CTA Case No. 4525 (Decision)

r< e p 1..\ b 1 i c n f t 11 e r�� h i 1 j p fl i 11 e s COURT OF TAX APPEALS C~ut-~:.:~on City ENRIQUE A. BARRERA , Pc~t i t i one,~�, , C.T.A. Case No. 4525 COMMISSIONER OF INTERNAL REVENUE, n (�~ �~ I"' o 11r: I C' n !; � X �--��-���-���-��� X D E c: I I0N ll 1.i. � cl !-~ f i. c �i r� 11c' y c .., pi" t ,,, I. r. 1.:1�i n �:; l;<A>< i.n o) the .:.~mount tJ! l 1 r1 the f""' e t; j 1� j 0 11 " I ' � i ' ,, r-� .i. J i p i t1u, of l g ~\ 1 age, and () 1 9E:\3 , solei to E: (' l j l l d ,, 11.~""\oson i."\ Manila. The l. OC"c:\tPd ,:>. t Binon do, r� i.J 'y' l' l; :i. t "i. 0 1l f! t ' i ll h j ~; t t ' .:~ cl e (Jl"' b 1..1 5 i n e 5 s a Til j s W <.71S c on f i r med b y the t i o�:. S I_\ �":\ T\ r:~ n n f i':l. C e t"� t i f i C o"'t t e f:) IJ h 0 t' i Z i l1 g Regi s tt-ation No. i�;s u Pd by f<C>sponclent ' s r~e venue D i. �:; t t' i c t Clff i cer�� which s t c:, J;c� �-. t\1 1\ S: GG J

- DEC I S I 0 N- C.T.A. Case No. 4525 " This is to cer~tify that based on documents submitted in this office, fYk. Enr~ique Anneles Barrera with taxpayer account number B-6654-82728-A-7 and a resident of 446 Mendoza St., P t.\ic.\' po, Manila was not l'~eq uir~ed to pay the capital gains tax on the transfer of the real property de s cribed below for the reason that: i or~d nat~y assets used in business ><XX XX>< xxx" <See Annex B, Petition for Review> Petitioner further presented doc umentary evidences that a real estate dealer and has paid h is ta x es as suc h <Exh.H -2>; his 1983 Inco me T ax Return <E><h. H--1 > declaring his income of P583,912.20 as fr~ om of subject real property !Exh.H- 1-A, Schedule 5> ; t h at h e reported the sale under Schedu le 7 of the In co me Tax Ret ur~n ;,~n ( Exh. H- 7-�B ) ; that subject property was used in his trade a nd bu si ness showing s cont r~act of Lease on the sa me at the time of the s a 1 e � <::; P e F >< h s � 1\1 t o V r3 n d t h e i l'' s u b- ma r k i n g s )

- DE C I S I 0 N- C.T.A. Case No. 4525 Un Octt1ber 31, 1985, Petitioner availed the Tax f-) mnesty under~ the pt~ovisions ot� Execl~tive o r~der Nos. L~l dated Augu st �:.:J�J 1985 <See Exh.C) covering ~1.:�� , the subject property and paid the corresponding tax due which is 10% of increa se in Net Worth in the amount of P2 7,000.0u as evidenced by confirmation Receipt No. 81005422 5. <See p.B BIR Records) In an undat l?d letter according to the Respond��nt, an asses~;ment was issued Augu s t 22 , 1985 agai nst the Peti tioner for the year 1":~83 allegedly as "deficiency cc.~ pit.!\1 gains tax in of P2 1 3B7,940.35 as computed below, subject to adjustment of interest up to the actual Net Capital Gains Per Investigation p 153,500.00 Add: Di sal lowances p 2,5�.9,385.00 p 2, 722,885.00 Acquisition Cost p 1,628, 000.00 p 1,530, 731.00 ltprovenn ts 693,485. 00 857, 209.36 p 2,387,940.36� Se 11 ing Expense 247,900.00 Net Capital Gains After Review Tax Due Thereon Add: Interest fro1 9-29-83 to 7-17-86 TOT~ AIO.NT lllE <See Exh.D> In a letter dated Septe mber 25, 1987, and recieved by Respondent on October 7 1 1987 or more �' 662

- DE C I S I 0 N- C.T.A . Case No. 4525 than a year after receipt of the assess ment letter , P e t i t i o n e t' fat~ the first time protested t he assessment claiming that he availed the tax amnesty u n d e t~ t h e p t~ o v i s i on s o f E. 0. '+ 1 � ( S e e Ex h s � 5 and 5-A p. 9 BIR Records) Exchange of correspondence betwee n the Petitioner and the Respondent ens ued with the former maintaining that the assessment issu ed by the latter was vo id since "the property involved in this case is an ordinary asset xxx In view of th i s , ~g_ s_ontend that yam... assessmen t for c~.P_~.:t~l q�l. in s t@li deficiency l i void be c ause !l.Q. Fina lly, on December 1'3'30, Petitioner received a final ruling from the Respondent saying thus: "xx>< please be infor.. med that in view of your failure to s ubmit the desired documents to prove the acquisition cost , exp~~nses of sale and cost of improvements which were c l ai med as deductions in computing the gains reali z ed in the sale o f the lot and building reported in your client's income tax return for 1983, � as requested in our letter cir., t�>d J' uly 2 , 19'::)0, yom~ protes t is i s , con~;l.t:i!H'e d un~;ub~;tantit..'\ted and t h e t~ e f ta~ e , h e t~ e by d e n i e d � " (See E>< h. n > HE~ n ee, this appeal. ,I ' 663

