CTA Case No. 818 (Decision)

REPURt'.TC OF THE PHILIPPINES CO(;RT OF 7TAX APPEALS QUEZO~ CITY S'rATES STEAMSHI P COMPANY , C.T.A. CASE NO. 81 8 Petitioner, versus COMMISSIONER OF I NTERNAL REVENUE, Respondent . X- - - - - - - - - - - X DE C I S I 0 N Petitioner, a foreign corporation engaged in the shipping business i n the Philippines, sought the refund of t he alleged overpaid income tax of �4,020. 00 for the calendar year 1957 based on its amended income tax return which was filed with respondent's office on ~ay 25, 1959. Because respondent Commissioner of Internal Revenue failed to act on petitioner's claim 'for refund, an appeal was filed with this Court on May 13, 1960 . On March 31, 1958, petitioner filed with respondent's office its 19 57 i ncome tax return , showing and declaring therein a net taxable income of �27,385. 00 and paid i n- come tax on account thereof i n the amount of ~ 5,477. 00. Petitioner's 19 57 i ncome tax return was pre pared in Calif ornia, U.S.A. by the Vice President of the shipping company and subscr i bed and sworn to before Phi lippine Vice Cons ul Domi nador P. Amor. Subsequently, petitioner filed with respondent's office a 19 57 amended

DECISION - "I ' CTA CASE NO . 818 2 income tax return prepared by the accounting firm of Sycip, Gorres, Velayo and Company, petitioner ' s attorney- in- fact . Petitioner ' s amended income tax return shows -a net taxable income of ~4 , 284 . 26 and an income tax ~ue of ~~57 . 00 instead of ~27 , 385 . 00 and ~5 , 477 . 00 , respectively , as declared in the original return of petitioner . The discrepancy arose from an adjustment of petitioner ' s financial statement . It computed its Philippines allocated deductions by applying the formula pursuant to Section 37(b) of the National Internal Revenue Code and Section 160 of the Income Tax Regulations . This case was submitted to this Court for decision by the opposing parties on the basis of their pleadings and the BIR records . Petitioner contends that sufficient evidence was submitted to the respondent Commissioner of Internal Revenue � to sustain the validity of its claim for .refund . On this point, petitioner relied on the amended returns and the enclosures in the original income tax return reportedly authenticated by Philippine Vice Consul Domina- dar P. Amor stationed at California, U. S .A. We disagree . An examination of the 1957 original income tax re - turn of petitioner shows that the same was merely sub- scribed and sworn to before � the Philippine Vice Cons~l at California, U. S .A. by the Vice President of the (iJ:l

DECISION .:. CTA CASE NO. 818 3 foreign shipping companJr . The financial statement of income and expenses enclosed therevli th was not authen- ticated by our consular official stationed at California, u.s .A. Neither were the world gross income and expenses used in the formula requi red bJr Section 37(b) of our Revenue Code reflected by the head office books of ac- count of petitioner . Not even petitione r ~s world - wide financial statements and balance sheet for 1957 , duly audited by its u.s . certified public accountants, as well as petitioner's duly authenticatea copy of its 1957 U. S . income tax return, submitted in evidence . Consequently, this Court is not satisfied from the evidence of record that petitioner is legally entitled to the refund of the alleged overpaid income tax of �4 , 020.00 for 1957 . Petitioner further contends and argues that, in- asmuch as respondent Commissioner of Internal Revenue had issued an assessment for ~857 . 00 on the basis of peti - tioper ' s amended income tax for 1957 , the assessment in question is tantamount to a confirmation of its 19 57 income tax liability . We find no merit in the said argument . An examination of the BIR records shows that Assessment No . 90- EAC - 59- 58 for ~857 . 00 was prepared by respondent ' s office (BIR rec ., pp . 17- 18) . HovJever, it will be noted that the said assessment was for the

DECISION CTA CASE NO . 818 4 calendar year 1958 .and not 1957 . Moreover , the original and duplicate copies of the proposed assessment were never issued and released by the respondent to petitioner and the same were cancelled by respondent's office . WHEREFORE , petitioner's claim for the refund of the alleged overpaid income tax of ~4-,020 . 00 for 1957 has to be, as it is hereby, denied. ' ithout pronounce- ment as to costs . SO ORDERED . Quezon City, August 25 , 1976. WE-CONCUR: �