CTA Case No. 4491 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ANSCOR INSURANCE BROKERS. INC. � Petitioner , - versus - C.T.A. CASE NO. 4491 CO"MISSIONER OF INTERNAL REVENUE. Respondent. X- - - - - - - - -X DE C I I 0 N To this Court, petitioner through counsel appeals from the decision of the Commissioner of Internal Revenue denying petitioner's protest and reiterating the assessment for alleged deficiency c ommercial broker's tax and fixed taxes for tax years 1981 and 1982, in the amounts of P2,445,295.26 and P2,527,502.76, respectively. Petitioner is a domestic corporation organized and existing under and by virtue of the laws of the Philippines with the primary purpose to act as insurance and/or reinsurance broker in such lines as fi re, marine, accident, engineering, life, health, aviation, � liability, casualty, plate, glass, steam boiler, elevator, burglary, rent, credit, indemnity,

DECISION - C.T.A. CASE NO. 4491 -2- earthquake, typhoon, automobile, fidelity and all other kinds and classes of insurance and surety bonds. The Insurance Commission has licensed petitioner to act as Insurance Broker by and through certain authorized officers of the company. On September 3, 1985, petitioner received deficiency fixed and percentage tax assessment and demand no. NARD-81-82 -B-85, dated July 26, 1985, for taxable years 1981 and 1982 totalling P4,972,798.02 computed as follows: f!~e4.1.~xes !~l !~ Basic Taxes P1,000.00 P1,000.00 Less: Taxes Paid _!_QQ!.OO Deficiency fixed tax p 900.00 ~00 Surcharge - 251 Total -~!00 p 900.00 201 int. for� 2.01.81 to 9.01.85 201 int. fro� 2.01.82 to 9.01.85 P1,125.00 _m.oo Total 1,031.29 P1,12S.OO -- ---- -~.29 f.tJ~~~ P1,931.29 Pe~.!.~ T~t.~ P38t 230t 456. 00 P33t 652. 702. 00 P2, 293,'827: 30 p 2, 019,162.10 Gross m:eipls 61 tax due thereon ___!J~ 91~!.7.~ - 677�.9.12�1ll less: Taxes paid Deficiency percentage tax p 1,147,013.60 p 1, 342, 139. 79 Surcharge - 251 _ _135, S~i� 92 Total __1_86, 753. 40 p 1,677,674.71 201 int. for� 2.21.82 to 9.01.85 p 1,433,767.00 201 int. fro� 2.21.83 to 9.01.85 __ _M..L 896. 80 Total 1, 009, 371. 97 P 2.. 525. 571. Sl - ---- - f_k_!!3, 138. 97 GRAID TOTAL The deficiency assessment arose on account of respondent's finding that petitioner is allegedly a

-- - - - -- - ~ DECISION - C.T.A. CASE NO. 4491 -3- commercial broker and failed to pay the necessary privilege tax receipt and the correct percentage tax due on gross receipts in violation of Sections 188, 192, 193 <a> and 208 of the Tax Code, as amended <Exhibit "R", p. 117, C. T. A. records.) On September 30, 1985, petitioner protested the aforestated assessment. <Exhibit "5", pp. 119- 125, C. T. A. records. There was no reply from respondent. On July 25, 1990, respondent filed a complaint with the Regional Trial Court of Quezon City for the collection of aforesaid deficiency tax liabilities, docketed as Civil Case No. Q- 90-6241 entitled "Republic of the Philippines versus Anscor Insurance Brokers, Inc., ". <Exhibit "U", pp. 127-129, C. T. A. records. > A copy o� said complaint together with the summons was served on the petitioner on August 15, 1990. This collection suit was considered by petitioner as the final decision of the respondent on the protest filed which is appealable to this Court. <Petitioner citing Repub1ic vs. Li� Tian Teng Sons & Co�� Inc., 16 SCRA 584. > On August 30, 1990, petitioner filed the instant petition for review. <PP� 1-5, C.T.A. recorda. Thereafter, a motion to admit amended petition for review was filed by petitioner on May 919

