CTA Case No. 5331 (Decision)

/ .- REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY BAF$C ADVERTISIMG, INC., Petitioner, - vel"�sus - C.T.A. CASE NO. 5331 COM.HISSIOHER OF INTERNAL REVEJIUE, Ree1pcmdent. x - -- - - - DE<:::.IS:ICIJ<oJ vi t.hholdi:r�g Petitioner is corporation duly organized and existing under Philippine laws ith principal office located at Zaragoza Building, 102 Gamboa St. , Legaspi Village, Hakati City. The facta are simple. On .Januar�y 199�1, pet.i t.:it".mer, taxpayer, remitted to the BIR the sum of r:.z. 175, 478. 15 I representing the vithholding tax on the accrued bonuses of its eroployees amounting t.o P1.1,271,902. l3 < E;chib.i t.a �A� and �B-1-A�J Subsequently, petitloner withheld again the ithholding tax on said bonuses, allegedly brouh inadver-t.ence, P2,032,882.52 vhich it remitted to the BIR on February 28, 1994, March 25, 1994 and tlay 25,. 19'94. all lj ; : . J

DECISION C.T.A. CASE NO 5331 -2- In a amilar incident, petitioner also accrued the SUT>' cd P4B5, 2H9. 82 :fl(;:r t.he :fi:cst. calendalf� qua:o�te:r cd t.he 1994, as h\YH;e o:f:fice ch.:u�ges in :favor of FCB International, Inc. c�FCB", 1or brevity>, a co:rporation duly organized under the .l.awa:� o:f �the Stat.e o:f DelawB:n?, U.S. A. , pursuant to an agreement betveen the parties :�equiring petit.ioner t.c.� pay F'CH 2X o:f i t.s billings on CoJgate-PalmoJive AccounL. paid and remitted to the BJR monthly accruals :for said quarter in the aggregale amount. o;f P121, 322.70 E}thi l.d Ls "(-2-8", "D-�4" and "G-4"'; Petitioner's memorandum, p.2) However, :i. r. vi e>J eel the cancellatim of a.fore'ltJentioned SO'll"eement u�1 a ren.tl t. c�.f the Colgat,e-Pal Jlil<f.a.live Acc<rn.mt from the pet.j�tione�f� the said am.c.�unt. of ..harges wa.E.: neve:t� pa.id to FCB and neither was it claimed aa deduction in petitioner's taxable gross income 1or the year 19J4. Consequently, a written clai ior refund/issuance of tax credit was :filed by thE> pet.jtioner witt, the respondent on June 9, 1995 regarding the excess taxes vi thheld on comp<:Hlsation amount.ing to P2, (1:32, 882. 52 and the erroneous taxes witbheld on home o:ffice charges in t.he BUill o:f ?121,322.70, <E:>thibit "'A"}.

I�ECISJOII C- T- A. CASE 110. 5.331 - :3 - On February 19. 1996, petitioner followed-up t.s claim with a supplemental letter, but ineJ-.:p1icah1 y, respondent cont.inued h�r apparen�t i:nactic:tli'J on t.heo wat te:c. on Felbruary 1996. pet.i tioner was or..onstratned to inst.i tutA? th�o.> instc:mt appeal on ac:count o:f the nea:r expiry o:f t.he t.\fo-yu��ar period :f:r�om the date of payment o1 the tax within which a judicial claim for refund or issuance o:f tax credit may be seasonably begun, as �provided under Sec�tion 230 o:f t.he� Nat.ional Re�vwnue Code. At. bar, petitioner restated its Respondent, on the other hand, could only answer, int.er alia, that petitioner's claim is pending adminlstrative :investigation. trial proeeeded acco:rdingly and pel.tt.ione:c presented evi.d��oe in support, A careful exaination o1 such evidence convinces Us that pettioner has proven its entitlement for claim for refund. However with respect to the mount corresponding to the withholding Lax on the accrued bonuses of its employees, the total au proven, by the evidence presented is only P1,947.067.89 and not P2, 175,478.15 as claimed in the petition for review. A :final recomput.at.ion o:f the re:fundablt? granted to petitioner ia detailed as follows:

DECISIOJI e.T.A .. CASE 110. 5331 -4 - Wl1'1010l.DIHG TAX OH DOltUSES For the wonth of January 1994 (C-1-IU Parti.cul;ar Ex h. A111ount of p 806, '192. 76 Tgx WHtheld Centr�;d Group C-1-A Kac�ogr-aphica P167,323.9& South Division C-1-B 66,070.00 C-1-C forth Division C-l-0 143,017.06 C-1-E 93.656. 17 West Division C-l-F' PLOT Group 101#474.62 East lhvision C��l-G 52.. 487.32 171.763.65 F'o1� the month of Frbr.u;;u-y 1'994 ( Exh. 0-1-H> Particular Exh AfAI()unt of 800, 661.. 75 Central Group nacrographics D-l��A __T.-2.� Vittheld South Divisi�ln P183l, f)52. 33 Hol"th Division 0-l-B 20.. T10.06 0-1-C West Division 148,599.26 D-l-0 PLOT Grouli '34 854. '33 D-1-E 125-566.17 East Division u�-1-�F 6-4.227.67 D-1-G l.GJ-t 031. :33 For the month of April 1994 tExh. E-1-G) AIIU>unt. of Particular __!;�""'.h .__ . ___ _,T.=:a".t"i=-V;hx'd,el: Cent.ral Group tvam�ographics E-1-A P 89.348.49 South D.ivision E-1-B 1233.52 North Division E-1-C 74.456.60 Vest ui.vi.si.on E-1-0 50-426.37 339,613.36 East Oivisil.l!n E-1-E _EL_ T0T A L E-l-f 51.749. 5 62,39.9. WITHHOl.OIHG TAX 011 TECHNICAl. TRANSFER - I.UlYAl.1'Y _Mont!l_______ ..=E::.!.x h.,. �- AUiGunt nf ...LIur.J!it thelJ1 January 19941 C-2-�D p rt.. 999. 25 February 19'94 0-4 35., 759. 45 67.S64.J!Q_ Karch 1994 G-4 T 0 T A 1.. .P._UL 322. 10 TOTAL AMOUtfT REFUNDABLE

DECISIOH C.T.A. CASE HO. 533 -5- WHEREFORE, n view o:f the :foregoing, the instant Peti t.icm :fo1 Review is hereby GRAHTED. Respondent i.s hereby ORDEUED to ISSUE & TAX CREDIT CERTIFICATE in :filovor o:f petitioner� B.ASIC ADVERTISING. IIIC. the amc�un�t. of P2,068,390.59 iMmediately No cost.s. SO ORDE'RED. WE CONCUR: I hereby cert1y that this decislOh vas reched Tax Appeals in ccordance vith Secton 1. Article VIII o:f the Constitution. Presuu:lino Judge Court oi Ta Appeals