AECOM PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION AECOM PHILIPPINES, INC., CTA CASE NO. 8971 Petitioner, Members: -versus- DEL ROSARIO, P.J./ Chairperson, UY, and MINDARO-GRULLA, 11. COMMISSIONER OF INTERNAL Promulgated: REVENUE, OCTo 9 Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - RESOLUTION MINDARO-GRULLA, J.: For resolution is petitioner's Motion for Reconsideration (Re: Decision Rendered on May 7, 2018), filed on May 30, 2018, with respondent's Comment/ Opposition (To Petitioner's Motion for Reconsideration), filed on June 27, 2018. Petitioner seeks reconsideration of the Court's Decision dated May 7, 2018 (assailed Decision), the dispositive portion of which reads: "WHEREFORE, premises considered, the instant Petition for Review is DENIED for insufficiency of evidence. SO ORDERED." In the assailed Decision, this Court found that petitioner failed to meet the third requisite for the claim for refund or issuance of Tax

RESOLUTION CTA CASE NO. 8971 Credit Certificate (TCC), i.e., that it is shown on the return of the recipient that the income payment received was declared as part of the gross income, as provided under Section 2.58.3 (B) of RR No. 02- 98, as amended. As found by this Court, petitioner's total gross income declared in its Annual Income Tax Return (ITR) for FY 2012 amounted to P355,754,070.00. On the other hand, the withholding tax certificates reveal that the Creditable Withholding Taxes (CWT) in the amount of P26,937,862.50 was withheld on gross income payments in the amount of P266,743,675.69. However, this Court cannot determine whether the gross income payments of P266,743,675.69 indeed formed part of the gross income of P355,754,070.00 reported by petitioner in its Annual ITR for fiscal year 2012. In its motion for reconsideration, petitioner raises the following arguments: (1) the gross income payment that was received and is related to petitioner's claimed CWT was declared and reflected in its Annual Income Tax Returns for 2012 and 2011; and (2) Section 2.58.3(8) of Revenue Regulations (RR) No. 2-98, as amended, only requires, among others, that the income payments be declared as part of the gross income. It does not have to be on the same taxable year of the claim. On the other hand, respondent avers that the Court was correct in dismissing the case for insufficiency of evidence due to petitioner's failure to present its detailed general ledger and sales register or any other document whereby the income payments related to the claimed CWT can be traced and confirmed as forming part of the income reflected in its Annual ITR for FY 2012. After a careful study of the above allegations, the Court finds petitioner's motion bereft of merit. Petitioner still failed to prove that the gross income payment that was received and is related to its claimed CWT was declared and reflected in its Annual ITRs for 2012 and 2011

RESOLUTION CTA CASE NO. 8971 In its motion for reconsideration, petitioner asserts that the income payments from which the income tax was withheld were declared as part of the gross income in both its Audited Financial Statements (AFS) and ITRs for taxable years 2012 and 2011. To support its allegation, petitioner presented a summary of the tracing wherein it was shown that the related income payments that are duly supported by withholding tax certificates were reported in the years 2012 and 2011, indicating the Project Contract Code (PCC) as reference for the progression of each project to determine the amount of gross income declared in the particular taxable year, to wit: Payor Exhibit No Income Pa>[ment Tax Withheld Taxable Project Contract Aecom Philippines Consultant Corp. P-22 year the Code Aecom Philippines Consultant Corp. P-23 p 