- DECISION - C.T.A. CASE NO. 4491 - 4- 4, 1991. ( pp. 41-53, C. T. A. records.> There being no objection from respondent, the Court resolved to grant said motion. ("Resolution", P� 73, C. T. A. records. In an order dated December 11, 1990, the Regional Trial Court of Quezon City dismissed the collection suit against petitioner for lack of jurisdiction. ("Order", pp. 67-68, C. T. A records. ) Respondent did not file a motion for reconsideration nor a notice of appeal of the said order. It was only on August 19, 1991 that respondent filed an answer to the petition for review. ("Answer", pp. 82- 87, C.T.A. recorda.> The sole issue for resolution of this Court is whether or not petitioner is a commercial broker and as such subject to ixed and percentage taxes under the Tax Code, as amended. A close scrutiny of the chronology of events would show that the deficiency a ssessments dated July 21 , 1985 but received by petitioner on Sep~e~.!!._~!:._-~_,__.],_9~5 were i ssue d by respondent well within the five year period of limitation to assess pursuant to Section 318 <nov Section 203 > of the Tax Code. The complaint filed by respondent vith the Regional Trial Court of Qu zon City on Ju~~~90 to enforce collection of said deficiency assessments

DECISION - G.T.A. CASE NO. 4491 -5- vas likewise made within five years following the assessment of the Tax as provided under Section 319(c) <now Section 223[cJ) of the Tax Code, quoted below: "Section 319. Exceptions as to period of limitation of assessment and collection of taxes. - XXX XXX XXX <c) Wh ere the ~-~-~-~-~~!!!.~Q.t. of any internal revenue tax ~afl_. been made within !. tlf:?. __.Q_E;-~_!9.Q__g_:[_l..i.JJ.!.~-~-~-!;_:i,_QI1 above - prescribed, ~~QQ_t.~~-~-pe _~Q~~-~gt~~ by distraint or levy or p_y__.!!_R_roq~~d~.!19 in court, but Ollll i._t _.!>_~...Q.!!!l.r_ <1 > ~j,.1_h:i.:_rr.__t_:!o_y_~~ar!L.J1!..f_ter_t.1t~ !!~~gf:!l_li!m.~n_t_q~!L~ ax..._ or <2 > prior to the ex p iration of any period for collection agreed upon in writing by the Commissioner and the taxpayer before the expiration of such five-year period. xxx " <Underscoring supplied. > The petition for review was timely :filed with thi s Court on A...~.Q_\l~..t_.~.Q.,___J .990 or vi thin thirty <30> days fr om th e eceipt by petitioner of a copy o:f the complaint for col l ectio n on .A~.Q.~_Ii!..t_,t;?,____,t~~9....t... in accordance with Section 3 15- A <now Section 229 > of the T x Code. It was on account of this appeal that the Regional Trial Court of Quezon City dismissed on p_"'"_c;:_E;>!'!.~-�'r... ___!J.t_.__.!.'?._9._Q the complaint for collection for lack of jurisdiction based as it is, on an assessment that is not yet fin a l and executory and vi thin the exclusive appellate jurisdiction of the Court of Tax Appeals pursuant to Section 7 o:f the 82

DECISION - C.T.A. CASE NO. 4491 -6- Republic Act No. 1125. Respondent did not avail of the other remedies for the collection of said deficiency assessments precisely because of the judicial action pending before this Court. It is therefore not true that the right of respondent to collect the assessed deficiency taxes has already prescribed with the dismissal of the complaint for collection and its failure to enforce collection thereof through other remedies within five years following assessment of the tax. The propriety of the assessments were disputed and still awaiting resolution by this Court, hence they have not become final, executory and demandable pursuant to Section 315- A <now Section 229> of the Tax Code. Respondent contends that petitioner is a "commercial broker" based on the premise that it is a "commission merchant". This was denied by petitioner and claims that it is neither a "commercial broker" nor a �commission merchant�. Ironically, both parties cite as authority for their conflicting position the same definition in the Tax Code, as follows: "TITLE V. TAXES ON BUSINESS Section 187. Words and phrases defined. -

