CTA Case No. 5408 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SOLID BANK CORPORATION, Petitioner~, C.T.A. CASE NO. 5408 COMMISSIONER OF INTERNAL APRu:4a~; ~ REVENUE, --------------- X Respondent. x------ DECISION This is a petition far~ review filed by the petitioner~, SOLID BANK CORPORATION, against respondent Commissioner~ of Inter~nal Revenue, for the latter's inaction on petitioner's claim for refund/tax credit of the amount of P2,355, 180.15 which was later increased to P3,174,913.65 in the Amended Petition for Review filed on 18, 1997. The amount of P3, 174,913.65 allegedly represents petitioner's overpaid gross receipts taxes for 1994. As represented, petitioner is a banking institution duly organized and existing under the laws of the Republic of the Ph i 1 i p pines, with principal office located at 777 Paseo de Roxas Ave., Makati City. For the four quarters of 1994, petitioner filed with t~espondent its quarterly percentage tax returns and paid the corresponding gross receipts tax <GRT) for each of the said quarters, hereunder summarized, the tax base of

DECISION - C.T.A. CASE NO. 5408 - 2- which allegedly includes the passive income which was subjecte d to twenty perce n t (20~ ) fin a l taxes, withheld and paid to respondent by the various clients of petitioner. Period Covered SRT Date Paid Exh. 1st Qtr. (Jan. to March, 1994) P10,828,574.14 4- 20-94 B 2nd Qtr. <April to June, 1994) 3rd Qtr. <July to Sept. 1994) 9,712,474.02 7-20-94 c 4th Qtr. <Oct. to Dec., 1994) 13,345,471.07 10-20-94 D 9,598,669.41 1-20-95 E After taking into account the decision of this Court dated January 30, 1995, in the case of Asian Bank Corporation vs. Commissioner of Internal Revenue, CTA Case No. 4720, which ruled that the 20~ final wi th holding t.:.'ix on inter~est income should not form part o f the taxable gt~oss receipts, petitioner filed with the respondent on July 19, 1995 an application for a tax refund/tax credit of its alleged o verpaid GRT for the year 1994 in the aggregate amount of ~2,355, 180.15 (see page 11.3 to 11.5, CTA Recor~ds). Gross Receipts Subjected to the Final Tax Derived from Passive Investment P318,258,030.00 X 20~ 20~ Final Tax Withheld at Source p 47,103, 503.00 X 5~ Overpaid 5% Gross Receipts Tax p 2,355,180.15 As can be seen from the above computation made by the petitioner 's t ax co n su l tant, SGV and Co. , ther~e appear~s to be in the final amount of

DECISION - C.T.A. CASE NO. 5408 3 P47, 103,603.00 which allegedly represents the 20% final tax withheld from P318,258,030.00. The correct amount should have been P63,651,606.00. This en�� or� in computation was r�epeat ed in petitioner�' s or�iginal petition for review filed in this Court on July 19, 1996. Petitioner later rectified this mistake in its Amended Petition for Review filed on April 18, 1997 ~vhet�e petitioner now claims that the amount of gross receipts derived from passive income which was actually subjected to 201- final tax fot� taxable yeat� 1994 was P317,491,365.44 and not P318,258,030.00 as mentioned in the earlier petition. Thus, it said that its claim for refund for its overpaid gross receipts tax for 1994 should be i nct�eased to P3, 174,913.65, computed as follows: Gross Receipts Subjected to the Final Tax Derived from Passive Income P317,491,365.44 X 201. 20% Final Tax Withheld at Source p 63,498,273.01 X 51. Overpaid 51- Gross Receipts Tax p 3, 174,913.6~5 Petitioner present s the proposition as reason of the petition for review that the gross receipts tax it paid in the year 1994 were based on the total gross receipts, inclusive of the passive income which were subjected to the 201- final withholding tax at S 0 Ut'Ce, thus, it stressed that in the light of this Court's ruling in the Asian Bank case, which states that the 20" fin ~