742,500.00 p 111,375.00 income Aecom Philippines Consultant Corp. P-24 MNLD11574 Aecom Philippines Consultant Corp. P-25 10,293,245.51 205,864.91 was Aecom Philippines Consultant Corp. P-26 declared MNLD11574 Aecom Philippines Consultant Corp. P-27 619,080.00 92,862.00 2012 MNLD11574 Asian Terminals Inc. P-28 263,359.50 5,267.19 2012 MNLD11574 Asian Terminals Inc. P-29 4,112,890.00 82,257.80 2012 MNLD11574 Asian Terminals Inc. P-30 2,715,310.00 407,296.50 2012 MNLD11574 Asian Terminals Inc. P-31 MNLD10533, Far Southeast-Gold Resources Inc. P-32 2012 MNLD10544, AND MNLD Far Southeast-Gold Resources Inc. P-33 Far Southeast-Gold Resources Inc. P-34 2012 11589 Far Southeast-Gold Resources Inc. P-35 MNLD10544, Far Southeast-Gold Resources Inc. P-36 7,543,740.20 1,131,561.03 2012 and MNLD11589, AND Far Southeast-Gold Resources Inc. P-37 2011 MNLD12056 MNLD11533 AND Fcf Minerals Corporation P-38 6,919,678.40 1,037,951.76 2012 MNLD11589 MNLD11533 AND Fcf Minerals Corporation P-39 6,207,071.00 931,060.65 2012 MNLD11589 Fcf Minerals Corporation P-40 MNLD11583 Fcf Minerals Corporation P-41 5,447,544.40 817,131.66 2012 Fcf Minerals Corporation P-42 313,980.00 47,097.00 2012 MNLD11583 Fcf Minerals Corporation P-43 158,070.00 23,710.50 2012 Fcf Minerals Corporation P-44 149,360.00 22,404.00 2012 MNLD11583 Fcf Minerals Corporation P-45 115,480.00 17,322.00 2012 Fcf Minerals Corporation P-46 2012 MNLD11583 Filinvest Land Inc. P-47 22,657,361.53 3,398,604.23 2012 Filinvest Land Inc. P-48 275,040.00 41,256.00 MNLD12189 Filinvest Land Inc. P-49 2012 1,848,864.49 277,329.67 MNLD11583 MNLD10541, 719,988.00 107,998.20 2012 MNLD11521, AND 243,996.00 36,599.40 2012 MNLD11588 1,299,160.49 2012 MNLD12039 AND 329,150.83 194,874.07 2012 MNLD11521 658,301.66 49,372.62 2012 MNLD12039 314,194.50 98,745.25 2012 MNLD10541 AND 243,996.00 47,129.18 2012 MNLD11588 243,996.00 36,599.40 2012 MNLD10541 164,500.00 36,599.40 2012 244,928.50 2012 MNLD10541 980,071.50 3,290.00 2012 4,898.57 MNLD11550 19,601.43 MNLD12039 MNLD12039 MNLD10554 MNLD10554 MNLD10554

RESOLUTION CTA CASE NO. 8971 Filinvest Land Inc. P-50 156,250.00 23,437.50 2012 MNLD10554 P-51 329,000.00 49,350.00 2012 MNLD10554 Filinvest Land Inc. P-52 329,000.00 49,350.00 2012 MNLD10554 P-53 125,000.00 18,750.00 2012 MNLD10554 Filinvest Land Inc. P-54 1,960,000.00 294,000.00 2012 MNLD10554 P-55 250,000.00 37,500.00 2012 MNLD10554 Filinvest Land Inc. P-56 980,000.00 147,000.00 2012 MNLD10554 P-57 11,203.89 2012 MNLD11582 Filinvest Land Inc. P-58 74,692.60 44,815.56 2012 MNLD11582 P-59 298,770.40 360,222.13 2012 and Filinvest Land Inc. P-60 18,011,106.34 2011 MNLD07603 P-61 157,112.54 2012 Filinvest Land Inc. P-62 7,855,627.20 MNLD07603 210,408.61 2012 First Gen Hydro Power Corporation P-63 10,520,430.74 MNLD07603 P-64 111,638.71 2012 First Gen Hydro Power Corporation P-65 5,581,935.71 MNLD07603 Int'L Container Terminal Services 4,731.54 2012 Inc. P-66 236,576.79 MNLD07603 Int'L Container Terminal Services P-67 107,677.64 2012 Inc. 5,383,882.01 MNLD07603 Int'L Container Terminal Services P-68 107,810.90 2012 Inc. P-69 5,390,544.92 MNLD07603 Int'L Container Terminal Services 124,660.99 2012 Inc. 6,233,049.63 MNLD07603 Int'L Container Terminal Services 106,722.21 2012 Inc. 5,336,110.56 MNLD07603 Int'L Container Terminal Services 126,193.94 2012 Inc. 6,309,696.88 3,738,752.51 MNLD07603 Int'L Container Terminal Services 2012 and MNLD11501 AND Inc. 24,925,016.73 2011 Int'L Container Terminal Services MNLD11553 Inc. 10,606,350.52 MNLD10534, Int'L Container Terminal Services MNLD11501, Inc. 10,631,997.14 MNLD11548, AND Int'L Container Terminal Services MNLD12065WW Inc. 8,974,219.70 MNLD10534 AND MNLD12065WW Manila Water Company 3,571,783.87 MNLD11548 AND MNLD11553 Manila Water Company P-70 