--- ---- DECISION - C.T.A. CASE NO. 4491 -7- In applying the provisions o� this Title, words and phrases shall be taken in the sense and extension indicated below: XXX XXX XXX <t> "Commercial broker" includes all persons, other than importers, manu�actures, producers or bona �ide employees, who for compensation or pro�it, _q_t_ s~!..L....9X._ !:?..�.~..!!Q._S! b o '}. t __g;_~.l~_f;l___Q_;r___.J.!U L_q_!l~ s_es .!!!~.!:9..h.S!!!.~ it:t~--'- for other persons or bring proposed buyers and sel l e r s together, or negotiate freights or other business �or owners of vessels, or other means o� tr ansportation . The te r m :I:..!H;;.lJ.lde~ 9..2..'!'.!'1 ,t.s~_ t..Q_r)______!!!g.r.:.9.h.~.n :t.~. . ( Underscoring supplied. > XXX XXX XXX <w > "M ~h. nt." !!t~_ _ _a _ __JL~r.-~.QJl ~.9.~9�'SL. J._~_ J:u~...- qa .l,-~~..�.!:!...f.tu.___Jl...t__fl..K9..!t a n_g_~ of pe~ son al groperty of whatever gJ:u.traQ....t-9.. -!... Except s sp cial ly provided, the term includ e m nufacturers who sel l articl a of their ow n production. <Underscoring supplied) XXX XKX. " A " c o mmi e on merchant", according to respondent, is a commercia l agent whom the possession of personalty ia entrusted by or for the owner, to be sold, for compensation, i n pursuance o� the agent �s usual trade or business, vith title to goods remaining in the principal. of Internal Revenue va. Calvallader Paci�ic Co�pany, L-18297, Novembe r 29, 1966 : 18 SC RA 833. ) On the other hand, petitioner d efines a �commission ) merchant" as one engaged in the purchase and sale

DECISION - C.T.A. CASE NO. 4491 -8- for another of personal property which, for this purpose, is placed in his possession and at his disposal. He maintains a relation not only with his principal and the purchaser or vendor, but also with the property which is the subject matter of the transaction. <Pacific Co��ercia1 Co�pany vs. Yatco, Moreno's Philippine Law Dictionary <Third Edition>. The crux of the controversy appears rooted in whether or not "insurance" is a personal property or a merchandise in the contemplation of the foregoing provisions of the law. Respondent considers it a personal property hence, one who negotiates and procures it for a commission is considered a commercial broker. A contrary v~ew is held by petitioner who claims that insurance ie neither a personal property nor a merchandise and there:fore ita purchase or sale does not make one a commercial broker. The term "merchandise" may be and often is used ) as the synonym of "goods", "wares" and "commodities" <Hartwe11 vs. Insurance Co�pany, 84 Me. 524, 24 Atl. 954). Webaters Third International Dictionary <Unbridged, November 1972 printing) defines the aforesaid words as follows:

DECISION - C.T.A. CASE NO. 4491 -9- "Merchandise" as "the commodities or goods that are bought and sold in business ; the wares of commerce". "Goods and Chattels" as "animate or inanimate personal property that is visi ble, tangible and movable and has intrinsic value in itself as distinguished from real estate or freehold property or from personal property of the class of chases in action. "Wares" as "manufactured articles, products of art or craft or farm produce offered for sale ; articles of merchan dise; goods; commodities." All these terms connote something tangible as distinguished from intangible things. A contract of insurance is an agreement whereby one undertakes for a consideration to indemnify another aqainst lOf=u=r, damaqe or liability ariFiinq from an unknown or contingent event <Section 2, Presidential Decree No. 612, as amended>. It is part of a plan to distribute the risk among a large group of persons bearing somewhat simi lar risks <Agbayani, Commercial Lava of the Philippines, Volume II, �1986 Edition], pp. 5-6). Certainly, it is not a tangible object or a merchandise. Accordingly, one who sells or brings about sales or purchases of insurance is not a "commercial broker". "Insurance" is neither a personal property as contemplated in the definition of "merchant" in Section 187<w> of the Tax Code, as amended. Since n �_) ~ \.} ,-..., t}

