CTA Case No. 4791 (Decision)

6' REPUBLIC OF THE PHILIPPHlES COURT OF T /\X APPEALS QUEZON CITY WESTIN HOTELS & RESORTS- PHIL. BRANCH, Petitioner, - versus - C.I .A. CASE NO. 4791 THE COMMISSI NER OF -;AJ. INTERNAL REVENUE, Promulgated: Respondent. _ A_UG_2_9_'1_99_4 X- - - - - - - - - - - - - - - � - - - - - - - - - - - - - - - - X DECI:;ION 1. Tllat f >S� Uti�� �n~r 'N 7:tin Hr_:�t.�Hs ,)< F.e3N�ts - Phil. E�ratKh is ::t r>:>sid~nt hrBign (:orporat.ir)n duly license<! under � n l) l~r�Lr�..:..:.,..:.1..r.ird1t".",'".::>'".::.� �<�::1~.1, Tl~.1<6:' ~VYn~~ e-:�fJl�l F1�l 1��l t�['.!.-..'1�1�l'Y-�' Pl.�,:�,...:,...3., ,.~_..r_F' i~JJ�!L [-�1'e.':'... ..p ,v-1,l�k=~�.��=�� tll~ State or D.s-l~.vrare, un �tE><l Stat~ :� of Amerka. 2. That on April 16, l ':l'~O. p~Utirmer filed v-1ith the ()2..i.

DECISiON- CfA CASE NO. 4791. �� Pn~~..., .., � income of r 19,964, 1:,,7 .00 and an itKOn1;;. t:--.x du.>? ('[ P6.9()7, 45::~.oo. From the said mcc�rn~?. tax r:lue. pt=!tition'r credtted b .) O..uarterl~J~ DI"��V, m~-?r~~ m3de this v, ear 46.3,327 .00 c.) Creditablo?. T::l�{ 'Ni~hlHid .3,2 90,910.0 0 3 Tl18t on M:=.l.y 6, 19Y l, p~titkmer file' i ~n :::tmencJed (c:-rp.on.\OO incorn~ tax r~t.urn f0r 1909 after it dtscoverecl that instBad or n~al!zing incotw:.> f1 ow 1ts man8gement operations 1t ::.unount o1 P-16.3,327.00 ;: tl� l t11-: r: t ed1tabl~ vdt111olding tax at F,."'Jro::e amountlng to P3,2 90,910 Ot) ret�ult..:d t.;:) an O'terpayrnent p 1.i'l 4t-11.,:.:.:,. C-�l_'\tl'.�1 C'f <�.) J 7t C:; ~.6. 1 C....,. ""i') "11� ('10 ..,. 1 4. Tll:Jt on April 14, 1<~j(JJ, pe-titioner tilecl with t.lle re~.ponden t a. claim for refund or issu.3nc:e of ~ Tax Credit Certificate in the amount of P:.,754. 2.37.00 as overpaid incomo?. ta.x for tlle year 19(\9; 5. Tliat petitioner h;=_:,s inE�tituted t.L-lis :::ppeal to preserve its rights u tYler Section 230 in rel.:_~.tion with Section 204(3) of tlle N:Jtion;3J Intern::J.l Revenue Code. 82 2