524,642.87 1,590,952.58 2012 MNLD10552 AND MNLD11571 Manila Water Company P-71 409,357.13 1,594,799.57 2012 and MNLD10552 AND 1,372,490.00 2011 MNLD11571 Manila Water Company P-72 2,182,436.00 1,346,132.96 2012 MNLD10552 AND 7,403,147.00 MNLD11571 Maynilad Water Services, Inc. P-73 535,767.58 2012 and MNLD12038WC 50,065.00 2011 MNLD12038WC Maynilad Water Services, Inc. P-74 16,351,284.40 78,696.43 MNLD12038WC 2012 and MNLD11542 Maynilad Water Services, Inc. P-75 1,456,004.33 61,403.57 2011 MNLD11584 Oceana Gold P-76 484,840.00 27,449.80 MNLD11584 Oceana Gold P-77 175,000.00 43,648.72 2012 and MNLD12266 Oceana Gold P-78 516,530.40 148,062.94 2011 MNLD12087WC Quezon Power (Phil.) Ltd. Co. P-79 167,500.00 2012 MNLD12087WC Sagittarius Mines, Inc. P-80 168,644.00 7,509.75 2012 MNLD12245WC Sagittarius Mines, Inc. P-81 286,500.00 2,452,692.66 2012 MNLD12087WC Sagittarius Mines, Inc. P-82 2012 MNLD12197 San Miguel Corporation P-83 2,864,824.00 218,400.65 2011 MNLD12198 San Miguel Corporation P-84 4,297,236.00 72,726.00 2011 MNLD12198 San Miguel Corporation P-85 26,250.00 2012 MNLD11539 San Miguel Corporation P-86 780,500.00 77,479.56 2012 MNLD11539 Shell Philippines Exploration B.V. P-87 669,000.00 25,125.00 2012 MNLD12089 Silangan Mindanao Mining P-88 25,296.60 2012 MNLD12056 Silangan Mindanao Mining P-89 67,500.00 5,730.00 2012 MNLD11539 Sureste Properties, Inc. P-90 257,175.00 2012 Sureste Properties, Inc. P-91 557,500.00 429,723.60 2012 Sureste Properties, Inc. P-92 644,585.40 2012 Sureste Properties, Inc. P-93 117,075.00 2012 Sureste Properties, Inc. P-94 100,350.00 2012 2012 1,350.00 2012 38,576.25 2012 83,625.00

RESOLUTION CTA CASE NO. 8971 Taganito Mining Corporation P-95 1,275,478.80 191,321.82 2012 MNLD12240 1,913,218.20 286,982.73 2012 Taganito Mining Corporation P-96 2,210,650.07 331,597.51 2012 MNLD11555 2,210,650.07 Team Energy Corporation P-97 MNLD11555 AND 554,697.47 MNLD11558 Team Energy Corporation P-98 331,597.51 2011 MNLD11555, 5,304,096.20 83,204.62 2012 MNLD11556, Team Energy Corporation P-99 MNLD11557, AND Team Sual Corporation P-100 795,614.43 2012 and MNLD11558 2011 MNLD12173 Team Sual Corporation P-101 2,336,808.50 46,736.17 2012 Total MNLD11559, MNLD11560, MNLD11561, MNLD11562, MNLD11563, MNLD11564, AND MNLD11565 MNLD12164, MNLD12165, MNLD12166, MNLD12167, MNLD12168, AND MNLD12169 .. 266,743,675.69 .. 26,937,862.50 Petitioner claims that as per testimony of the Court- commissioned Independent Certified Public Accountant (ICPA), petitioner recognizes income based on percentage of completion method as stated in page 9, note 1 of the notes to AFS of the petitioner.1 Under this method, income of a particular project is recognized over a long time, often spanning several years, based on the percentage of completion of the project. A project is evaluated on a regular basis to determine the percentage of completion at a given time. Moreover, petitioner explains that under this method, although the income is recognized, the income payments would be made only when there are billings made. The billings do not necessarily have to be during the same period in which the income was recognized. As such, an income is recognized in a particular period while the income payment and the associated creditable taxes withheld would be recognized in a subsequent period. To prove that the income payments of the subject CWTs were declared as part of the gross income reported in the AFS and ITR, petitioner explains its procedures as follows: 1. Certificate of Tax Withheld (BIR Form 2307): Ascertained that income payments reported in the BIR Form 2307 are properly supported by Official Receipts and Invoices. 1 Exhibit "P-235", Q & A No. 14 of Amended Judicial Affidavit of Atty. Clifford E. Chua, April 7, 2016.

