CTA Case No. 2454 (Decision)

I . REPURi,JC OF THE PHILlP:Pl~ES COURT OF TAX APPEALS QUEZON CITY CAr TILAN LUNBER COlviPANY, Petitioner , - versus - C. T. A. C SE NO . 2454 THE COW1ISSIONER OF I NTERNAL REVENDE , Respondent . X- - - - - - - - - - - - - X This is an ap pe al from the decision of res- ponde n t dat ed cto ber 22 , 1972 denying petitioner ' s request to s et aside the assessment in the amount of ~2 1, 02 6 . 26 as de fici ency income tax for the year 1968 . Petitioner i s a corporation dul y or g.anized and exist ing by virtue of the laws of the Philippines . It files its income tax returns on the fiscal year basis , its taxable year commencing November 1 and ending October 31 of the f ollowing year . For the fiscal ye ar 1967- 68 (November 1 , 1967 to October 31 , 1968) , p e titi~ne r computed its income tax on the basis of the old rates of 22% and 307'~ , as pres- cribe d in Section 24 of the Revenue Code , pr ior to it s amendment by Rep ublic Act 543 1 which provides that the Uprovisions of thi s Ac t shall apply to in- come for taxable ye a rs beginning after June 30 , 1968 . n Hm.veve r, respondent computed the inc ome tax of petitioner based on the new rat es with re spe ct

DECISION CTA CASE NO . 2454 to i t s income earned from July 1 , 1968 to October - 31 , 1963 . As a result , res pondent assessed against petitioner a deficiepcy income tax of ~21 , 026 . 26 inclusive of interest . Thi s was protested but was denied by respondent in his decision dated October 2, 1972 . Hence , this appeal . The sole issue in this case is purely one of law, i . e ., whether or not the increased rates of corporate income tax of 25~!.1- 35% tax prescribed in Republic Act No . 5431 should apply to petitioner ' s income received from July 1 , 1968 to October 31 , 1968 . As the taxable year of petitioner begins on November 1 , the beginning of its taxable year after June 30 , 1968 , is November 1 , 1968 and not July 1 , 1968 . Accordingly , it was error for respondent to apply the nevi corporate income tax rates on the income of petitioner beginning July 1 , 1968 . (See Ivlanila Times Publishing Co ., Inc . vs . Comm . of Int . Rev ., C. T. A. Case No . 2263 , December 17 , 1973, cert . denied in G.R. No . 1- 38154 , Nay 10 , 1974 ; Philippine Match Co . , Ltd . vs . The Comm . of Int . Rev . , C. T. Ao Case No . 2422 , February 19 , 1975 , and cases cited therein . ) \VHEREFORE, the decision appealed from is hereby reversed . No pronouncement as to costs .

. :. I DEC ISION - CT CASE O. 2454 3 SO ORDERED . uezon City , October 1 , 1975 ~----., RO!v'Jl N . Uti LI Pr esiding Judg e vJE CONCU ~-It-- ' I ~EO IJ" L . VANCEN Associate Judge.