CTA Case No. 4503 (Decision)

REPUBLIC OF THE Philippines COURT OF TAX APPEALS QUEZON CITY CITIBANK, N.A. - PHILIPPINE C.T.A. CASE NO. 4503 BRANCH, Petitioner, versus THE COMMISSIONER OF INTERNAL REVENUE, Respondent. X- - - - - - - - - - - - X DEC a 0N This is a simple claim for refund by petitioner covering the arnoun t of 1='312,~.85 repr~ esent � ng alleged / over~payment of tax on gross receipts of its foreign currency deposit unit <FCDU) for the quarter ending September 30, 1988. Petitioner", Citibank, NA - Philippine Branch, is a cot"pot"ation engaged in banhing business. On Octob er �::�o' 1 '388, petitioner filed with he respondent, Commissioner of Internal Reven�.te, -- "statement (s) of quat"tet"ly gross receipts del"'i ed by banks from interests, discoLmts, div idends, commissions, profits from exchange, roya lt ies, rentals of propet"ties, t"eal and personal and all other items treated as Qt"oss income" under Sec. 28

DECISION - C.T.A. CASE NO. 4503 - 2- of the Nation a l In t ern a l Revenue Code for th e third qu ar t e r o f 1988 with the f ollowing infor mat i on: Tax Nature Gross Receipts Rate Gross Receipt s Tax FCDU account <EKh. "A"l -------------- - --- - -- -- 5')(. p 364,134.00 p 1,040~~3.0~ Regular account <Exh. "B"l p 5,498,847.25 0')(. nil p 50,440.22 5,044,022.50 1')(. 13,384,088.32 3lt 401,522.65 -~-66, 1Q..4d�7. 83 5')(. 18,305,111..J~ ~377,802,689.17� f18 ,757, 134. ~ Consolidated <Exh. "C"l p 5,498,847.25 Olt nil 5,044,022.50 1')(. p 50,440. 22 13,384,088. 32 3')(. 401,522. 65 -�~�.1J.i3_,J1_9.~.~J 5')(. 181669, 305.39 P378,84 ~ 1 072 .17�� P191 1211268.26 * should b! P39010301385.90 11 should bt P391 10701768.90 Th e aggregate amount of P19, 121,268. 2 6 was paid by th petitionar ws e vide nced by Co nfir mat i o n Petiti o net~ , thr~o �.t gh SGV and C o. , CPA s, f iled on .June 9 , 1989 a lette t~ �-c lai m f or re f u nd dated Ju ne 7, 1r:389 with the t~espondent of the amount of P 3 12 , 114.85 r e presenti ng al l e ged overpaid g r oss t~ e ceipts t a x fo t~ t h e from July 1 to S ept e mbe t~ 30 , 1 988 . As s t at e d i n t he 1 e t t e r ., the . a l l ege d o v e t~pa ym e n t ", c::n~ose ft~o m the applic a tion of th e wt~ong GRT t~ at e. , i . e . , i n s tea d o f 5~, the rate o f 35'1. was i n adve t~te n tly c.'\pplied." <Exhibi t "G">

DECI S ION - C.T.R. CASE NO. 4503 - 3- In the same claim pet iti oner contended: "We s ubm it that the appt"opt" i at e GRT rate is 5~ as indicated in S ection 119( c } of the Tax Code because t he FCDU oth et" i n com1? t"ept"e se nt s mi see 11 aneo us it em s treated as gross income under Section 28 of th e Te-a>< Code. T h e I.HH? of the 35~ as GAT rate is clear ly err oneous. The amount of the overpaymen t is P312,11 4.85, computed &B follow s: Per ret urn <P1,040 , 383 x 35% ) P3EA , 134. 00 Should be <P1,040, 383 x 5~) 52,019 ~15 Overpayment ~312 , 114 . 85" l. 9'30 ' pe ti tion@r fil ed this petition. The sole issue before this Court is wh ethe r or not petitione r" is entit led to the refund in the amount of P312, 114.85 t"eprese nt ing an alleged ovet"payment of ta>< on gro ss receipts of its FCDU account. The pt"ovision of law i nv ol ve d is Sec. 11'3 of t h e Tax Code , quoted as f o llows: "Sec. 1 1'3 . TaJ< on b ank s .and non- bank financial intermediar i e s . There shall be c oll ected a tax on gt"o ss t"eCt?ipts den"ived ft"om sol..tt"c es within t he Philippines by all banks a nd non-bank fina ncia l i ntermed iaries in acc ordance with the following schedule: ><><>< ><><>< XXX <c > On royalti es, t" e ntals of property, real or persona l, profits from exchange and all ot her it e ms treated as gro ss i n co me under Section 28 of this Code � ����"����� ��� .. ���� ���� 51.