DECISION - C.T.A. CASE NO. 4491 - 10 - petitioner is not engaged in the purchase or sale for another of personal property, it is not a "commission merchant" which is included in the term "commercial broker. " This Court had occasion to rule on a similar issue in the case of Warner Barnes and Co�pany. Ltd. vs. CoMMissioner of Interna1 Revenue <CTA Case No. 1825 dated September 21, 1972/G.R. L-35798, January 4, 1978). In said ca e, the Court made the following declaration: ~The commission r~ceived by pet t'oner as insurance agent of Commonwealth nsurance Company are not subject to the broker's perc ntage ta x <GX o g r oss reeeipts) because petitioner is neither a c omm rei 1 broker nor a comm saion m rchan under the above at tutory d~ init � n". ( re:f rring to Section l94<t> of the Tax Code.) XXX "The Supreme Court in th case of Behn. Key r end CoMpany Li ited vs. No1ting and Garcia (3 PhiL 274> defines a b oker in its bro d scope as follows: ��. A broker is gener lly defined as one :!.h 9. .....!.~.....!!tH9ag_e.~. - :t'.P.r.........Q.:~.ti!?.X.::~.._ _g_n ~- ....9C?..~.!!!..:i.....gt.... .9Jh.....- .1L.9.9..t._:J.JiltJ.Jl.g _____Q.Q.D t ~a ct. !'..~- l~_tJ... Y..~.....t ..q .._J!LQP.~X..t.Y........'!.:.i...t.h.......t.tl e _...Q_~st od_y Qf__.__~hJ....9.h.. ... ...hE?. .......ha e .......- JJQ___c:;;..P.n.Q,.qJ:nJ.. the negotiator between other parties, never acting on his own name, but in the name of those who employed him; he a strictly a midd eman and for some purposes the agent of both parties. (19 Cyc. , 186: Henderson vs. The Stat , 50 Ind., 234: Black's Law Diet� on l"Y. ) A........b ~.C!.~.E?-~---��� ffil._____ qn~ w~ o ~-~---9.C:P u_p__"t;.J.p ~-���� �.. __...t Q_ QrJ.n.9.........P.il~l :rj:.J.,._~a.

DECISION - C.T.A. CASE NO. 4491 - 11 - .t.9 g~_!;h~L____t;_Q__Q.~ :t.Q~ i..!\..L__qr_____!, Q.---~-ru:: g~!.rr f. C?.L__t_l}~m..______!_n__m.~J;_t._~r s o :f trade 9 QJ!!.m.~:r;:g_e o r_n.~ v !g_~_t i of!. "From the foregoing statutory de.finition of a "commercial broker", the Supreme Court's definition o:f a "broker", and our analysis of the indispensable elements constituting the consideration and activity of a commercial broker, we hold that t he compensation received by petitioner as an insurance agent is not subject to the commercial broker's percentage tax. In the first place, a commercial broker deals in transactions involving personal property like me rchandise and freight. In the sec ond place, an insurance agent deals on activity ot h er than th ose e numer.ated in Secti on 194<t) of the Revenue Code, ~U~!:~� And finally, an insurance contract invo lves indemnity while the services o:f a broker invo l ves agency. " XXX XXX XXX "Under th �oregoing d fin tion and considering the anal ysis and discussion previously made by t h � s Court, we cannot hold petit oner a commission merchant subject to the commercial broker's percentage tax i mpo sed by Section 195 o:f the Revenue Code. " As can be ead 'ly noted in t he discussi on , the selling of insurance by petitioner is not within the purview of the term "commercial broker" or "commission merchant", and therefo re, it is not subject to the GY. commercial broker' s tax. ) Ironically, this case started as a claim :for tax credit o.f a lleged erroneous ly paid 31. c ontractor 's tax for taxable years 1981 and 1982 in the amounts of P1,146,913.72 and P677,022. 31, 92