RESOLUTION CTA CASE NO. 8971 2. Accounts Receivable (AR) Account Ledger: Ascertained that the supporting invoices containing the income payments in BIR Form 2307 are properly recorded in the Accounts Receivable with corresponding number projects contracts. 3. Project Status Report (PSR) Account Ledger: Ascertained that the supporting project contracts recorded in the AR accounts ledger containing income payments reported per BIR Form 2307 are properly recorded in the PSR revenue account. 4. Audited Financial Statements (AFS) & Income Tax Returns {ITR): Ascertained that the Revenue reported per PSR revenue account are properly reported per AFS and ITR. According to petitioner, based on the foregoing procedures, the income payments received as per BIR Form 2307 can be traced to the official receipts and invoices issued by petitioner, to wit: Payor Tax Base BIR Form OR No. Invoice No No.2307 242 PH12-165 Exhibit No PH12-154 APCC p 263,359.50 PH12-153 P-25 PH12-165 APCC PH12-154 APCC 619,080.00 P-24 242 PH12-153 4,112,890.00 P-26 295 PH11-226 PH11-113 140 PH11-153 PH11-239 152 PH11-238 PH12-008 154 PH12-031 PH12-030 Asian Terminals 7,543,740.20 P-28 156 PH12-032 PH12-070 165 PH12-130 PH12-132 172 PH12-134 PH12-139 173 PH12-131 PH12-127 174 PH12-155 185 Asian Terminals 6,919,678.40 P-29 207 Asian Terminals 212 215 217 218 6,207,071.00 P-30 225 228 t

RESOLUTION 229 PH12-157 CTA CASE NO. 8971 232 PH12-156 Page 7 of 15 244 PH12-172 Asian Terminals 250 PH12-171 Far Southeast Gold Resources Inc 258 PH12-188 Far Southeast Gold Resources Inc Far Southeast Gold Resources Inc 262 PH12-187 Far Southeast Gold Resources Inc Far Southeast Gold Resources Inc 265 PH12-194 Far Southeast Gold Resources Inc 269 PH12-211 FCF Minerals Corporation 271 PH12-212 FCF Minerals Corporation FCF Minerals Corporation 5,447,544.40 P-31 280 PH12-231 FCF Minerals Corporation FCF Minerals Corporation 286 PH12-254 FCF Minerals Corporation FCF Minerals Corporation 291 PH12-155 FCF Minerals Corporation FCF Minerals Corporation 292 PH12-232 Filinvest Land Inc Filinvest Land Inc 313,980.00 P-32 192 PH12-107 Filinvest Land Inc 158,070.00 P-33 Filinvest Land Inc 149,360.00 P-34 226 PH12-146 Filinvest Land Inc 115,480.00 P-35 Filinvest Land Inc 22,657,361.53 P-36 240 PH12-164 Filinvest Land Inc 275,040.00 P-37 Filinvest Land Inc 256 PH12-185 Filinvest Land Inc 1,848,864.49 P-38 Filinvest Land Inc 255 PH12-186 First Gen Hydro Power Corporation First Gen Hydro Power Corporation 276 PH12-209 International Container Terminal 203 PH12-138 Services Inc PH12-089 International Container Terminal Services Inc PH12-090 International Container Terminal Services Inc PH12-137 719,988.00 P-39 222 PH12-091 