.:.��.-�-�t�-1-l/~T t't�I�I.rr-��-u)_C_ ��-C=�-:....r�"-l .,. ---� C._:r�:�J:.>lt�:�:�'c�--' t-:~=---I~:V.. 1���=-�� r�"-�>� l. !"i�~.�.�-' '-.---.'.��-�;t"lC._.r�:':�:t.". l�l-�)-.C. .rV;l'(.t''�-~� t~.--�-'�) Even if the ~:eller of the good~; ::tre gen.;;-ral 116
DECISIOh C.T.A. C~~ NO. 4n1 - Page 15 - ;:t!lges p~-�.t.1�tJ�..:A�1~�r. r�- � . !"t.ow�� ..�),-.-;r~:.� t_..() 1���1),o;T~..�. Section l66(a.) allo~.v~; the sales h,::, (.�,+! �,�-:�:,...��ll�'-t�,�:��:,�.,�-}�'.=..'�,;-::,,.'.:;�:.:.l�t1�c-.-�4'-�� t.~-�t.l:�-:.:�. .._:�,-d;_1.:�:�:-�..�:--' t.���J;.v~~ ,.�.�.���r�1 t-l��,1:-:,, t"-t't�11'c�--'f�.1::�.:...,.�--l !n�'r�-���-,�,..��il�l-�r��.��.r�-�� �11��.c-�' ln., n0a �-�� �.� �.:- r-�,�;11�.-�1 ' t��JJ1'lt=>f"-t�r�l::1t111fClr�ttlf;:::.t� t1�1,::, :;1!"1(1 ��;-1��.-:�� .. �~� �c-���:-;�!,l.:-:,~:,.c�-:� t~~~:1.',4.!.. ~'"(',~ .';-'��-� f-;:=<c:c:,::,.,-�1 00 �tt--11.;:::. 0t�," "~ l l 00 ~ � ' - � 00 �--~ ~- .~ \...... 0 0 � - ' � � - � � - � "o' 00 o , '-� A �-�� O .. '�' '�' -... ,,..-..:- . ��i ��l.:.rl r�r��v\�1� �:)!" 1:, 11-.. ) '�-�� 1 !._ �-� �- t-l� �ld.- t-� t-l� �1�~' �.�:�:�-r1d.�~��-.-:'- t~.~:~..�...':�.. ;t�:l.._l �c..J��..�:.t.)�i.".I'.J�.���-:t t-.��:�-:� :.l'rr l�r�1'-�.1+1''...-....o-...t-,�:�:.--'�.�..1 t't�1 tA�.tl--...:~. 1 t1� t 1('. 1 rl tY. TVt-ll'I\1 ... 1�0�-::�::. r'}�,:-:-�!"1�r�-���t'�C�-:�l.f"l-r.���'�1tT t�� -.,, �C.�<�:.�!�.l.�:�..�c�--� .d.~.'�'���-:l��C-��C��O--::-:-:�.C�-�'C-;.:�:>t"I�!-..:�.r�1.- !",��.,�;r� -� H!-)) 7 �c--�t-t�'1i c..+..�..:.:.><t1~1�-� . I 11�,:-,t�l.:. Tr-~) t�..:_..-'.-..�:�-:\-1.�Jr�t�.t.ul.�=:..<;, t�;''.:,/.' .' r,�-tt.tl�r�r�I.:::.r J._.�fi::.:' '..I'. �.,J" �.�' 1��.-:~� t '..; t1, t....... (J.� ...1 ._. �lJl~.. ���� ..�V Jr..;� �t:,~... ~T ,..,tl11 ~'"/' Deficiency Income Tax for 19�~' 7 in tlle amount of P 1.474,4.37.60, incltt:;ive of su.rch~.rge, per Our comput3.tion, to \�'lit: 1987 - Deficiency Income Tax Net Income 1:::.er 'Return . p ~:.4,t.72.0.32.00 i�,.Jd: Ta.ze:; & Dut.ie::; - -~. ') 10 !:')64.00 ca.pit::1.l E~:penditu.re�; P.�;� n ~ ? q �) c::. ()f~ (�r N-2-t T::u�::abl-2 Inc�:nne ,)t....JJ . .f()w, I ;.��) .... ..,. T.., �� .:_l_.a:�~ [1. 1-1--~ T11P�-�.t�.:�-.�-'�-.}11 .\.-..�)';�_c):<- i�:::c'�J1 p 1.3,4.?:.3. 909.00 Ta.x P;::1.id 1�-:. 11 tJ,w')(�..). c}: ,w�-:. .�n.....�1��.) Deficiency Inc.::�n1e T:nr 1 ')�) rr-:. ~=- f.�(.1>:!~r:..) . (..1.�(._1._ Add: 20$ Sun::harge- ,u""' , !..)_ Tot;:;.l PE?r Court's Cornpu.t:;.tion * 24!:"; 7�;;(i_f.(! p 1,474,4'~17.60 WHEREFORE, ri��� t�� tAt,L.::-:, ._ t::''-�.���1�.C���t.��.�) ~ f.��)1� r_�;.:__..:,r.-rr-"v����;t}(l.t.=. �>-�!"1t.� (�-��,.�-��.,rI-l-�r.�1rt.�C-��O�-:'�t�,�.�.�.���r�L;.:,[ (��~,1� Interm:i.l Revenue da.ted I��I.:)vembe.r 26, 1991 is hereby modified. 117 ��--��- __ _J