DECISION - C.T.A. CAS~ NO. 4491 - 12 - respectively. Petitioner contends that the sale o� insurance cannot fall within the nature and classification of the 17 items listed as subject to contractor's tax under Section 191 <later renumbered 205) of the Tax Code, as amended. Hence, there is allegedly no legal basis for the payment of the 3Y. contractor's tax on commissions derived from sale o� insurance. <PP� 112-115, BIR records. > Since respondent did not act on it, petitioner brought the case to this Court and docketed as C. T. A. Case No. 3602. The only question involved in said case is whether petitioner insurance broker is an independent contractor within the meaning of Section 205 of the Tax Code. The Court, in a majority decision dated December 28, 1987 ru led as f ollows : "We conclude and this is all that We need decide that the petitioner corporation "who acts as a middleman between insured and company, and who solicits insurance from the public under no employment from any special company and places order of insuranc e with company selected by insured or in absence o� any selection, with company selected by such broker <P acific Fiere Ins. Co. v . Bowers, 162 Ba 349, 175 S.E. 763, Black's Law Dictionary, 4th Ed. 945)," is precisely the kind of activity which the term "!.ng~ p-~_Qg_!?_Q1;._...._.Q.Q!l.tr.~.P.-t.Q..r. " was designed to embrace. And , We sh _ll be 1 sa than respecting the full and compelling import of the statut e should We grant further exception into it. Petitioner cannot have the best of two worlds. <Underscoring supplied. > 9 <r.):.. uc .J

DECISION - C.T.A. CASE NO. 4491 - 13 - WHEREFORE, petition is hereby dismissed at petitioner's cost. " The a:foreetated ruling was rei t erated by the Court in its decision dated January 15, 1988 in C.T.A. Case No. 3920 � nvolving the s ame parties and the same issue but covering the period April 1983 to February 1984. When appealed on certiorari, the Court o:f Appeals :found no cogent or compelling reason to deviate :from the a bo ve-quoted ruli ng o:f this Court hence, it dismissed the petitions in both cases and affirmed the decisions of the Court of Tax Appeals in �.T.A Case No . 3602 and C.T.A. Case No. 3920 in its decision promulgated on May 15, 1989 . <GA-G. R. SP No. 15559 and 15560. ) The Supreme Court r esolved to deny t he petitioner's mot�on :for reconsideration with :finalit y, no cogent reason or substantial matter having been adduced to warrant the reconsideration sought (G. R. Nos. 88370 and 88371 dated October 4, 1989.). However, p ior to the :foregoing Court . decisions, Revenue Examiner Gavino v. Pineda endorsed on October 15, 1984 hie :findings upon investigation that instead of excess tax payments, there are deficiency :fixed and percentage taxes. 0 'J - J ,_ '

DECISION - C.T.A. CASE NO. 4491 - 14 - Petitioner is allegedly a commercial broker subject to 6X tax on its quarterly gross receipts but it only paid the 3X contractor's tax. <pp. 136-137, BIR records. > Accordingly, assessment and demand no. NARD-8 1 - 82 - B- 85 dated Ju ly 26, 1985 was issued on petitioner . This gave rise to the instant case which involve the same parties, the same taxable years, covers the same subject matter, causes o:f action and issues as already decided in C.T.A. Case No. 3602. Petitioner t hereby invoked res judicata. Briefly stated, this d oc trine o:f res judicata is that an existing final judgment or decree rendered up on the merits, and without :fraud or collusion, by a court o:f competent jurisdiction, upon a matter within its jurisdiction, is conclusive of the rights of the partie a or their privies, in all other actions o r suits in the sa me or any other judicial tribunal of concurrent jurisdiction, on the points and matters in iss ue in the :first suit. <30 Am. Ju r. 908; National Bank v. Barretto, 52 Phil. 818. ) The fundamental pr inci ples o:f res judicata, finality of judgment and estoppel by judgment which are interchangeable in meaning are embodied in Section 49, Rule 39 of the Rules o:f Court which states the :following: 830