243,996.00 P-40 PH12-088 1,299,160.49 P-41 234 PH12-170 329,150.83 P-42 254 PH12-184 658,301.66 P-43 314,194.50 P-44 PH12-192 243,996.00 P-45 243,996.00 P-46 279 PH12-233 164,500.00 P-47 244,928.50 P-48 279 PH12-234 980,071.50 P-49 156,250.00 P-50 270 PH12-213 329,000.00 P-51 329,000.00 P-52 287 PH12-252 125,000.00 P-53 1,960,000.00 P-54 287 PH12-253 250,000.00 P-55 980,000.00 P-56 143 PH11-172 P-57 74,692.60 P-58 145 PH11-099 298,770.40 153 PH11-218 180 PH12-025 181 PH12-027 188 PH12-073 211 PH12-075 235 PH12-074 236 PH12-145 178 PH12-210 179 PH12-081 206 PH12-113 147 PH11-223 18,011,106.34 P-59 PH11-236 PH11-240 PH12-034 7,855,627.20 P-60 175 PH12-069 10,520,430.74 P-61 195 PH12-110 PH09-126A t

RESOLUTION 5,390,544.92 P-65 221 PH12-104 CTA CASE NO. 8971 236,576.79 P-63 PH12-095 Page 8 of 15 P-62 246 PH09-126B 5,581,935.71 P-64 International Container Terminal 5,383,882.01 P-66 245 PH12-129 Services Inc 6,233,049.63 P-67 International Container Terminal 5,336,110.56 P-68 248 PH12-140 Services Inc 6,309,696.88 P-69 International Container Terminal 268 PH12-152 Services Inc 24,925,016.73 International Container Terminal 281 PH12-175 Services Inc P-70 International Container Terminal 282 PH12-204 Services Inc 10,606,350.53 International Container Terminal 162 PH12-224 Services Inc 10,631,997.14 P-71 163 International Container Terminal 8,974,219.70 P-72 166 PH12-216 Services Inc 167 PH12-182 3,571, 783.87 P-73 194 PH12-023 Manila Water Company 197 PH12-057 1,372,490.00 P-76 199 PH12-208 Manila Water Company 2,182,436.00 P-77 204 PH12-056 251 PH12-055 Manila Water Company 7,403,147.00 P-78 260 PH12-059 PH12-117 Manila Water Company 50,065.00 P-79 259 PH12-112 16,351,284.40 P-80 277 PHll-228 Maynilad Water Services Inc P-81 294 PH12-167 1,456,004.33 P-82 151 PH12-176 Oceana Gold 484,840.00 P-83 160 PH12-189 Oceana Gold 175,000.00 P-84 161 PH12-177 Oceana Gold 516,530.40 P-85 176 PH12-235 Quezon Power Ltd Co 167,500.00 P-86 223 PHll-225 Sagittarius Mines Inc 168,644.00 P-87 233 PHll-242 Sagittarius Mines Inc 286,500.00 P-88 263 PH12-029 Sagittarius Mines Inc P-89 296 PHll-210 San Miguel Corporation 2,864,824.00 P-90 193 PH12-150 San Miguel Corporation 4,297,236.00 P-91 168 PH12-151 San Miguel Corporation P-92 191 PH12-190 San Miguel Corporation 780,500.00 P-93 293 PH12-262 Shell Exploration B.V. 669,000.00 209 PH12-068 Silangang Mindanao Mining 219 PHll-229 Silangang Mindanao Mining 67,500.00 272 PHll-230 Sureste Properties Inc 257,175.00 288 PH12-261 Sureste Properties Inc 249 PH12-096 Sureste Properties Inc 238 PH12-147 Sureste Properties Inc 283 PH12-221 177 PH12-207 190 PH12-169 189 PH12-166 213 PH12-198 PH12-033 PH12-103 PH12-119B PH12-139 t.