DECISI01.- C.TA. CASE NO. 4721 - Page 16 - ACCORDINr.LJ tr-- u ����t�,�i.:::.t��-���1 1�c� 1�1�1 l .' !r-��.".�.:�::..�Jt.1t-1� �,�-:�-� ,t�l~~�t� __, l"�Pt-.::.1-..~T t._.. �- ��-� 1. '=:="f.__ ._..) p-��:�1-~-:;r .J. �-� ��-� ....- ! ��r� 1 .;:;. ���:=. nl~f....' r.�~ 7 7 �=.� �1. Li .;:;. .' J. 1 J..� J. ._.1 t .I.� � .I ;:i. �.~.� ...-1~1�1�..�.�1�Pt"l.r.�~T 1.�.-.�,!- 1�~�-��-c��r���H�.�)�t�1�!�..1�t�:-�i1�1,t_. t.l�J�.1�'=��::' :-:1� r�r�-,-,-..:,1-1�!"-' t.. �'-�--:.t� r> -�. �� �v �/ L ..-,!�r�,,::, t,:;nt tt�r.:::. nine� it�l..-. !������t� 1�t�l���tnc�t�vc. ���,1� .-.. �.� �.� J. �.� ...._,.,~,..., ��..� u.:::.:=lf. 10P'7 �.L �.� / ��� �-- (�.!.-��(!'�~ �c-q'r'�-,�.-..1.,�. -,J~.lt--'.r:.ir=t,:��:...� ,I :.� �,_) I _1 l.. ��.� -��-' � '�,� f._. .r-� �) --~ i..1 2CJ$ intB-rB-st 1.=:-er annum irom the da.te prescribE>(! for payrnent until iully paid pursu::u1t to Se-:::tion 2.:;3(a.) of the Ta.x Code. The U)tnpnnnise p;;-na.l~.y impc�:::ed l)y respc�ndent in her deficiency l�r--Hr~-��'��.�Jc--�.�::�:�.'���1 �'>:'.c~�� �j'l--� r�.�.'�l��.�.....:.:_-...:_:�, "d'���..�Jt-.�. .�:�~.n1.r.-..,.'�:...'-,:.\!- t.l1-�:f�.t.. nr-����~t-1�.t1�-��'��-��)!.11:�::�:�' r� ��:1�.o;::.t�."-=."."-=."',-j tJ��.�J t't--r=�� 1�!-!"irr-�"���./�.._.:,-.~i. t-l���'�'.1� "1 . T\�I1.,:.:-. !"1�-1��1�t":�" 1.-,-:.' .'�-.�.'.�-��,�t�I�lrrl-��',��1-"..'!"11. c�-�'��~ rr---'t�:�"�t"l.�:-l.�lt1-�.T/ '..�-...,:-~...1-i!"!!�.�j�t-� t�..::- l�t-r�.irr��''(�-)C�-'P....�'"...l (�-1� 1" J ��� (.�..,�...-.�,ll.::�:�-:�.,.�,�t..:�:�:..�...-.1 1,;,,,1�t.t.-!L..-.,,'�,'� t.� t.l��ic�._.. �-.~~..�-:.rt�..:�:�-".=-. t'�"f"l-P.. t..�,t~ ��:::>'.r�! r..l t.....,....�,t-l fn�-�r�t-H - i.t,1,7 t�.����f t.l�.r�...:.:.- t'-�:'-~��q'":,'--�:�.'1�'1lt:�~.t� . u ' (Wonder Mechanical Engineering Corporation v. Co1lt of TaxAppeals.. L-22805 & 27858. June 30.. 1975. 64 SCRA 555J The Defi(:i.ency Sa1t:-s Tax Assessment for 19t~7 in the a!rK�unt. of P 192.312 0.}. cancelled ;::md set aside. i��-J��,�.�!��c-��t~c_.� ��:Jtn:-P�::>�1�1�r.c_..t. nr-����~tt.�"r._t.��...-.,n- ..::.:..r�. SO ORDERED. WE CONCUR: ~...l:)~~ ERtlESTO D. ACOSTA 118 ' . . -~--~� - ..... - -
DEOSIOl - C.T.A. CASE NO. 4121 - Page 17 - CERTIFICATION 'T1 lu.s 1.s t.o (:ert..H.y t...lia.t, t.~..le a~~:n:)�ve (leoS. H. )n "-<'-;a:; reaCi~lE'(l af"t.er ' 119 ,....... .I
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