DECISJON- CfACASENO. 4"Nl - P"~!.."�f' 3 - y<":-:=Jr prt-.:� nr.� bt;e retY�.. i �~.S rrc , �led for in S'?r-tirltl 23 0 of the T3.X '>:,de Fu;:tllermore. smc~ pet1 tt 0n~jr 's <::l::t.im for r efund or t3.X �:r<?(lit. is :::till pending in ~.T-9-stlg,tton l..":>y tll~ Eur~~f.lJ of Interna.l ;�>f f I'}... .:' i J' ~ 1 � 11� t�!'r=�.�,c~ ,.\ t'.l.. d !'~-.'~..r.) tYt!. .t.l't...t..:.,.t} ("l ��-=t t.1. r-.) t�1 v .... '1�'l of ,:, ��t .il.)l'l - .,. � "' ., � f ,)[' Ir. .:..[l~.1~ ._ � (lf t "J ~-~ ,~ t- .:.. r�ll ~ t-[ \Lt.�o. t_=. _l,'..,�..:_JT..1 :'1\1J~~ t� 11..-1~ -;o- <:;; n-i...:"-.#.' tJ 11rr~'1 ~V�-1i � ' i: .J � (Bank of the Phillpp�n~ Is1a nds as Liq llidator of Paramount ll.J.:ce-ptance- CJJr t>r'i.Uon rr _ Comtt: issioner of .-, . �., ,�;t- T::> r�<���'!c. �~ � �~~ �;_, - ' �� J" �t1�1.:. v -:T._ & �.., -� !=.�lll-,'Ll.l '.�Jl . t~.�) .:>�_ �� � - cc�mpu.te.-:1 fron:t the t.ln1e c.f filing t11e AdpJ.:::tm<?nt Return or 1\nnu.al Incorne Tax Return ::_~nd final payme 1t of the t~3x. (Commissi~:>ner of In ternal Rt?ven Ie v _ TMX Sales, Inc_ and t h e Court of Tax Appeals, G.R. No . o3736, January 15, 1. 992; Commissioner of Internal Revenue v. Asia i�..ustralia Express, Ltd., G.R. o59)6, Resoluti n dated r~-. prt'1 10, 1909J 82

DBOSTON- CfA C~SE t.JO. 1791 C�>'J'?) [ACCRAIN l nves tm~nts Corporation v. The Hon. Ct)urt of Appeals, ~t. aL, G.R. No . 9f>.322, December 20, t 9911. :;,.,,�ttrm ?t)(b) �:)! tllr> -=;;:.m~ l,odo? pf()Vid~s th':}.t the final :..IJust.m<?tt~. r.:-turn sh:~ll b-:- 1iJ.::.,i �.) l or b.::.for'S' ttle 15th day 0f i\.f.�fil '~�f 1:�t1 i>f \>.:>( 'lt ~ th-? 1c;.th rJ, I'('>{ th"? 1tth month f1 11() lit1J2" th- f 1;. K I..J r.:.tu �n <::lp11 1:-.:. p;:)i�l ::'lt. th-:- titne tlta: r.:.hJrn is fllP..J . In the recent .��):;:;:. of Frtr E st Bank and Trust Company /Foreign Currenc;r D~JP sit 1nit v . Commissioner of Internal Revenu, CTA Case N�~ s 4y5r} aud ,';t4l. May 5. 19 94. this ''It shr)1Jll b':" nt�t.:..J t1r)t h.::.r;..in r~tl ~i~:-n<?r ;::~.-) ,'f't: t11~ r�::) l.:.lt�!.Jr ?;;;.,:, bc.=:i�;:. 1'f t""'F':rtln ? 1+-3 1!1(r)!TI~ ~,n,; .~:..�,-J,rt�, ..�:.t"1:.,..:;�.-. :. " � ~,.i,. <-:"4k.� 1~��J� �;.:..:�1 t:�.r, ,,-<~ ....;.,1.1,r::., f-�....,�,� �.-� �.�,1�,.:-.r ~I .l 'c �_. " � �� '� � ' I,.. J. J, .. 1 }J,. � .