RESOLUTION 557,500.00 P-94 230 PH12-158 1,275,478.80 P-95 CTA CASE NO. 8971 1,913,218.20 P-96 261 PH12-215 2,210,650.07 P-97 Page 9 of 15 P-98 299 PH12-275 2,210,650.07 Sureste Properties Inc 554,697.47 P-99 146 PH12-066 Taganito Mining Corporaion P-100 Taganito Mining Corporation 5,304,096.20 PH12-065 Team Energy Corporation 2,336,808.50 P-101 186 PHll-160 Team Energy Corporation p 252,058,620.19 PHll-216 Team Energy Corporation 285 PH12-201 Team Sual Corporation Team Sual Corporation 158 PH12-067 Grand Total 201 PHll-162 275 PH12-219 Petitioner maintains that upon identifying the official receipts and invoices of each particular income payment, the same may be traced to a particular PCC. The PCC allegedly identifies each construction project of the petitioner, iII ustrated by petitioner as follows: OR No. Invoice No Project Contract Code 242 PH12-165 PH12-154 MNLD11574 242 PH12-153 PH12-165 MNLD10544 295 PH12-154 MNLD10533 140 PH12-153 MNLD10544 152 MNLD11589 154 PHll-226 MNLD11589 156 PHll-113 MNLD11589 165 PHll-153 MNLD11589 172 PHll-239 MNLD11589 PHll-238 MNLD11589 173 PH12-008 MNLD11589 174 PH12-031 MNLD11589 185 PH12-030 MNLD11589 207 PH12-032 MNLD10544 212 PH12-070 MNLD12056 215 PH12-130 MNLD11589 217 PH12-132 MNLD11589 218 PH12-134 MNLD11589 225 PH12-139 MNLD10533 228 PH12-131 MNLD11589 229 PH12-127 MNLD11589 232 PH12-155 MNLD11589 244 PH12-157 250 PH12-156 PH12-172 --- PH12-171 0

RESOLUTION PH12-188 MNLD11589 CTA CASE NO. 8971 PH12-187 MNLD11589 Page 10 of 15 PH12-194 MNLD10533 PH12-211 MNLD11589 258 PH12-212 MNLD11589 262 PH12-231 MNLD11589 265 PH12-254 MNLD11589 269 PH12-155 MNLD11589 271 PH12-232 MNLD11589 280 PH12-107 MNLD11583 286 PH12-146 MNLD11583 291 PH12-164 MNLD11583 292 PH12-185 MNLD11583 192 PH12-186 MNLD12189 226 PH12-209 MNLD11583 240 PH12-138 256 PH12-089 MNLD10541 255 PH12-090 276 PH12-137 MNLD11588 203 PH12-091 MNLD11521 PH12-088 MNLD12039 222 PH12-170 MNLD11521 PH12-184 MNLD12039 234 PH12-192 MNLD11588 254 PH12-233 MNLD10541 PH12-234 MNLD10541 279 PH12-213 MNLD10541 279 PH12-252 MNLD11550 270 PH12-253 MNLD12039 287 PHll-172 MNLD12039 287 PHll-099 MNLD10554 143 PHll-218 MNLD10554 145 PH12-025 MNLD10554 153 PH12-027 MNLD10554 180 PH12-073 MNLD10554 181 PH12-075 MNLD10554 188 PH12-074 MNLD10554 211 PH12-145 MNLD10554 235 PH12-210 MNLD10554 236 PH12-081 MNLD10554 178 PH12-113 MNLD11582 179 PHll-223 MNLD11582 206 PHll-236 MNLD07603 147 PHll-240 MNLD07603 PH12-034 MNLD07603 175 PH12-069 MNLD07603 195 PH12-110 MNLD07603 PH09-126A MNLD07603 PH12-104 MNLD07603 PH12-095 MNLD07603 MNLD07603 t

RESOLUTION CTA CASE NO. 8971 I PH09-126B MNLD07603 PH12-129 MNLD07603 221 PH12-140 MNLD12158 PH12-152 MNLD07603 246 PH12-175 MNLD07603 PH12-204 MNLD07603 ! 245 PH12-224 MNLD07603 PH12-216 MNLD07603 248 PH12-182 MNLD07603 PH12-023 MNLD11501 268 PH12-057 MNLD11501 PH12-208 MNLD11553 281 PH12-056 MNLD11553 PH12-055 MNLD11548 282 PH12-059 MNLD10534 PH12-117 MNLD11501 162 PH12-112 MNLD12065WW 163 PHll-228 MNLD10534 166 PH12-167 MNLD12065WW 167 PH12-176 MNLD10534 194 PH12-189 MNLD11553 197 PH12-177 MNLD11548 199 PH12-235 MNLD11553 204 PHU-225 MNLD11571 251 PHU-242 MNLD11571 260 PH12-029 MNLD11571 PHll-210 MNLD10552 259 PH12-150 MNLD12038WC 277 PH12-151 MNLD12038WC 294 PH12-190 MNLD12038WC 151 PH12-262 MNLD12038WC 160 PH12-068 MNLD11542 161 PHll-229 MNLD11584 176 PHll-230 MNLD11584 223 PH12-261 MNLD12266 233 PH12-096 MNLD12087WC 263 PH12-147 MNLD12087WC 296 PH12-221 MNLD12245WC 193 PH12-207 MNLD12087WC 168 PH12-169 MNLD12197 191 PH12-166 MNLD12198 293 PH12-198 MNLD12198 209 PH12-033 MNLD11539 219 PH12-103 MNLD11539 272 PH12-119B MNLD12089 288 PH12-139 MNLD12056 249 PH12-158 MNLD11539 238 PH12-215 MNLD12240 283 PH12-275 MNLD12240 177 PH12-066 MNLD11555 190 189 213 230 261 299 146 t