DECISION - C.T.A. CASE NO. 4491 - 15 - "Sec . 49. ~.f.:f.~_c;j:_Q.;f_ _j_\!QQ...l!'.�_' tl t �.. The effect of a judgment or f nal order rendered by a court or judge o� the Philippines, having jurisdiction to pronounce the judgment or order, may be as follows: XXX XXX XXX ( b > In other cases the judgment or order is, with respect to the matter directly adjudged or as to any other matter that could ha ve been raised in relation thereto , Q..QJlQ. t,t~.i.Y.~ between the parties and their successors in interest by title subseq uent to the co mmencement of the action or special proceeding, li tigating for the same thing and under the same title and in the s ame ca paci ty. <Underscoring supplied.) <c > In any other litigation bet ween the same parties or their successors in inter at , that on1y is deem d to have been adjudged in a �or mer judgement which appears up n its face to have been so adjudged, or which was actually and necessarily incl uded therein or necessary thereto. " The doc trine of rf�' judicat a h s two aspects. The first is the effect of a judgement as a bar to the prosecutio n of a second act ion upon the sa me claim, demand or cause of action. The second aspect is that it precludes relitigation of a particular fact or issues in another action between the same parties on a different claim or cause of action <Lopez va. Reyes, G. R. No. L-29498, March 31, 1977, 76 SCRA 179 >. Th us , a party by varying the form of action or method of case presenta tion cannot escape

DECISION - C.T.A. CASE NO. 4491 - 16 - the effect of the principle of res judicata nor can a party avoid an estoppel of a former judgment by bringing forward in a second action new or additional grounds in support of his case or defense or new arguments to sustain it, the facts remaining the same at least where such additional matter could have been pleaded and adjudicated in the prior action. <Filinvest Credit Corporation vs. I.A.C. and Jovito z. "anaoag, G.R. No . 66641, March 6,1992, 207 SCRA 59>. In order that there may be res ,iudicata, the following requisites must be present: <a> the former judgment must be final~ (b) it must have been rendered by a court having jurisdiction of the subject matter and of the parties: (c) it must be a judgment on the me ri ts; and (d) there must be, between the first and second actions, identity o:f parties, of subject-matter, and o:f cause o:f action. <Alejandrino v. Cardona, 70 Phil. 281.) Using the aforesaid checklist as yardstick, We find that the doctrine of re-s judicata applies in the case at bar. Consider the following: (1) The judgment rendered by the Court in c.. T.A. Case No. 3602 was affirmed by the Court o:f Appeals and the Supreme Court denied the motions for its reconsideration with finality. 832 )

DECISION - C.T.A. CASE NO. 4491 - 17 - ( 2 > The CTA, CA and SC have jurisdiction over the subject matter and t~e parties to the case in accordance with law. ( 3) The judgment was based on the meri t.s of the a~gumente and the evidence adduced by the contending part i es. <4> In both CTA C ~ se No. 3602 and the instant case, the parties were i dentical, the taxable years ' inv o lved wer ~ the all documentary and �' test ~ monial ev i qe~ c e p~es e~ted in the f i r s t case wer e � adopted aJ. ld' o. ff e .r :e;'.d1 the second case,o, th~ sub ~ e~ t matter a~d th~ ~~~ s ' of action were likewis~ ' ~ .' the sa me. . ,: I t is a r ~ l e, lo nQ. � rec ogn i zed in this country, ... tha t a judgme n~ b et"e~n the same parties is concl usive, no t o~ ly a.,~ t o th e subject mattt:t"r in cor~roversy in ,the act i e n upon which i t is base~ b~t also in all q ther . a,.�.:�t ct i o n s involving the same ' ,. question, and upon all-. ~:�� matters involved in tne issues which might h a v'e t> e en litigated and decided in t he case, the pr~ a~ mption being that all such .. is~ues were met and d egi ded. It is not the policy of the law to allow a ~e w and different suit b~twe~~ the same partie~:J, . c~.p.'.ncerning the same subject neither mat~~ r, that has a~r ~~~ y been litigated~ wil t the law allow th_r _� p ~ rties to t r ifle wi ttl � tta!=' �', ''). �� () ' ) r v �u ~...)