� � ,' t , ,_.,t " , i- --~�.f... f��:�t-t' 1.~'�t.�L,.;.l� It i~ 'tt�� .,. ,t.:..-.,,~. 1",-c- r. �~�����t�... .... J. ... "~~�r!�'-..t. i1- 1:5 1~~ �37 Tll~] T 0~-~ 1._ �! :~ .J: -~... , q 11:1=; ( ~~! �)r b~'""-�t~ t- .. l t:' l':l� r��� i!.~t-il' tt'C'' t�.:.ht ; ..., .,c~- tnrn ' I , 1r)�~I '. . "' � -,' J. &,., .�... J. .1 ...)_l t'l'l. ' I,. - ,. .. � l'Jl..'_=, -'� .� ! -lJ. l t; t::.r; ~~<?:'It"'~ ~.\�jti" n '�'\It� \1 1 i ;l .. ;, ':�l! i~t.:.n ~ lJ.im fr~,r I r,:.fun,'l 'N'irh p,.� ~: >tt tfr>i-=;;v�t r.:.. r C:�f Tnt.::.rr�Jl F:-?venlJ<:- .:m�:t "'7ith th~ C(.Jtrt <(�,Jnt,.-..:1 ft��:�m {\pril 1 ~.. 1�.)>7. th>7> dJ ~,::, V1h~n p.atiti ')Il~t H rPqutrr:-� i t/J r.~ its fin al 2\r.:l:'-., ::Jma.nt rt;>t n.rn Tl)t'-0';.:. ~.::.rlnireni\?1 t; ~l�.r~r~ duly compH>:>.J �~�~ itli by f�":!.i! ;,.)t~-?�r. (n Aprt 1~. 19e<J. p8titi,..Jn~r fil~.-:\ ,n <:.. n!t-11:.2. '� :~U1 ..bt? c~)mnH~:;:;ioner of In':.:;.rnJ.l Revell 1J.~ a. dJ.uu f :�r r~f' nd and �)11 h~ S;Jme da.? fil-ed a c<,urt sui t f� r Ut~ f9fund t.'lf the alleged ez.�ess tax p8 ym~nts B� �fl l iJtf,> ~Nritt.:.tr natm tor r.s-J.,_m,�j and the pEi-t!~i~:on for rc.viG>P 'l�.1Af~ ill.;od witlun tlw t�l'\~o -ye::J.r pPriod ::1s th"" 1:-r,t.r e~q�rc.r.::::ly :-md dearlv CT,il. !n��r � ,-. ,, , .1,-.1+.::�:.-_::�, T l �l,c:. �J�,:.. �f-.�T�..:... ~.~���-,:�:. .J-,'r�, ����!� r- .:Jqr,.�l 1 ~ !._- ._... ;::: ._.. , d.� .. J � .: � 1 1.. , � � - � � �� CI- If;:� 43~/:r l!.;=:t':� n<� t ;�...:.'. r:<~ii':.::._l " 82 4

DEUSION- CfA CA.._'-ili NO. i~Ni - Page 5 - c:()(le. r-:r~t.it.1r)t1t&f 11;J::; 1J.r� t.r) ./-=2.r�ri1 1~! . 1::;~~~;(.! t!) fil~ it~:; fit1 ;:~.1 if!(()!11e f~'z r~tu.rn _.:;,I)_ n1 l_c�.. 190(; f:::dl::: c.n. ::' Sunda.v H th~ date for filim:,_�, ~ it. ;:J.<::tuall v ' On April 14. 1992. pe.t.itk:�ne.r filed ~.vit.ll the respondent 3. ~.vritten . she r-�resent ;::u1y ~'7idenc-e- t::::. ::;upp�:)rt. her a.11::;1,.1Nr. In::tead. she 825