DECISION - C.T.R. CRSE NO. 4503 - 4- )()( X X X>< XXXo II Fh? spondent, in h is Me mot"an d um, s t a ted, am ong othet" s, that t a >< es pr es umed to have been collec ted in accordance with law; that i t i s inc umbent upon p e tition e r to p r ove that it is !?ntitl e d fat' a t"e fund o f gt" O 5 S receipt s tax erroneou s ly paid; a nd t h a t p e t i tion e r failed to s uppo rt it s c l a im b y s uf ficie nt e v i den c e si n ce = " T h e t ' e i s n o e v i d en c f.~ s h ow i n g t h at th e FCDU' s other in c om e repre s ent s mi s c e 1 1 an !? <lll s i t e m~; t r e a t e d a s g r o s s in c om~? und�>t' Sec ticm ~?. 8 of the Tax Co de on wh i c h the ~i'1- gy�o r.s t"ecei. ptr. tax :l. s b a~; !?d. It i s fat" thi s t"e ason �that Mt' � .Jo !H? S un r~a, Jt'., the F~ev e nue Officer" wh o inve s tigated th e clai m for refun d t' e q 1.1 e s t . ti f' ~, o m co:\ n ~-~�l.c.tu.g,_g ___~~-e.:t. L..!"J ....-....9..f. ��. :i.. n.t~ () II! f) ...... 3... l'!..! . ., >< P."-'1..1... "\Ill I . ...~.f..C:I.J.~....._.._.__t.tt~-- !~.!: _. _ .. f~. nft. _1'\ ~t. ""'''gL,.P.~~~ hi b n~__. _;;_p_, .,_. _____J ~ f,Ji but Wh . cl1 p e t � i o !HH" f e. . l t d t t1 c o m~:!l y x ><>< � Ne i t h e \-~ did rlf~t;itiotH�� pres ent s.,id doet.lrfl �:l ht in !? v idenct>. T h e only evidenc e on h ~n d s howi n g the FCDU's gross receipt s for t he qua r t e r ending S ept e mbe r 30, 1988 is p e t i tio n er' s s tat e ment of qua rt er ly g r o ss receipts t ax fo r F CDU for th e th ir d qu art er of 1988 i n th<�? a mount of P1, 0Lf0, 383 . 0 0 xxx. Said !? vidl?n c !? i s in s u f fi c ient to sho w th e c<lrt~ e ct t a >< b ase for the 5'1- gros s t' !?ceipt s t a >< ><><x ." <Memot"andu m . for~ Respondent, C.T.A. Record s , pp. 75-76> Thel�~ e is no di s pute as t o the ap pl icable tax pt"ovision the cot't'e s pond in g tax rate . He!; pondent' s at~ gument i s based on t he premi se that petitioner failed to prove t h a t the a mo unt of ..�'l P1 , 040 , 383.00 is the cor rect amount subject to tax.

DECISION - C.T.A. CASE NO. 4503 - 5- This Court is not con vin ced. In a t' esolution dated Sept embet' 10,1 '392 , this Court admitted al l exhibits formall y offered by the petit io~er for failure on the par t of re s pondent to s ubmi t his com me nt or objection evi dencin g lack of oppo sition thereto. Respondent cannot now claim that the tax base a mountin g t o P1 , 040,383.00 is not supported by sufficient avide n c � Th t ax r t �.n"ns <Exhibits " A" and "C") whict were d uly received (Exhibit s "A-1 " and "C - 1") by the respond�~n t ar e suffici e.nt en ough on the part of the petitioner to de s tro y the presumption in favor of the respondent and to prove that petitioner is entitled for a refund. Respondet t alleged t h t p t itioner fa iled to respond to the reque st the re venue off ice r who inv est igc.,ted c l i m to ~;ub mit an a udited statement of inc ome and e><penses for the quarter ending September 30, 1988; thus, the amount of P1,040, 383.00 a s tax base i incorrect. It is ironic that wh il e the re &pond en t cla imed that the ta x base is inccnqt"e c t, he did not ad vance be fore this Cour-t any a moLtnt wh ich i n his opinion is th e correct tax base . He who alleg es a fac t ha s the of it, Victory ,, :' Shipping Agency National Labor Relations 722