RESOLUTION PH12-065 MNLD11558 CTA CASE NO. 8971 PHll-160 MNLD11555 Page 12 of 15 MNLD11556 MNLD11557 186 MNLD11558 MNLD11555 PHll-216 MNLD11557 MNLD11558 285 PH12-201 MNLD12173 MNLD11559 158 PH12-067 MNLD11560 MNLD11561 201 MNLD11562 PHll-162 MNLD11563 MNLD11564 275 PH12-219 MNLD11565 MNLD11559 MNLD11560 MNLD11561 MNLD11562 MNLD11563 MNLD12164 MNLD12165 MNLD12166 MNLD12167 MNLD12168 Petitioner further alleges that by identifying the official receipts and invoices that correspond to a particular PCC, the amount of income payments recognized for each project, including the period it was declared as part of the gross income, may be ascertained. The total income recognized by petitioner from all its construction projects is allegedly reported in the Progress Service Report (PSR), which is then used in the preparation of the AFS for the taxable years 2012 and 2011. As asserted by petitioner, the amount of revenue reported in the AFS and ITR for 2012 was taken from the totals of the MTD column of the PSR.2 Similarly, the amount of revenue reported in the AFS and in the ITR for 2011 was also taken from the totals of the MTD Columns of the PSR.3 Based on the foregoing assertions of petitioner, the Court summarized the MTD revenue amounts taken from the totals of the 2 Exhibit "P-229", !CPA Report, pp. 66, 69, 71, 72, 74, 79 and 81. 3 Exhibit "P-229", !CPA Report, pp. 82, 83, 84, 86, 88, 89, 90, 91, 92, 97, and 100. t.

RESOLUTION CTA CASE NO. 8971 MTD column of the PSR for years 2012 and 20114 and compared the same with the amounts of revenue per AFS/ITR, as follows: FY 2012 MTD Revenue Particulars 3110 TRA-Highway p 4,043,828.00 3112 TRA-Marine 3232 WUD-Urban Development 110,761,361.00 3237 WUD-Water 3508 ENE-Power & Energy 28,276,343.00 3520 EM-Environmental Management 3735 POD-Planning & Development 45,125,090.00 PerMTD Per AFS/ITR (202,213.00) Difference 125,555,674.00 FY 2011 Particulars 43,230,073.00 3106 TRA-RSS 3110 TRA-Highway p 356,790,156.00 3111 TRA-Aviation 3112 TRA-Marine 351,432,751.00 3232 WUD-Marine Development p 5,357,405.00 3237 WUD-Water 3415 BE-MEP MTD Revenue 3417 BE-Strucutal 3508 ENE-Power & Energy p 1,360,443.00 3520 EM-Environmental Management 3735 POD-Planning & Development 5,408,989.00 Per MTD PerAFS/ITR 44,995.00 Difference 99,014,605.00 16,483,215.00 79,517,679.00 (51,149.00) 65,724.00 449,982.00 57,361,441.00 39,302,715.00 p 298,958,639.00 317,050,222.00 p {18,091,583.00} From the above table, it can be gleaned that there were differences in MTD revenue amounts vis-a-vis the revenue amounts per AFS/ITR for years 2012 and 2011. Nowhere in the records of the case can such discrepancies be attributed to. Neither did petitioner provide a reconciliation and explain what constitute the discrepancies. Even if petitioner indicated in the first table, as presented above, the year where the income payments related to the claimed CWTs were declared, the Court cannot trace the same with certainty in the PSR. In other words, the Court still cannot ascertain whether the income payments of the subject CWTs were indeed declared in petitioner's Annual ITR for the FY 2012, or in prior years as petitioner claims. 4 The line details of the MTD Columns are printed in very small font that it becomes unreadable and cannot be clearly seen. t