DEUSION- CTA Ck.""E NO. 4791 ~ h-s- :un(::.unt of t::c: V?1th1wLl t11ereirom ." (Citytrust Finance Corp . v . The Commissioner of Internal Revenue, CTA Case No . 4134. November 11, 1991 ; Citytrust Finance Corp. (Form�-rly Investors Finan(;- Corporati�::Jn/FNCB Finance) 2 1 F~._br::,rn_ :_ aP:"l Q t) ~ \ J.r __, � .f .&~ ,. -f.�,. �� r�� it .'-:-.~ 0.-.,.�-:.�, .1..-_.L,. ,.:,:,J_:l. ,..-.- ��/. ... d-1�1� �:-_.t; 1'---d 1- ~� r:�_:.:�_;r�r�-~� ~; ) ()d (�1. 1� r�1':-:r. \,r_-.vc:- ,..-/�.�-�'t.1� t�l� �,.t-1�1�:-.-.t_h., ,_.. '- 1J.:.'>-::�:-''���-���"�=�"i�n-t-"t--� '1-'1r ,--.-.' . ~-� . -~( I D), in tll.s- ;:J.m>::HJ.nt of ._.1 -� �' {)26

DE.J.::ISION- CIA CA._SE NO. 4791 - Page 7 -. ~. C'?.rtiHr:::a.t.'?. �:A Credit::tble Income T:::t.x 'vVitlllldcl .~. ..t arnount (A 1v1;:m:Jgetnent Fee as P65,�3 1(~i, 196.00 and a \.~\vitllho::Jlding t:Jx of .PJ.2 90/H)9..::JC! (Exh . F). on t11e b;:J.sit; of t11e pleadings a.nd records after petitioner has t c� fi ;:>1l1. ��l;.:::.t�l,.-.;:. .1~� �, � I �, ' �' 1 '�' �,�. t � ;'.�:'::�.c-�' ;�.:�.t�l t'��;�.-::�:. ('�1 :'=--1� 1�1,'.�-l ,�.,-�.,1""!-;�.:,:�:. t� .:::..-�1 1. - � -' J. ��.� '- It is nc�tei,<~lort.hy to pr:::�int that tl1e ..~. rnended Income Tax n;:.t t It-lr�r;t�I-1.::. r:.. --� -�1'-1'�1"t"l t..�-�.�,l+ rJ:-.�t�...:.::--.�~ti..t.t"'.�.�..;r�-1�..:.:,:.1� 1�,.-)�r� .-11�i;.:_.. �)T' t-::-::�","_::-_11" tn:'!t:.)�(:'� .-_=.�11~-'�----� .v~\��c._�. �'=--��� �i._~r r-,�-�---�.�-c���c-�' (-)1- ... 'J' ��. , _. t .-�;.�-- ;..:_:.:...~..:,...1-r..�,l:�:-:--.lLit�l,. t 1�1 ;.:::. ,�.--+jl"�c-��(--T�.L;.:�-:�:1.:r-;�'�:-:-�1!-l.t_�.V,. t\,,,;rl�l;.::._:..f-1~ �.:_1_.c_..rL-~�..;.-:_:.:. ,.._-l (._ll J_!_l� f-lCf -.)--..}. J-..;�:.�. 1"1.P..,.".:_f_!_1� f-1C;=I��� 1,1, l1�1;..:.::.!-1 _. ._. 0 "Q. Ho;,..,r V�ta:; til<? a.nY�u.nt F�S.290,9 10.CH) arrive-d at ' ,\ll� tt-11-Jc.ldl�I���~:� ;:1qP.!�1r. ~' -�,=� . -. 'k-;.')i V0111- I .L - - -� LC� i - -� PJ.. Tl1s- .3. r.nillh)n pe:::�::.::; ..,.'1';:1.:; l)a:::ed on c:, :t of t11e incc�rne pa.yment. fc�r 19f/)? Q. A. 0. iiVhat. t11e taz t�ase f�~�r credita ble taz �,Nithlwld ....r:r:: 3omettling lite F6S.OOO,OOO.OO plu::;, v.ra.::: rf>_. t.,J.rn H1.-i �11��-=-�' '�-:�'�1�_.-lr�-��,J_H_...-~�t..- ...-_I .:-:�.....-_�. t�~-.~r�;.�:-:�.,�..--1+ 1�,L-.L, v/ ,.-..,,. -1�1� i...,t-lc_:c_it-l--1�;._: t_;-_1_.~...:.. I...: 827