DECISION - C.T.A . CASE ~0. - 4~91 - l8 - courts by pie c~me~l _ ~itigation. <Palanca v. Quiros, .. ~ . . 10 Phil 360. ) The doctrine -.o...f.� ..r~s judicata is an old axiom of "'. '�� 1 the law, dictate~ ~y" wisdom and sa nc tif ied by age, and . : ~ .~ . . ,. the is founded on the ~~op~ principle -that i t is to .....' .'� . . ~ . interest of the publt.o that there should be an ~- � ' ~ ,w � � ) __ � � �� � end ~o� litigatipn ,by the same parties and their fully and f airly �. i . .. ,,�;':' privies over a subject. once ': 1, � � � . In~eed~ '' th~ very object of instituting .� ... the oourts of ju~~~_c~ ~~ that l i t i gat io n shoul~ be decided, and dec~d~c$� _:fi.p�~~~Y� for human life is not . . � . ..J. � ,��- ' long -� enough to l(lq:~w pf -:.~at ters once dispose~ of beinQ brought un~er ...d~ isc. ~'s.' .~~ .i... pn agai n . <Fernandez v. ~n view t h e r.�e o .f , ", ~e � � pold trat the jud gmen ~ iQ ;_ C.T.A. � Case No . .. ~~0,". .\?��. ; - ~-ia � qonclQsiv~- .\ rega r ding 'the matt~ f that p e.t i. tt on e r ... in s u r a n c e- � � .b.;oker is an ... �.-�.~.. ' . "inq ~pendent coritr~ctor" liable to the 3Y. '~ ' ~ l ,I � � '. x't. contr~ctor's tax ~ :; _/� >fl~~ --. categorically stated in '' ,. the f~Qdings of the Court ' of Appeals that: "Since p4Pt+.t.ip" ~ r is eng ag ed i n the 'q! ~a,\.e of ins ur~;tnee for: a fee and . does not � .f4f.l. under any ~~~ -: eKceptio ns -~xpres sly me�ntioned by the la'f� . <refers to Section ~q5 of the Tax :todfi!.�:_ t; i t is thus s ubject to the 3X contractor~ t fee � �' ~' .I � "xxx, an irieu.-.rance broker is an to 3Y. ~ inde p endent cont~~~tor� subject Ruling qoptractor 's tax . ....�. �.- : .'Cci ting BIR dated April 12, 19 7~i ~ ., .. 8 ' } - . u ... �. i'1 '~ .. . � ._� I

'~' .... �' ' ... . NO.' ,. . �' DECISION -:- 4 4 9 1. - C.T.A. CASE '~ : -". - 19 - "It is clear from the foregoing that insurance brokers who~e activity consists in the ' ;� ren~i tion of services for the a~sured a~~ ~u bjec t t~ the 3X contractor's tax imposed i n SectiQn 191 of the Tax Code Cndw Sectio~ 205> � since the insurance of ' br oker does � not fall within the definition a commercial broker as defined in Section 1~4<t> �'alae,; "pt . the same Code xxx. � ({bid. ) . - :. . ;.!. ~- W~EREFORE, the disp uted assessments for ' taxes for taxable defioi ~nc y fixed p~ J-p entage and year ;:. 1981 and - ~~82 the total amount of P4, 972, 798. 02 are h...ereby pancelled and set aside . No c o s,t. a . ' 50, -ORDERED. , �. Quezon City Met r o M~n~la, ~ �f � WE CONCUR: ce~\Q~~ ERNESTO D ACOSTA presiding Judg_~ ~ - ~ss ociate Judg ~

,. �.� �. DECISION C . T. A. CA!"; f Nf? - 11�1 1 - 20 - .I � CE RTIFICATION .. J.. .�, . . .� . I hereby certify that this decision was reacheq � I ~ after due consultation among t h e members of tp~ Court of Tax Appeals i ri accordance with Section 1 3, A r~icle VIII of the Con s t i t u tion. ~\Q,~ ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals