CTA Case No. 3934 (Decision)

Uifi'UBLIC OF Hit: l'"tlll.lt'l' '~"~ '�� COURT OF TAX t\f'1~�AL1 � Q\.;�.~Ud CitY YARDLEY INTERNATIONAL, LTD . , Petitioner , - versus ... C . T . A. CASE NO . 3934 COMMISSIONER OF INTERNAL nEVENUE, Re s pondent . X- - - - - - - - - - - - - - - - X DECISION Suit for recovery of the amount of ~31 , 527 . 22 paid to the Bureau of Internal Revenue as profit remittance tax on the ground that the profit upon which the remittance ta x was paid was not remitted. Petitioner Yardley International, Ltd ., filed its claim for refund or tax credit with respondent Com- missioner of fnternal Revenue, but since no action thereon was seaso nably taken by respondent , peti- tioner brought this case to this Court. The f ac ts are not in dispute, the partie s having s ubmitt ed this case for decision on the basis of the pleadings and evide nc e presented by petitioner . Petitioner is a for eig n corporation duly licensed to do business in the Philippines and with Philippine

DECISION - CTA CASE NO. 3934 - 2- address at c/o its resident agent , Mr . Alonzo Q. Ancheta, 706 Don Pablo Building, 114 Amorsolo St . , Legaspi Village , Makati, Metro Manila . On May 9 , 1983 , petitioner paid the 15% profit remittance tax of e31,527.22 on branch profit of e210,181 . 44 which it intended to remit to its head office in London . ( Exhibit s "C" ' "C - 1" ' "D" and "D-1".) It appears that petitioner , through the Chartered Bank , filed with the Central Bank an application to purchase foreign exchange for remittance of profits worth e210 , 181 . 44 . (t.s . n . , pp . 13 - 14 , November 25, 1985; Exhibits "D" and "D-1" . ) However , because of certain requirements petitioner was not able to comply , approval was not immediately obtained . (t . s . n. , pp . 15 - 16 , November 25 , 1985.) Be that as it may, the evidence shows that the intended remittance was not effected because of losses ' SUbsequently incurred by petitioner . (t.s . n ., p . 16 , November 25 , 1985; Exhibits "E" and "F" . ) On July 23 , 1984, petitioner therefore filed with respondent a claim for refund or tax credit for its unused profit remittance tax of e31 , 527 . 22 .

I)ECISION - CTA CASE NO . 3934 - 3- (t . s . n ., p . 18 , November 25, 1985 . ) No action , how- ever, was taken by respondent upon said claim . (t , s . n , , p . 18 , November 25 , 1985 . ) Meanwhile , petitioner stopped , as shown by the record , its operations in the Philippines . (t . s . n. , p . 18 , November 25, 1985; Exhibits "H" and "I" . ) Hence , the i nstant petition for review , Is petitioner Yardley International , Ltd . , entitled to a tax refund of 831 , 527 . 22? At the outset , it should be stressed that res- pondent did not present any evidence controverting the correctnnss of the material facts stated above . As a factly matter , respondent simply submitted this case for decision on the basis of the pleadings and the records after petitioner has presented and offered its evidence . It may suffice that "Since one who prays for judgment on the pleadings without offering proof as to the truth of his allegations , must be understood to have admitted the truth of all the material and relevant allegations of the opposing party , and to rest his motion for judgment on these allegations taken together with such of his own as are admitted" (Ba uermann vs . Casas , 10 Phil , 386;

DECISION - CTA CASE NO . 3934 - 4- Evangelista vs . De la Rosa , et al ., 76 Phil . 115) , respondent may be considered as not questioning seriously petitioner r s entitlement to its claim for refund . More so when the evidence prese nted , which was not disputed by respondent , s u fficiently estab- lishes petitioner ' s right to the refund . (Common- wealth Mana~ n ment and Service Corporation vs . Commissioner of Internal Revenue, C. T. A. Case No . 3232 , June 26 , 1985 . ) We hesitate to further fashion an issue into a satisfactorily settled r ule . (Common- wealth Management and Service Corporation vs . Commis- sioner of Internal Revenue , C. T. A. Cases Nos . 3754 and 3794 , July 31 , 1987.) Even in his special and affirmative defenses in his answer , respondent does not dispute that no profit was actually remitted to petitioner ' s head office . As a matter of fact , respondent did not even ~other to file a memorandum in support of his case although he was given ample time to do so . That petitioner did not remit any profit and that it in fact inc urred a net loss is shown in peti- tioner ' s Statement of Assets and Liabilities dated September 30 , 1984 . (Exhibit "E" . ) And on September 601

DECISION - CTA CASE NO . 3934 - 5- 30 , 1984 , petitioner retired from business and its license to do bu siness cancelled , and petitioner ceased operatio ns in the Philippines . As observed by Judge Alex z. Reyes in Common- wealth Manage ment and Service Corporation vs . Commissioner of Internal Revenue , C. T. A. Cases Nos . 3383 and 3578 , June 30 , 1987 , the case before us hardly presents a "gripping question or require a tortured ratiocination. As thus shown the basis for the claim(s) are (is) not short of specific support in terms of tractable data openly laid and fully disclosed . XXX XXX xxx . Respondent points to no factual errors nor superfluities which need be abridged . " The profit remittance tax of e31 , 527 . 22 involved in this appeal was paid by petitioner to respondent ' s office as tax on branch profit which petitioner in- tended to remit abroad. Due to losses subsequently incurred by petitioner, no profit however was actually remitted . It is thus clear beyond doubt that no pro- fit remittance tax became due and payable to the Bureau of Internal Rev e nue . 601

DECISION - CTA CASE NO. 3934 - 6- WHEREFORE, respondent Commissioner of Internal Revenue is hereby ordered to grant the refund to petitioner Yardley International, Ltd., the amount of 831,527.22 representing e rroneously paid profit remittance tax . No costs. SO ORDERED. Quezon City, Metro Manila, November 11, 1987. AMANTE Presidi g Judge WE CONCUR: (on official le a ve ) CONSTANTE C. ROAQUIN Associate Judge 60~