DE0.5ION- CfA CASE NO. 4791 -PageS-. .!!.. . ��l�-� I��I ,-; ?-rl ��� �� tt--�,?...-. ;�--����=-t�1-1��C-�?�~�- t.-l-1"..". nc.-r ,.-_.�.,c_.�.c_�. 1.!-1;.-_.�(_i.t-1-1"._". 1(~'1".". ._ r�l'A t� t;' .... �J. ._.._ ,..J-.!- ... .A. �=t,-�tJnl �J:)C_:,.,!�.:_! ..,f._-.,'7}~ .. )~.?J 7' ��(-i� (-J� �=1J't lF1lh7 t-A�-�rn-�t-A,.�.-:;�>A._. t-lt-�--=�- tAt}A�-� �: .�.�-�~. �:. �-���-�-�-��-� .,. 1- prTP.l-lliP.~=; 1-(:,!- ti'-lP. T~p;::11- 1(l ?,(i -\ - -� - - - - - ,\ - -� -� �-� .r. Can y.::)u pba:::e expl::1.in v.,rli;.r V�la::: there (li:::crep::ttKy !)etV�.leen t11e incor.ne pah:l t�y .Philippine PL:c:l a.nd tha.t ~Nhich y.:)u. reported tr.) the :elf.:? A. The incorne paynwnt of 1}65. 0 1.~i.. 196.00 v.rhich i::: :=:h�:::.T~�\iiJ. in the certificat.' of tax Vlitlllwld at source actually include::: a part of 19f�c� incorne t.li.a.t. ..,.-.l::ts paid in 1969 :HKl for Vl11id1 the 5% tax ~~~l::1.s a.l::�) V�.lit.ll1Jdd in t11e yea.r 1969. (}. ~Nh;3.t i::; tlh?. accounting system for reporting t:;.xe~: in the BI R-~~ ,i!.,_ Accrual m&t.hod." r>;:::.ti �=�.:. to:: 1(_) I .. ........ t'Ji..(..).,1-..1;..:.:.:.1- 1..1_'.1Ir... A.... T,,,,�,'!1. ._..... rr�-,��-l,::_._,,�=,_,�.A_. t-1�.t.,...:_.. r�-l' 1:1-1 A....\TI1.(..-. l..:...l-1i.-..�,.A...,. 1. ....,. \!-_-�J. \!'_) !-!(_:-r..�..�t�I-1-~ Tax Return 69-7 l. c:T.l!.J. an income of P44,302 . ~:.2 7_1)1) and creditable of 1 I.. ���.-., � --1 .-. + ,,. tl�� -. t�- �� t1- ���1 ' n.t' _,�(=-) ~-,_c)1 r�:�JJ.,�-.,.�~ __;�).l.-�.~~J--- . r- r- .-..- l. �,:�.~l,..JL1 1J. t... (.1..r-J~}.-)'::'c.t twt-ld--._. l,,}.i c�f 1e 11 ,.�-:J. \.):.(._,) .c,\,.;�~ T�,:��,�Tl. _ llt-l.t' '...1J. .1 incor.ne 'l�lZ1S reported at. P44,30L::,2 7.00 more by P7,7f.4,2 67.00. ..l!.,nd since �petitioner is under

DECISION- CTACASE NO. 4791 - Page9 -. petitioner 's clahn for Havin!,2_,� satisfa_d{)rilv' a..) Qua.rter Incorne T::Gi J>a.;.rrnent .--l;::. (, 1 'lt-1r ;:::.r� 1 .---,1-, � -.-1 -~ J. \ �.I. "" ~- .... ... I�.J1�1~-\�~;'r -~ (j(o:;o 1 J .... ._J .... ,I -� - � -� .' L BIR P:~nmpnt. Ord;::.r Nn c: c:, 162 ?, 1~ --I "' - "' - � - . - - �� ._. 