- DE C I S I 0 N- C.T.A. Case No. 4525 - 5- Petitioner raised the issue on "whether or not the s ubject real property involved in the transaction/sale of 1983 is subject to capital gain s tax " in the amount of P2, 387,940.36. H!?SpClnth~ nt , al!.Hl raised the issu e on "whether this Honorable Court h s jurisdiction to act on the petition." We hold that this Court has no jurisdiction to act on thi s petition, the assessment having become final and unappealable. It should be noted that on July 22, 1986 <See Exh. 4) which wa s admitted by the Petitioner when he said that " sometime in 1985 and more specifically , accordi ng to Respondent, before sudden, Augu st . .�~ ...., 1986, F~espondent, a l l of a .::.c. ' iSS I.Ieti the disputed/void assessment of capital gain s tax upon P eti tioner on the abo v e subject sale xx x" <See pe:n~. II , 'etition fot" Review). Such assessment was, f o r the first ti me, only pt"otested on Octot.H.n~ 7, 19B7 in a lettet" dated September 25, 1987 <See Exh. 5 and Exh.5-A). It was alre ady more than a year since the date of the issuance of the assessment when the Petitioner protested the same. 664

- DEC I S I 0 N- C. T.A. Case No . 452 5 �- 6 - Cl e.::u~ J. y, said assessment had alrea dy b ec o me f inal and unappealable as provided under S e cti on 2 70 of the 1986 Tax Code, thus: SEC. 270. Protes t i ng or asse s smen t When the Commissio n er of I n ternal Revenue or h is du l y author i zed representative find s that proper taxes s hould b e assessed, he shall first notify the t ax paye r of h is fi n dings. Wi thin a period to be prescribed by implementi n g t~eg1..1lations, the ta xpayer shall be requ ired t o r es pond to sa i d notice. If the taxpayer fa i ls to respo n d, the Commissio n er shall i .s sue an a sses sm e nt based on his fi n dings. ~.L'.!.q~b- ~.2.-~Jt.s I!! ttll.:t ma Y_ b It J?..r..:Rt.Ji.\Li:;.Rst i::Vi.!.n i n t.?.~T ~j._y_g_~ b~ f.!J...tn..Y. t~ e.9..!:.1 e s t g,~ f QJ.: e_tn. . t:.~_<;.9JJJ~_i.�!.Rt.:.0 t ifW. 9..!: t ' ~~-.? t i gat i OJ.l i.~l 2L'.!.�.b. f.s>..x.:.m. aD.d m..~m:t.e...r. E..?. Jll.�\..Y.. b ~ t?.t:!:l..?...~.t..:1!?...tc.t 9...Y. .tm..P. 1 e me n t i M r.:g.JH.I.l..@...'tig.!L:c;_ ~-i t h i n :t; h i t~ t_y_ <3 0 ) gay s .f.r:.Q..!P.. t:!?S e i ..Q...t.. of the as_s e s s menl i fLtl:!Jt.t::.t~.i.~..'l... t h g_ �tEg.f.!..E..me n t sha 11 !2.~..�9...1.!1_1!. 1; i n aJ:_ ~ n d_ !:\.!1=.'\P..P. e a l a b 1 e � x x x This can , therefore no long er act o n t he matter for lack of jurisdiction <Comm issione r oF Inter~nal fT'even u e I-'S . Westet-�n Pa c i Fie Co t-�p ; 1 4 SCRA 105; Republic vs. Lim Tian Teng So n s a n d Co. , I nc.; 1. b ~3CRf-) 58'+) � ;, �I 6C o

- DE C I S I 0 N- C.T.A. Case No. 4525 - 7- WHEREFORE, the Petiti on for Revi e w i s hereby DISMISSED for l ack of jurisdiction. SO ORDERED. Quezon City, Metro Manila, July 8, 1993. � GRUBA Associate Judge WE CONCUR: D. ~STA esi di ng Judge ~ ().J_~ RAMON 0. DE VE A Associate Jud e CERTIFICATION I hereby certify that this decision was reached aft er due consultation among the members of the Court of Tax Appeals i n accordance with Section 13, Article VIII of the Constitution . ~Q-~ ERNESTO D. ACOSTA Presiding Judge ;, Court of Tax Appeals 66 .