DECISION - C.T.A. CASE NO. 5408 - 4- withholding tax on interest income should not form part of the taxable gross receipts, petitioner has actually overpaid the amount legally due from it i nsofa~~ as its GRT obligations .:n~e hence, a ~~efund is Respondent on the other hand, by way of special and affit~mative defenses, alleges that (1) petitione~~'s claim for tax refund/credit is still undergoing administrative i ~~out na~~y investigation/examination by s ~~espondent' Bu~~eau; the alleged refundable/creditable gross receipt taxes were collected and paid pursuant to law and pertinent BIR implementing rules and regulations, hence, the same is not refundable. X X x; ( 3) petitione~~' s allegation that it erroneously and excessively paid its gross receipt tax during the year under review does not ipso the refund/credit. >< X 'X H ( Lf.) petitione1�~ must likewise that the alleged refundable/creditable gross receipt taxes were neither automatically applied as tax credit against its tax liability for the succeeding quarter/s of the succeeding yea~' nor included as creditable taxes declared and applied to the succeeding taxable year/s; (5) claims for tax refund/credit are construed in strictissimi juris against the taxpayer as it partakes the nature of an exemption f~�om tax and it is incumbent upon the petitioner to prove that it is entitled thereto under the

DECISION �- C.T.A . CASE NO. 5408 la.w; and (5) petitioner~ must prove that it has complied with the provision of Section 230 of the Tax Code. The legal issue which is pt~e sent ed for~ our~ consideration is whether or not the 20% final withholding tax on certain passive income of the petitioner should be excluded in the taxable gross receipts. We find merit in petitioner's contention that the 5% gross receipts tax should be based on the gross receipts net of the 20% withholding tax already paid by petitioner on its passive income. This is not the first time that this Court has been confronted with such an issue at hand. As cot~rect 1 y stated by the petitioner, this Com~t has resolved the same issue in the case of As i a n Bank Corporation vs. Commissioner of Internal Reven ue, supra, which is anchored on similar factual circumstances and on all fours with the case at bar. Hence, we find no cogent justification to depart from the wisdom of our decision in said case , which states in part, to wit: "The assessment GRT is based on Section 119 of the Tax Code, quoted hereunder thus: SEC. 1 19. Tax on banks and non- bank t=i nancial i ntet'lllediat'i es . -Th et~e shall be collected a tax on gross receipts derived from sources within the Philippines by all banks and non- bank financial intermediaries in

DECISION - C.T.A. CASE NO. 5408 -6 accot~dance with the following schedule: (a) On interest, commissions and discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of instruments from which such receipts are derived. Short-term maturity not in excess of two <2> years 51- Medium-term maturity-over two years but not exceeding four~ (4) years 31- Long-term maturity: (i) Over~ four (4) years but not exceeding seven (7) yeat~s 11- ( i i) Ovel�' seven (7) 01- (b) On dividends 01- (c) On royalties, rentals of pt'oper'ty, r~eal Or' pet'sonal, pt' ofits from exchange and all other items treated as gross income under Section 28 of this Code 51- Pr'ovided1 however", That in case the maturity period referred to in pat"agr'aph (a) is shot't f~ned tht'U pretermination, then the maturity period shall be reckoned to end as of the date of pretermination for purposes of classifying the tr'ansaction as shor't, medium at' long term and the correct rate of tax shall be applied accordingly. Nothing in this Code shall preclude the Commissioner from imposing the same tax herein provided on persons performing similar banking act i vi t i e s.

DECISION - C.T.A. CASE NO. 5408 7- The aforequoted provision of the law speaks of gross receipt s as the basis of the 5~ bani-< tax ot~ GRT, and i t is petitionet~'s contention that the interest income included as part of such gross receipts should be computed minus the final tax already withheld by various withholding agents for the reason that such amount did not actually go to its funds, hence was not actually received by them. We agree with the petitioner that the 20~ final withholding tax on its interest income should not form part of its taxable gross t~eceipts. Revenue Regulations No. 12-80 dated Novembet~ 7, 1980 on Taxation of Cet~tain income Derived from Banking Activities provides that the rates of tax to be imposed on the gross receipts of such financial institution; shall be based on all items of income actually t~eceived, thus: SEC. 4. XXX XXX XXX (e) Gr�o s s r't?ce i pt s tax on banks, non-bank ri nanc i a 1 in t er�medi ar�i e s ~ t::i nanc i ng companies, and other non-bank Financial intermediaries not per�For��nting quasi-bc.wk.ing act�.iv.it.ie~>. -The r�ates of taxes to be imposed on the gross receipts of such financial institutions shall be based on all items of income actually received. Mere acct�ual shall not be considet�ed, but once payment is received on such accrual or in cases of prepayment, then the amount actually received shall be included in the tax base of such financial institutions, as pt'OV ided hereunder. (Underscoring supplied) From the foregoing, it is but logical to infer that the final tax, not having been received by the petitioner but instead went to the coffers of the government, should no longer form part of its gross receipts for the purpose of computing the GRT. This conclusion is in accord with the interpretation of the Supreme Court in the case entitled Collector of Internal Reven u e v s. Man i la Joc k ey Club, 108 Phil. 821, as quoted by this Com�t in disposing of a similar issue in the case entitled Campania Maritima vs. Acting Comm i ss io ner of Interna l Re ven u e , CTA Case No. lL~26 dated Novembet� 14, 1966, thus:

DECISION - C.T.A. CASE NO. 5408 - 8- In the second place, the highest tribunal of the 1and i nt er~pt~et ed the t et~m "gt~o s s r~eceipts: to mean all receipts of a taxpayer excluding those which have been especially eat~mat~k ed by law or regulation for the government or some person other than the taxpayet~. Thus, i t was held: "xx xx. The govet~nment could not have meant to tax as gross receipt of the Manila Jockey Club the 1/2 % which it directs same club to tut~n ovet~ to the Boat~d of Races. The latter being a Government institution, there would be double taxation, which should be avoided unless the statute admits of no other interpretation. In the same manner, the Government could not have intended to consider as gross receipt the portion of the funds which it directed the Club to give, to winning horses and Jockeys-admitted 5%. It is true that the law says that out of the total wager funds 12 1/2 % shall be set aside as the 'Commission' of the track owners but the law itself takes official notice, and vit'tually approves or directs payment of the portion that goes to owners of horses as prizes and bonuses of jockeys, which portion is admittedly 5% out of the 12 1/2 1- commission. As it did not at that time contemplate the application of gross receipts' revenue principle, the law in making a distribution of the total wager funds, took no trouble of separating one item from the other; and for convenience, grouped three items under one common denomination. "Needless to say, gt~oss t~eceipts of the proprietor of the amusement place should not include any money which although delivered to the amusement place has been especially earmarked by law or regulation for some person other than the pt~opt~ietor." <The Commissioner of Internal Revenue vs. Manila Jockey

DECISION - C.T.A. CASE NO. 5408 9- Club, Inc., G. R. Nos. L-13890 L- 13887' June 30, 1960) It is to be noted that, under Section 260 of the Tax Code, a race-track is subject to an amusement tax of 20% of its gross receipts and the te~~m 'gt~oss ~~eceipts' emb~~aces a l l the ~~eceipts of the p~~op~~ietot~, l e s s e e , a~~ oper~ator~ of the amusement place." Notwithstanding the broad and all-embracing definition of the term "gross t~eceipts" found in our~ amusemen t tax law, our Supreme Court did not adopt a literal interpretation of the said term in the case of the Manila .Jockey Club, Inc., s upt~a." The legal issue having been settled, what remains to be resolved by this Court now involves factual matters and that is whether or not petitioner has established by evidence its claim for refund. It must be declared at the outset that petitioner's claim for refund relating to the first quarter of the taxable year~ 1994, falls outside the t wo-y eat~ period for claiming a refund based on Section 230 of the Tax Code, as amended, in t~elation to Section 1 .-.c:- (a) ( 1) of the same code. In counting fat~ C..J the two-year prescriptive period, the filing of the quarterly percentage tax return should be considered. The records show that petitioner filed its Quarte~~ly Percentage Tax Return for the first quarter of 1994 on April 20, 1994 while the instant petition for review was filed on July 19, 1996. it can be concluded that the portion of the claim referring to the first longer be considered in the ultimate analysis due to prescription.

DECISION - C.T.A. CASE NO. 5408 - 10 - As to the rest of the three quarters of 1994, We find that petitioner is not entitled to the refund being claimed. ( A minutiose scrutiny of the petitioner's evidence, reveals that the evidence adduced by the petitioner did not clearly establish the accuracy of the claimed refund. The Court was not properly guided by petitioner as to how much of its gross sales/receipts/earnings corresponding to the passive investments were subjected to 5% tax rate, how much were subjected to 3% tax rate and how much were subjected to 1 and 0 percent rate. It appears in the case at bar that petitioner used the flat rate of 5%. It is to be noted that in the Quarterly Percentage Tax Returns offered as Exhibits "B", "C", "D" and "E"' the amount of gross receipts were clearly subdivided into 5%,31- and 11-, but this represents the totality of the gross receipts of petitioner. What this Court would like to know is what portion of the income derived from passive investments was subjected to 5%,3% and 11-. Petitioner did not apprise Us of this important aspect. Furthermore, Petitioner failed to show to this Court how the refundable amount of P3,174,913.65 was arrived at and it failed to attach thereto the source documents of the same. In other words, there is no way by which this Court can determine how much petitioner is legally entitled to.

DECISION - C.T.A. CASE NO. 5408 - 11 - to be entitled to the refund sought, petitioner is beholden to prove to this Court that(l) it paid GRT to the t~espondent; (2) that the same is over or in excess of the GRT required by 1aw; and ( 3) that it complied with Section 230 <now 22'3) of the Tax Code on the filing of the claim for refund( BPI Capital v s � Co mmi s s i on e t-� of Intet~nal Revenue, CH~ Case No. 1, 1 ggg) � it is also the bounden duty of petitioner to prove to this Court that the total amount of the 20% final withholding taxes on income (which wet~e allegedly deducted receipts/sales/earnings of petitioner for the period in question as a result of the Asian Bank ruling of this Court to arrive at the correct GRT and the claimed refundable amount) were withheld and remitted by its withholding agents to the herein respondent( Bank of the Philippine Islands vs. Commissioner of Internal Revenue, CTA Case No. 15, 1'3'3'3) To comply with these petitionet~ must pt~esent the Statements or Certificates of Tax Withheld at Source issued by its withholding agents, together with a summary of the same, as these documents will clearly show how much final taxes were withheld and remitted by the withholding agents to the respondent, for the account of t h e petitionet~. The total of these 20% final taxes withheld from petitioner's interest income will be the

DECISION --� C.T.A. CASE NO. 5408 - 12 - basis of the amount which will be deducted from the total gross receipts of the petitioner for the period in question, before the same will be subjected to the 5%, 3%, 1.%, O'Y. GRT t~ate as t��equit~ed by Sec. 119, supra , and as discussed in the Asian Bank case. In the case at bar petitioner presented no evidence to this effect. Although petitioner presented a Summary of the passive investments made and the income earned on these investments <Exhibit "G">, this is not sufficient to ~wove the fact of payment of the 20% withholding tax on said passive income. No proof was given by the petitioner to this effect. This Court f inds ftwther that petitioner failed to prove to this Court how much of the total gross receipts derived from passive income were subjected to final withholding tax at source at the rate of 20%. The certification from the Bangko Sentral ng Pilipinas (Exhibit "F 11 pertains only to the final taxes ) withheld from petitioner's purchases of Treasury Bills. The records clearly show that petitioner not only earned intel�~est income from government securities but also from trading commercial papers (see Exibit "G-36-a1). This fact was even admitted by the petitioner's witness, Ed Oliveros during the hearing held on April 30, 1997 <see Tsn dated April 30, 1997, pages 8 to 9). The amount of final taxes withheld from these transactions (trading of commet~cial papers) could not be determined because of the

DECISION - C.T.A. CASE NO. 5408 - l3 - failure of petitioner to present supporting documents. petitioner did not present the documents denominated as Confirmation of Purchase/Sale, Sheets to support the data indicated in the Summary of Income-Investments fot~ the year 1994 pertaining to Tt��ad in g Gain. A comparative analysis of the figures found in the Summary of Petitioner's Subsidiary Ledger <Exhibit "G") with the actual entt~ies found in the Subsidiary Ledger <Exhibits II G-�-1. II t 0 "G-89") also t~eveals that petitionet~ put~chas ed govet~nment secut~ities fot~ vat~ious c l i e n t s , in fact the bulk of the entries pertain to entities other than Solidbank (petitioner herein). This gives rise to the possibility that petitioner acted as an investment mana get~ and that the money used in purchasing the securities were sourced from other clients, thus the income accrued to said clients instead of the petitionet~. It is simple logic then to conclude that these amounts cannot be included in the present claim for refund as these taxes pertaining to said income were not paid by petitioner. In the instant case, petitionet~ did not pl�~e sent a plausible explanation, by way of documentary or testimonial evidence, to shed light on the doubts which these documents created. While it is true that in the case at bar petitioner adduced some documents to support its claim for refund,

DECISION - C.T.A. CASE NO. 5408 - 14 - the Court finds the same insufficient to grant the des i r~ed r~elief of petitioner. Plainly stated petitioner fell short in its obligation to submit the evidence which would have worked to its advantage. Thus, applying the settled rule in this jurisdiction that, a claim for refund is in the nature of a claim for exempt ion, hence should be construed in strictissimi jtwis against the taxpayer~, <Co111111 i ssioner ot= Intet' nal Revenue vs. Tokyo Shipping Co., Ltd., 244 SCRR 332)' we r~u 1 e the issue in the negative. IN THE LIGHT OF ALL THE FOREGOI NG , the instant petition is DI S MISSED , for~ insufficiency of evidence, with costs against petitioner. ~U(c~ SO ORDERED. ERNESTO D. ACOSTA Pr~esiding Judge WE : '~ CON _ / <Dissenting) AMANCIO Q. SAGA Associate Judge CERTIFICRTIDN I hereby certify that the above decision was reached after due consultation with the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution . ~~. o~ ERNESTO D. ACOSTA Pr~esiding Judge

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CI TY SOLID BANK CORPORATION, Petitionet~, - versus - C.T.A. CASE NO. 5408 COMMISSIONER OF INTERNAL Promulgated: , REVENUE, APR 141999 ~ Respondent. X- - - - - - -- - --- ---- --�CX DISSENTING OPINION The conclusion embodied in this decision denied th e entire claim for refund due to insufficiency of evidence. I humbly submit that the denial should have been based on the claim for refund's lack of legal basis, instead of dismissing the petition on the ground of insufficient evidence to substantiate the claim. The petitioner anchored its claim on the r u ling of this Court in the case of Asia n Bank Corporat i on vs. Commissioner of Internal Revenue, CTA Case No. 4720 dated January 30, 1996 where this Court upheld the petitioner's contention that the interest i ncome i ncluded as part of such gross receipts should be computed minus the 20% final tax already withheld and deducted by various withholding agents. I find the aforementioned Asian Bank t~u 1 in g et~t~oneous.

DISSENTING OPINION - C.T.A. CASE NO. 5408 2 Section 8 (c) of Revenue Regulations No. 12-80 dated November~ 7, 1980, as amended by Section 7(c), Rev en r_te Regulations No. 17-84 dated October~ 12, 1984, pr~ovides: "If the r~ecipient of the above-mentioned items of income ar~e financial ins-titutions, the same shall be included as part of the tax base upon which the gt~oss t~eceipts tax is imposed." It can be concluded ft~om the a f ot~e mentioned provision that the taxable base for purposes of gross t~eceipts tax is the gr~oss-up amount, inclusive of the 20'1- final income tax withholding. contrary to the declaration made by this Court in the aforecited Asian Bank case, the Supreme Court's decision in the case of Commiss i oner of Internal Re v enue vs. The Manila Jocke y Cl ub, Inc. 108 Phils. 821, June 30, 1960, which was reaffirmed by the said Court in the case of Visayan-Cebu Terminal Co., Inc. vs. Commissioner of Internal Revenue, 13 SCRA 357, February 27, 1965 cannot be considered as precedent cases, hence, inapplicable to the two cases decided by this Honorable in the cases of Campania Maritima vs. Actin g Commissioner of Internal Revenue, CTA Case No. 1426 dated No vember 14, 1966 and Asian Bank Corporation vs. Commiss i oner of Interna l Reven u e, CTA Case No. 4720 dated January 30, 1996, for the following reasons:

DISSENTING OPINION - C.T.A. CASE NO. 5408 3 1) In the l'r1ani la Jockey Club, Inc. case, the Club was authorized to operate horse races in which betting was made through the sale of tickets to the public. The total amount of bets called "waget~ fund" wet~e distt~ibuted ptwsuant to Executive Ot~der~ No. 320 and Republic Act No. 309, as follows: 87~% as dividends to holders of winning tickets 12Yz1- as "commissions" of the Manila Jockey Club, of which ~% was assigned to the Board on Races and 51- was distributed as prizes for owners of winning horses and authorized bonus for .jockeys. According to the above-mentioned distribution of the "wager~ fund", the then Collector~ of Inter~nal Revenue assessed the Club on the whole amount of its "commission" of 12Yz1-. But since the Club had already paid the amusement tax based on its 71. shat~e of the "commission", the amount assessable pertains only to the 5~1. for the period from November 1946 to October 1950. instances, the Club protested the proposed assessments and was sustained by the opinions of the Secretary of Justice rendered on three different occasions <Opinion No. 345, series of 1941; Opinion No. 249, series of 1952 and Opinion No. 340, series of 1955). Notwithstanding the opinions of the Secretary of Justice to the effect that the amount corresponding to the 5~1- was held only by the Club in trust for the owners of winning horses and authorized bonuses of .jockeys, the then Collector of Internal Revenue demanded payment of

DISSENTING OPINION - C.T.A. CASE NO. 5408 - 4- amusement taxes for the period November 1946 to October 1950. Said demand letter was timely appealed to the of Appeals wherein a unanimous judgment was obtained reversing the Collector's stand on the matter. In the High Court, the position of the Secretary of Justice was sustained thereby upholding the Court of Tax Appeals' decision. Accot~dingly, gross receipts of the proprietor of the amusement place should not include any money which, although delivered to the amusement place was "especially by law or legal rule or regulations for some persons other than the proprietor. Undeniably, they are money received by the racing club but they are moneys earmarked by law or regulations for winning horse owners and jockeys and never for a minute become the property of The same is true in the case of the ~% which the law directs the club to deliver to the Board on Races. The High Court therefore agrees with the stand of the Court of Tax Appeals that such funds representing 5~% of the 12Y2% "commissions" of the t~ace tt~ack do not form of the gross receipts, hence not subject to the amusement tax of 20%. The above-mentioned decision of the High Court was also applied in the case of Visayan Cebu Terminal Co., Inc. vs. Commissionet~ of Internal Revenue, 13 SCRA 357, Nos. L--19530 and L-19444, Febt~uat~y 27, 1965. The legal

DISSENTING OPINION - C.T.A. CASE NO. 5408 5 issue involved in this case is the interpretation of the management contract into by and between the Bureau of Customs and Visayan Cebu Terminal Co., Inc. whereby the latter as contractor was appointed the sole manager of the Arrastre Service at the Port of Cebu City. In the said Management Contract, it was further agreed and understood that in consideration of the rights and privileges granted the Contractor for the management of the Arrastre Service, the Bureau of Customs shall receive twenty eight (28'1.) percent of the total monthly gt~oss income derived from whatever source in connection with the operations of the Arrastre Service, payable within ten <10) days of the succeeding month. The main legal issue involved in this case is whether or not the gross receipts corresponding to the 28'1- of the total income of the Service Contractor delivered to the Bureau of Customs within ten (10) days of the following month should form part of the gross receipts subject to 3'1- contractor's tax under Section 191 of the Tax Code. The of Tax Appeals ruled in favor of the petitioner, holding the view that the said 28'1- payment by the Arrastre Contractor based on its monthly gross income should not form part of the gross receipts subject to 3'1- tax and that of the said Management Cont r~act can legally be construed as a "l�~egulation". As the learned trial court has aptly

DISSENTING OPINION - C.T.A. CASE NO. 5408 - 6- obset�ved: "x >< x the govet�nment could not have intended to consider as gross receipts the 28% that went to one of its institutions, the Bureau of Customs, and t h et'e by collect percentage tax on it f1��om petit ionet'. To hold petitioner liable for the payment of percentage tax is unquestionably unjust and not contemplated by Section 191 of the Tax Code. " All the above-mentioned decisions of the High Court made specific reference to gross receipts which are especially as not forming part of the taxable gross receipts for purposes of the gross receipts tax under the Tax Code. For this purpose, it is pertinent to define the word upon a thing to distinguish it Originally and literally, a mark upon the a mode of marking sheep and other animals. is said to be earmarked when it can be identified Ot' distinguished from other property of the same nature. To set <Black's Law Dictionary, 6th Edition, p. 508). In the case of the Manila Jockey Club, Inc. Executive Order No. 320 and Republic Act No. 309 made the specific "eat�mat�king" fm� distt�ibution of the total wager fund to different persons other than the The same is true in the case of Visayan Cebu Tet�minal Co., Inc. where the specific earmarking of the 28% of the total monthly gross income to be delivered to

DISSENTING OPINION - C.T.A. CASE NO. 5408 - 7- the Bureau of Customs by the Contractor was provided in paragraph 23 of the Management Contract. Such specific earmarking of the twenty (20~) percent final income tax as not includible in the gross receipts for purposes of the gross receipts tax was not provided by any law ot' legal rule or regulations, hence the non-applicability of the above-cited High Court decisions to the Asian Bank Corporation case. This legal o bs et�vat ion is also in point in the case of Campania Maritima case where the non-inclusion of the 10~ reserve from the total cash collection to avoid claim for refund on ft�e i ght and passengers tickets not taken is not provided by any law or legal rule or regulations. With due respect to the opinion held by my esteemed co 1 1 e a g u e s , I v o t e t o DENY t h e pet i t i on �