'J ,-J~ �t-lt-_-1 (�-�-Lt:!, r�~-.�.�--�-, L.- l�H�t�t��n� -�~-��- -t.l� ,�.�-�.,1-1 P�,�;:-:.�.t-_.-;�:-:�.�lf-_.� t-� H-r..r(). nr '�i'.fJ.~�), .�;)�'-?'(~.J .q._,c:J: v1:� 1(.) r�":�h_0:..:..:... ..-). f�--'..::... !;,_H...'.�.:�ul l:~:.. t.J-. 3.!h��i r._;,'I �::.,2 qo, qo9_go p -~ � 7t:;4,2 -~. 6. 7) b.) 19a9 Certific:3.te of Credit:3.1)1e Inco1ne Ta.x V1i'ithlwld At Source (:Ei iR Form No. 17 4 _~;. 1) [Exll . F] evidence pre::ented by petitioner. thi::: Court believes the merit of rr--�'t�:�:�' r t �.._1. ---11-�7- 1- �-::-.- t--�-.-�:-l.:-::--1--7- . .�l '�� 1_.1 WHEREFORE.- Uw rr�)etit.ion f(:>r reviev~r i:; herebv' GRANTED. 1~\'.-~ -"�-:-�-rr-��,"�-"�)l--1 \-_-l;.:_:..1�-lt..� 1��.:_.� }-1-t~:-' > 1-....:..:t:.,.-hTT (._�.,r��~�-l;:._:.:.t� t�:-:�' (._1 t_..�\_�., r�u't7.fJ_J_!"1("_1 \�_��.,1- tC:f�1�.�~_1.!"1tJ> �c:A.t. t-~~~~ _.~_ _.~,.).. (__!"P__..(_ li"t 1�.1-~1 D Pr- r tt -- 1�.�=-����1��(.-1-r- (_--;r- 1r.�-'1�7�t..1.t_1.�t-_.-or�L�.':-:�.r�, H-t -�1 t;c~;.r'=..~'�.=--�t.�l� !-1 (_)_f:i' ,,_<:�{ r,l7--,-:.;-.�l-_-J-r�t.-�-:-� - "r 1_l 1.1. v d lt_--.-1-1_, _. Hi' 01- ;~1!�1-l () lJ!"!t. rr ; .-_~:.._,7rc_l..�::�:~;._� ~} .�_;.;;f�. - 7' c_.,. _. !"�P.rD!- ~-O:-;-P.1�-1t-.1�l�-10C:0� (-)�\7P-.1"1r:-o�.;J~�.1.(-1 1�!-1(_:(.:>!"I"lP-. t_;-_-t ~>-�~ !"!)-f -� - -� - - t l-lP. -� .� �)T ;�:-:�.L�:�:..r� (l 1 (��J1c,_.,1 �� . I�'.4T,.--~-, r-.�� t�c-.��t�l..._-.��-J�lt-1l�.-.--t:-:-' r�r�l�t�:-'r-It_. -,~_�.,..:-". t.l��.., c..-\�.�.v.- ��;:-:-' � SO ORDERED_ ..._' P~Jnr / RAMON o_ DE VEYR~ I WE COPCUR: ~. 1;z- lQ- ~ ./ ERNESTO D. ACOSTA

DECISION- CTA CASE NO. 4791 - Page 10 ~ CERTIFICATION Thi::; i::; to certifv t11a.t. tlle above decision ~Nas rea.ched aftBr ' ..-111 ttl.::. T�:. "�" f.'f.lF=>'> 1'=� ,.-...-,1�.. t1�... e, ,!� .__ _~-.- ._. ._. l -:-'�J--J-1.&. t_.�.:_1___ ._.,1.1 ��-7�j..�1�.r..�l r._l. !"i!( t.-t1�l..~... !"l".J'1.~.... J�.�.r..�ltt-�..,.~. r��._::� ..._.. ., -..,/' r_�,._'.l]_l_r�t <.._".ll. A ,_.~_..:~ .c-.1 .., __._. f;.l� ...J in accorda.nce ~Nit11 Section 1_3,, iutide VII I of t11e Con~:titution. ~(:a~ ERNESTO D. ACOSTA Presiding,_, Jtv~h�;-�:e Court of T:Jx Appeals b30