RESOLUTION CTA CASE NO. 8971 Therefore, petitioner failed to comply with the third requisite. Petitioner must prove that the income payments related to the claimed CWTs were declared as part of the income in any given year, be it in the current or prior years, as the case may be. Petitioner alleges that Section 2.58.3(8) of Revenue RR No. 2- 98, as amended only requires, among others, that the income payments has been declared as part of the gross income. It does not have to be on the same taxable year of the claim. According to petitioner, it declared the income payments related to the claimed CWTs in fiscal years 2012 and 2011. Petitioner posits that the fact that portion of income payments was declared in prior years would not affect its compliance with the third requisite since Section 2.58.3(8) of RR No. 2-98 requires only the declaration of income payments as part of the gross income. While it is correct that the law does not require that the income payments related to the claimed CWTs be included in the AFS/ITR of the petitioner/recipient on the same taxable year of the claim, still, petitioner must prove that the same were declared as part of the income in any given year, be it in the current or prior years, as the case may be. Not even the testimony of petitioner's witness, Ma. Lourdes Lascona,5 that petitioner has documents to prove that petitioner included in its gross income declared per AFS/ITR the income payments subjected by the customers to CWT, can support petitioner's claim there being no proper reconciliation of the amounts per supporting documents submitted to substantiate the same. Likewise, the ICPA Report stating that "With respect to procedure no. 6, I ascertained that the income payments related to the amount being claimed were declared as Sales /Revenues/Receipts/Fees" is as well of no moment for there is nothing in the record to back it up. 5 Exhibit "P-16", Q & A No 24 of Judicial Affidavit of Ma. Lourdes Lascona, June 24, 2015, docket, vol. I, p. 97. t

RESOLUTION CTA CASE NO. 8971 It bears stressing that under Section 2.58.3(8) of RR No. 2-98, claims for refund involving creditable tax withheld shall be given due course when it is shown that the income payment has been declared as part of the gross income of the claimant. It is in this regard that petitioner fatally failed. As cases filed before this Court are litigated de novo, party- litigants should prove every minute aspect of their cases.6 Thus, there should be no room for inconsistencies, especially on the part of claimant, who has the burden of proof to establish the factual basis of its claim for tax refund. Well-settled in this jurisdiction is the fact that actions for tax refund, as in this case, are in the nature of a claim for exemption and the law is not only construed in strictissimi juris against the taxpayer, but also the pieces of evidence presented entitling a taxpayer to an exemption is strictissimi scrutinized and must be duly proven? Accordingly, the Court finds no cogent reason to reverse or modify the assailed Decision promulgated on May 7, 2018. Therefore, the instant Motion for Reconsideration should be denied for insufficiency of evidence. WHEREFORE, premises considered, petitioner's Motion for Partial Reconsideration (Re: Decision Rendered on May 7, 2018) is DENIED for lack of merit. SO ORDERED. fm.:n.t:&t l- o~N.LMuiND~AJRO~-G-RUCLL~A Associate Justice WE CONCUR: . ROMAN G. DEL ROSARIO AEsRs~~~~.stUicYe Presiding Justice 6 Dizon vs. Court of Tax Appeals/ eta!., G.R. No. 140944, April 30, 2008. 7 Atlas Consolidated Mining and Development Corporation vs. Commissioner ofInternal Revenue, G.R. No. 159490, February 18, 2008.