DECISION - C.T.A. CASE NO. 4503 - 6- Commission, 200 SCRA 178>. Mere allegation is not evidence <Gat�aitan v. Court of Appeals, 200 SCRA 37). The presumption of cort'ect ness of the statements was not overturned by the respondent. In fact , respondent had authorit y to examine t h e b o o ~< ~~ a nd t' e c o t' d s o f p e t i t i o n e r and t o i s s u e a ss e s smt~ nt as to the cort' ect t '" x base within the pre s criptive period. His failm'e to do so should not, :i n an y way, prejudice taxpayer like the petitioner in this case. This CrJtn' t, as sanctuat' Y of taxpayers, grants the petition puy�~� uant to Sec. 230 of the Tax Code wh i ch pt' o v ides : "Sec. 230. Recover�y or tax er�J��oneottsly ot� illegally collected. - No suit or pr oc eeding shall be maintained in any co1..n't for the reco v ery of any n <.:\t ion.::~ 1 i nt et'n.:.d revenue tax hereaft t'H' alleged to have been erroneo u sl y or illegally a ssessed or collected , or of any penalty claimed to have been c nllected without authot'ity, or of any s um alleged to have been excessi ve or in any marmet� Wt'ongfully col lected, �..1nt il a claim for refund or credit has been duly filed with the Commissioner ; but such suit or proceeding may be maintained, wh ether Ot' not such ta><, penalty, or sum has been paid under protest or dure ss . In an y case, no such suit or pt' oceeding s h all be begun after the expiration of two years fr om the date of payment of the tax or penalty reg a rdle ss of any supet'vening cause that may arise aftet' payment: Pt�ovided, hf:n>~ever�, }" hat 'I t .b...!?_____!;;_Q_f!l mi s 2__i on ~L_.J!L? y , e v en wit h o u t "! ~rli:t~_n claim therefot', refund or cr edit

DECISION - C.T.A. CASE NO. 4503 - 7- ~.!'.!.Y.......:t~- wh ~-1':..~~ <J n t .he f .e.G..!? of the r~ e t..1!.!:.!!. !::!..RQ.n .~ h i ~tL...P_<U.i !'l n �t w~..L....!!!..@f!.il.J_..~_!,Jt~h g~ en t eQQ ~-.i: t" s ..�J.e ... "J...~.....:.t.Lb.......Y._q__q_~ en e r t" one o .,_l.�],_y, Q..!!.ts;!.. (Ut'\det~'i> CCH"i Tl y 9\ �. ! ppl ied.) )00( >OO< xxx." It c~n easily be adduce d from th e returns 'filed by t~�l e petitioner th t indeed, thet"e was a n overpayment of the gross receipts tax. WHEREFORE, :l.n view of th foregoing , respondent is h . rtby ord red t o i~&u~ a tax c r edi t the petitioner r~presenting gro~� rece ipts tax erroneously paid. SO ORDERED .. Quezon City, Metro Manil a , July 21 ,1993. WE CONCUR1 GRUBA t'esiding Judge Judge ~ ~~.1~ i' RAMON O. DE Associate Jud e ,_1 " '~ ~ (I

- -- DECISION - C. T. A. CASE NO. 4503 - 8- I hereby certify that this decision waa reached after due con5ult a tion mong th m mbers of the Court of Tax Appeals in accordance with Section13, Article VIII of the Constitut i on. ~$).~ ERNEBTO D~ ACOSTA Pr1niding Judge Court of Tax Appeals .. �'