CTA Case No. 5022 (Decision)

REPUBLIC OF THE PHILIPPINES COURT Of TAX APPEALS OlJEZON CITY ARMANDO 1 . HOMUAtUEl, Petitioner , GOMMISSIONEH OF INTFRNAt C. r.A. CASE NO. 5022 BEVENUE, Responclen t. _t!!LL1!07 P r oHill I ga t od 1 X- ---- .. �- - .. - )(. 0 1.:: C I ::> a 0 1'-.J Before us 'f"or nonsidarc:l"t i1H1 Is a pflllt ion to r�evlew the assessments I ssuecJ by r-espondent agal nst p1:1l: it I one� on a I I eged lnoome tax deflotenoy i n t IH3 t 0 t a I amount of P 2 I , 5 9 (J , 9 :2. 5 . I 9 �f o r t h e y fiHU' s I 9 f! u , I 0 B I , I 9 B : I 1 9 8 4 and II I I 19Bh, i I l Petitioner� It or ltgal Etge, matnr�led, F i lipino and 1 reside n t o�t' no. 4 , Y a h �111 S t . , l. i: V i s t u S ui.HI 1 v 1 s 1 CHI , Q u e z on C I t:y. As pet' reont'c.IS of' r�ee;pondnt' s BUI'tHHI, petitIoner I a a brother of format� FtrYt Lady I m e I d a thllt1 ttrl I d e z �� f.t1 a r o o s a n d t 11 a t d 11 r i ng t IH: I 110 U Iii be 11 G y or her husband, the I ate Ferdinand E:. Mar C(.i8, pett�tioner was aotively in various business concerns dnd owned stocks In numer�ous oorporaltons either In his nam nr In the name of relatives and olnse associates <Exhibit "1" , folder� 1, p. 43). The antecedent facts are as hdreundr stated.

DECISION - C.T.A. CASE NO. 502 - ;,2 - On June ;..>3, I 9:.:, pet 1 t I 011o:H reoe 1 ved a Jetter of asse sment dated June u i 11 ) 1 11 ; l r a of several assessment notices I { E X h i b 1 t s '' A " , "li" to "h�-4" , tolder� of petltioner 'E> exhibits}, nam;ly; li a 1 I S S IH.I d AIIIO ll n t .... ---� ���--��-� - �� .... _ ... 1-' h,78,62U.90 AC-1 -80-9-002781 1;��2d-H1 4 1 b 1 :: ;3 9 � 00 fA C.-� 1- B 1�� 92.- uo:no: 1:2.-;1�� !:11 �1 Cl4, 028. 4 4 FAC-1-83-8-002703 12-:23-UI AC-1-84-92-002779 b , I 6 :t , 8 ;) ld . � FAC-1-85-92-002780 I:.!. .. 2:5-9 I 1 2 - .:! ;3 ��9 I .!.0. l ... 1-J_.\.o 9J!..:_�.!.. .. As correotecl On ,Junl':' :!.9, I 992, pt:tllil'JI1"'1' ftltd v.1ill1 rcsrlnn(Jt:nt a p r� o t e s t t tH� o ll g II a r e q u e s t t () r� 1 � f: u o n ;; i d e r a t I n n n t t tl e a b o v e ass;:ssments. W i thout d0tinu on the rotest, huwever�, r e s p u n cJ e 11 �t ' & He a <1 H e v (H\ u e E x e (J u t I v e A s s 1 s t a n t I n-Char�ge or Co I I eat I 0 1 1, II ( nn I 11 I a IJ . llf.1 Guzman, issued a Wa r�r ant of Dlstratnt and L 'VY ctesiQiiFAte(l as N.A.-1002-93 upon petIt I Ollel tor his , e f us a 1 t� n ray the a f n r enHHI t 1 on ed as s e s s IJI en t s rl o s p I t e de m a n L1 5 ( 1:: ;d't 1 b 1 t .. (; �� ) . On ,J u I y 2'1, I 89::1, I Hn I l. I o 11 e r 1 1 n o p p n s I n u t IIi:: w� a l' ,.. a n t , a I I eged I y or'a I I y i nfol"liiE:HJ Herm i 1 11 a De Guzman ot the pencienoy of both the letter of protest dated June 29, 19Y2 and nt the letter of ex p I an at I on 1 r t': p I y date cl ,June to,�t92 willotl he filed with reJpondt:tnt's Bureau . A I leged I y 1'{H' I ilDI\ k n o VJ I e <1 g e t IH-s r e of a n d u p o n IH'lt' adv I oa, pet 1 t. t otHH� t ur�n 1 slhHJ her' e;oples :::t'f said doournents on the same date. IIH.t

� OE: , IS I ON - NO. 5022 C.T.A. CASE .. ,) - f o 1 1 ow 1 n g day , p t3 t I t 1 one r� wr nt e r� e s pond e n t I n for Ill I no her thai all nr tlls pr�opet-tl"-s ate being t.eld In ousto,Jia legis by the Sandiuat\bayan under Clvi I Case Nn. 0019. It is wor�t hvvh I I e to n �) t e t h a 1: the basis �ror� the assessments Issued by the resr>onctent was liltuost enttrly t a I� e 11 r r� om l h a 1 I a t of r� A a n d p e r� s o n a I JH' or. � e r t 1 c-3 !ii g a t h e r� e d and deemed as I I 1-gotten waaltlt by the Phi I ipplne Commission on G.c1od Gover nuten t (PCGG), the ownership of which are a 1 1 e o e cl I y I 111 1 � u t a t> I a t o t h e p e i i t I o n e r ( E .x 1�1 1 t�, 1 t " 1 " , p . 2 , > � Proceeding from the PCGG data a n d o t her� " p a I t r- y n u 111 be r o �r d o o u m r. n t s " , t11 e IIi b E r s o �r r e 8 p o n rl e td � s S p e o I a I T a x A11d1t Team <STAr> tasl,e<.1 to concluol 1nvest1aat1nn on the petitioner oon � 1 d t.H�fHI It tl) IISf.l the Nat Worth Method of osStHslnent, us sanot Inned undtjr Seotlon at of the ft1X Code, as r.111wnded. n t: t w c. t' t h h a s tncr�easecl In an .amottnt� not r: n Ill Ill E n s 1.1 r� .Ql t tt w 1 t h t�11s r�aport:ed lnoomt:t (Ibid}. Un "111 I y 1 99:'1' H e l"lll I II I d De Guzman endor�sed p r::titlonEJI"' S paprs tl) lht:l Assistant. Cl,lltiil'llobloner� rot� l.agal StHVIoe 'f'or appi'OPI'tate a ;tion. llp to the t� 1111e ot' f lltng o�r tlete 1 n t.Jet It: I on, ltuwevt:H� n o a �) t I �H� h a s I Hi! o 11 tA I t a o e d 1 y t a II' en I.Jy the res!Jonclcnt. He In) e , t I"� I , H p p a I . PetIt I OIHH' s u l:nn I t s , I n t e r a I I a , t It r.t t- t h e W a 1 r� a n I. of Distraint anl'l/or Levy on Ills pr(lpertles Is not lefJ<ll beoause

DECISION �� C.T.A. CASE NO. 5022 "" 4 - they ar� 1 r. Cii:J t (HJ i i;l 1 eg 1 8 li tHi t 11 era IS & pt:uding and unrcS(> I vsd pr�otest 011 t.ltt:l t1 sse s 111 en t :::1 ; t. h a t l he a s s e s � 111 en t s total! ina P2l,tiO,l:1!.H.1U ar-e err�oneous btHlUliSii:! t(>f lhe yeat� 1980 �t'or lttElanoe, he I' i I EHJ tit lax a mn e s t: y r� l.i t lll � n under Presidential Deot ae N o . 1 t3 �IU , lho vor iou::. a;,;satl:l t 111 p u t e t.1 t (� II i m , 111 o tl t o t i h e 111 d 1 e 1 t h e I' owned or registered in t lie ''a me or or OOI'pui'GI t I OIHl or s i mply exagget ated i II IHitil bl:ltl ' , t II cl t the aSSciiSSIItE:ntS are based on hlilcHsay a 11 d li o �t 011 autua I �r aot beoa11se the I I st of p r ope,. t i e s o on l: ci I ned i n l tl e S p e:; c i a I r ax Audit 1 t;; a nt < s r A �l ) f!pOIT, dated 19H, the a s s e s s 111 u 11 t :. W It j U It p I' 0 p t; I t� I t:l i;; ""' u lliOU t. I y f I'Ortl the 11st made H ii d S li bllt I I l t d w i t h t he hy the Hepub I I c d Utd !��It 1 1 1 pp 111es tr.asnHtr;;h a& the cuse w i l h t lle Sand 1 (Jillli..Hiyalt llas 1�eaohed the H�e�-t 1 i a I stage, llenoe, 110 ta;ts uan be used- to ju::>tl-ty the a s s e s t.HIUHt t s ; t IHI t r e s p o n d tHt t ' s '� i g It l t n a s s e s :;; p e I i t i o n l ,, o n thal lhe petitioner has l_,.ft "l'or ltle United Slot.ts and haf'J no income tor� thH y .ars 19!36 to 1\JVLJ. Hespondent, 0 1 1 the other hand, contends In her� Answer the tollowano pet'tlne n t special and a-r�tinnativa cJ�renE1S, to XXX XXX XXX

DECISION - C.T.A. CASE NO. 5022 -5- 6. On the bases of the records of the case, p e t I t l CJ tHH' 1 s t It e r� e o I s t ti: r <H1 u w n e r o f' s e v e , a I parcels of land l o()ated at Mambur�ao, Oooldental t.lln:lorni Cattle I'.H C IChes at Alegr. lc. bela, naegon 1 s 1 a tHJ , 1\.1 as bate , Pam p I (ill a , Camat' 1 ne s sur� and I n hilasbate; beach t�esorts/ulttiJ at: TumallJilli. lsabelu; seven < 7 ) a I r or� a �ft a ; oat t I e ( :2 0 0 IHHIH l 1 n Brgy . Alegle, Sta . Macia, lsabela, (300) heads in tgy. Tulllaiulllt, lsat;ela; a IHH�se <House "Sammy") at F CH' tH � P a r I� , t.hlluit I tHl 1� to Ill e 11 'I' I o n v a r I o u s equtpmenU:/ta(;i lit ies and IJth r� prc'lt.Hn�t le::> lill::wise belonglno to petltlonut�, Petit:ion::r I s also the owner� an d/or majortty stonklloldttt6 in t we I v 13 ( I 2 > corp or� at I on '-' n a hw I y , a. lHo lslafld Hesort l11o. b. Humson Healty lno . o. Nw Majestic Exohange tr 8dtng 8 De v e I o pIll e n t C o I' p o r d t i o n d. Aooi\Shleld Trading Co . , Inc . e. Chrysanthemum Hedlly & Development C t'l I jl 01' a t� i L) t1 f� llcHJHH' t s �1 1 ad i 11 o d n d He a I tv I IH. 0. r 1 cl e I i t y M ct n a g t:HII \Hil I 11 c . I. baaolod Heal stat and Development Cor�por"at ion J. C o 111m e r� o 1 d I H e s t a t 1 r� a n t I H ., s nr � t 1, . I'!Hll tr�y HorJse I. f-l()lliUS HtiJa I ty; and, m. li I g h w By B 14 I I d I:H' s I n c. )( )(X )( )( )( XXX 8. Petttioner havrng consistently underdeclared hrs Income l'or the pet' i od under review makes him llaiJie for t'raud pursuant to Seotlon 51 (b) ot' tlte lax Code, as amended.

DECitION - C.T.A. CASE NO. 5022 �- 6 - Hence, the Imposition of 50% tr-a11rJ penalty Is proper� and I ega I XXX I'.:> tlterE.t 1::; yet no f' Ina I dec 1 s 1 on re111lel'ad I.J y I' o s pond en t on - p e l I l I one I' s � a I I e g e d p ,. J t a s t on I' 1 s ci e f I n I e n '"' y I n o o 111 e r a x a s s e s s 111 en t s lj p pea I a b I e to this Honol'i:ible Court. lienee, lttls HonCH'able Court hae no jUI"isdlotlon t<) take ootnlzanoe ot t:hif> nase; 13. As s t a t Hi e a ,. I 1 " r , b a . e l'l on t he I n v as t I g a t 1 o 11 o o n d 11 o t e d , t t w a s a f; c; e r t a I tHi d h a t petitioner has cunslstenttv �tndardectared his t.axablt ineome for the year-s HHHl tu HHJO tlt;;reby r i l e d therefore r a I a e and r' e IH.1 <11' I no h I s r e t til' n s t r� a 11 (J 11 I 1:.1 n t , p u r� s 11 c1 n t t o S e o t I o n t1lH l>l u f �t h e �t 9 7 7 T a x Code , a a 111 e 11 d o d . l h u s , r e s p o nde n t h a s w I t h I n ten ( 10) year�s �rt'om t h e datu of tit& dtl:>oov:H�y of the l'ruud a1HJ/1r� petltlnner '�; undi:H�deotnrallol o�r I\ i s t a x a b I ti! I ' ' o om e w I t h I n w h i n 11 t o a sse s s t he ootr�aspondiHlJ dei'loienoy innome taxes, Stnne, the disoovtt�y t the 'fraud oomm1t'led hy her�e111 pei:itiOiitH' Wii:'iti only lrl 1991, lhe issuance wr pet 1 t i one r � s cJ .- f I C.l I en o y I no om e t a x �to I' 'l h y tt a r 19f:.IO to HHO on [Jecemb;H :Lb, 1891 was wull-wi lid II t he p r� e s e r I p t I v per I o rJ a s p r o v id e d �f o r� u n de r- "eotion 2:::1 (thtHI 31Bl or the lax CocitJ , as amenrled; X X)( XXX X X J( Hi. P r ope ,, t y I i e s under oustc�diu laylt> oan now be attaonerl purltldllt to Sootion ( , Htllej til ut' the Rules of lmper�lal, G.R. Colll"t ( Pedr�o liegonan t1t aI vs. No. I -!4<1.34, .Januar� y t 1. t 968, :::: 2 SCHA UOJ; XXX )( )( )( XX 1f. Lll\ewist. mer--e alleoation that petitioner has availed of the rax 1\mnast:y undet' �residential Decr'ee No. �t8t10 Is not stl'fflolent. To be entitled to the p r l v l lege granted under suoh [)e(H'ee, petitioner must prova that he oomplied with the requlreml1nts set forth under- P.O. 1040 anti that said avallment was wltt1ln the oovt>:ra.ge o-r the aforesaid deoree1

DECISION - C.T.A. CASE NO. 5022 -7- Records show that the Issue on the legality or appr�opr�iateness or the lssuanoe ol' Uw Wafr'C.HII: of Disl.1'� int and Levy against petitioner i n t'elation with his JH�opertleti held In custodia legis was resolved by I. II I s (; fj u I' t lit lit> Resolution, dated February 4, �t U84, ( pp. 442 to 44fl, CTA recorc1t1). Sa i d reso I u t f on : n J o i n e d l 11 e r� e s p o n L1 e n !. r r�,.im oollectlng the tax IHH'ein I n V o I V e d s i.l bj e n t t o tiH'> f i I I 11 g I:J y petitioner w1th1n fifteen days from reoei1�t or lhe resolution of a surety bond 1n the anHntrtl o-r P21,8\:IU,92b.1H, otharw I se the Cour-t has no allernattve but 1:(, ma I I it a I II �t II e W�il'r'ant over a I I per :tHHH'i I a11d rea I pr�;.Jpt:t ltes to tHttguarct the lntenH; t 0 t� t l'te Gov r nrue 11 t. L 11\tvls&, ill I h..,; tntarttst of just ina and t.o al low ttu; pEi:t I I. i un<:: ,. to I�� Ill' ;::l, l his business and cla i I y rvel I hood, I he WCil'l a 11 t ut g a r� 11 1 c. h HI till l OV!'ilt' hi a ba1tl1 acco11nts wer�e 11 tl.ed �tltOlll th,-1 ta<.:Gt'iti:lt ty ot �riling a t.>{)nr.f. Sandlgant:Jayan of� t h e i ::. s u a 11 (; e u �t t li e W a r� r tt n l ot Distraint and/or� Levy on tht: pr�oprt'tlis (_'JI lH:ring lteld I n o Us i' o d i E1 I et fJ I s by sa I <J o o u r� t. . A <'l dar o It I n 1. '" t t1 e reo (l r ,., s r eva a I t h a t p li! t I t i (I n e r d 1 ttnt ti l!:i "''�V surety hund ptll81tant to the resolution. Dt.tr' I no one o�r t he t I' i a I s r.H . Ht clu o t: tHI o n tlllti C<ttJe, respondent admitted that there was a dn�at ot etil1oner 's pt'otast thi''OUgh the Issuance uf wall'dttl uf� dtstli.:linl and/OI'

DECISION - C.T.A. CASE NO. 5022 - 6 -� levy, whloh In efteot, oon stltutd the final decision of the respondent on the protest. ThUS! 0 .. What was the result of Exhibit ",!" (.fated ,June 10,1992, t'he explanation ot' the p e t I t i o n e r (' n t he a s s <n3 s 111 n t '.( A� rhe pro tes t d n d r� e q u e s t I' \l r I' eo o n s I d t:: r' t i o n was deniAd and tller�t: v<as fi subs;qtH'IIIt Issuance of warrant of lbtraint and/or levy. .1. Oo you hcve a denl IJV tho 1 eipnnd'nl' on the e x p I a n a t 1 o 11 and protest lltl.lde by the petit 1 oner �l A. We did not Issue a lttltr or denial but wa issued il VHH fa Ill )f cl I S tJ tl i II t and/or lavv. u. And YL)tt eonsidei'Od that a dlreddV a denial r.l'f the . . . A. Yes, tlldt Is quite a de.11lal. ( P ll n Z a I a n , T S N , p p . 2 I �- ; ' , cl a t e d A 11 !J u s i. I 5 , 1 9 9 6 ) Wlt�h the above dmissloll IJy lllu t'B::iiJ, ndt;:}f�l l.llrt t.het�e was a denial on p E: t i 1 I o n e r� ' ::> p r (l t c=: s l , the Issue on the jurisdiction of t h i :; C n ur� 1: Is alt�eady :.Ltled dncJ vveli estab I I shad. l h l'i:! I S S 1.1 e S G 0 11 �[' I' 0 II I I 1'1 0 l I S Ci I ' d t h U 3 I I 111 I I e d l u : 1. WhE:ther� or noi petitioner Cflillhlilti:ld 'ttclllll I II �t tHi tl I lng of his individual tax returtu> lur� til Yt:Jdl::J tnvutved; and If 1n the negatlvt'J, 2. W h e t IHH' fH' n n t t he p ' vJ e r o !' I It n e; pond e n t to I s sue t he s u t) J e c t ass e s s 111 n t l:> 1'1 a s p r� e so r i he <.1 pur sua n t 1o Section 203 of the Tax Cncle . 3, Whet her or no t t he t 1 e l w l'J r� t It m t l: lH:oj o 1� A cHht s s nHHI t us 6 d by t h 6 rasp on dent I s w a r- r a r. t li1 d a n d {;or r eo t .

DECISION �- C.T.A. CASE NO. 5022 -9- After a oareful study of the attending olroumstanoes, the provisions of law and reuu1atl0ns in point and the appllnable jUt' lspr udenG, We r� u I t:1 iII of th.;, petitioner . Anent the tii'St I�35UO, 1 l uruelal d lllJ PI' illtOf'd I a I to taol1 I e ttl; fH' Jltment ot r e s p o n d (il n t t. 11 a I t� h r o was fraud oomrnittej by lito petit I ont':r' 1 11 t. IHl til1nu ot hi" I noo1ne tax return:'! tnr t h :: y e a r s 1 n �J r, 1 v � ' i I II Vi t:W ut It:;,. lmpot�tanoe tn d1:1 termlntii!J, j II It (I t� r aud, whether� the assessments s tal ut o ,, y pre soc i pt i ve per� tod d l' t' I Vo 01� pfoVIdc;d In the Ta.x Code. I lie pI" e;:; .J r I j.d I V 'd p 1:: I I 0 d I ti five ycdi'S 1�r 11. Is on lllld dS llll.l'lHJiiOt'HI Pambansa l:ilg. 700, tiHt'H'l (J) y<Hli'S t r u m 1 IJ t:l Ll o n v a t' c1 s _ l'r a�fter the diSOOVtti'Y tltl H Of "' lux lOdt:J , 1i S amended). In tl e r� supra, lhdt pot it I oner ' s oons i stent IHHitH'dt:n I ctr�at ion o'l' 11 is 1 noome tnal<es h lm I I able i'tH' fr�aud. Ill submlited in videnue the citi<JVe::.>lattHI assHssments, SfAI Uo1no Report, dated December 2. thtH'OOf (f:.X IIIbits "1" to "/" 1noluslve o 1�' s u 1.1111 u 1 � k 1 n !] s , l:i I H records, i'oldtH' I; lSN, 2.U I I U\:ilb I pp. 8 �-I We oonalcJer at suoh ev 1 detn.:e 1 nsuf I' 1 o 1 eJnt Io err1ve '

DECISION - C.T.A. CASE NO. 5022 - 10 - conclusion of fraud as having been committed by petitioner . What is "consistent unrJer�deolat�ation" as constituting "fraud tHiS not been fully fXplained to the Scltisfa(;tton of this Court during dny or the lie� t'lngs held CH' in any pladlng s u tlln I t t e d I n t h I s c a s e . is a question o"f tact a n d t 11 e r; I ,. c u 111 s t a n o e s constituting fraud muet he ul Jeged ana provea I II t liB OOllr' t (Commlsstoner of In tenttsl nevt:lnue V<.'. . Ayala Securities Cor�por� at I on, 10 SCBA 2.0H, ;H; I p II a & I b 1:ii ll p p I i e d } . llspondent h a s Ill I I e g e t1 r r a u d bu t t o u 1 1 1� ntl nd s h r:: 11 e: v t:H� p I' o v e rJ h e r G a s e . It must bi'J notd tha nntierdenlarat!Oii nt' inoome Is not ny Itself a o I eat� showing ot f I' a lH1 � r h e sup r e 111 e co u r� t 11 d s e n u n c i a t e d t Ia e r u I e t 11 a t f t' a 1 H'l tmputerJ and thtJ cou��ts never sustain flnclirtJS ot ft�uud uHHt oti'Otllnstanoes wh i oh, at most, create only suspicion under�statcmerrt of a tax is not 1 tset r �ou'f <:1t fralld fol the purpose of tax evasion (Commissioner of ln1ernal Revenue v. .Jav i er�, JJ'. , 1ij9 SCHA 831; etltplla:si::J supplli::d). In tile ase at fr�auc:J by not having reptH�ted his tt� 1e I tH)ume 1'or tlh3 veat'a oonoerned just b;;:;ause her� tindlrtgti Sill)W hlgiHH tl- ltiEl �trl)lll that declared by t11e pet. 1 t 1 oner� . it. i ::>' respondent's findlllg ot nons i at ant IIIHlet dn I <u�at I on 1 r; liHll ' e o �r a sus p I c i on r� at 11 e r� t han o 11 e f o u n dad o 11 h � nt e v 1 de no e . As a matter of tact, responclent neVE:Jt" attompted tn refute

DECISION - C.T.A. CASE NO. 5022 - 1t - petitioner 's evidence that shows oonvinolngly the errors o omm I t ted by It tH' I n I 111 p u l' I n u p r� o p 1� t i e s t h a t a I' e n o t own e d by tte petitioner . I n a IIi e t i cu I o u 111 a nn e r , t he p r� n per� t 1 e s as;;, 1 u tHt<i l o II i 111 1'1 y l IH?.> 1 � tl s. I' n 11 d d n t , a I 1 s t e cl In the An swor , EH'e uot, by h I IU (Pet I t i 011, pp . � 1b; 1:: ;( h i t1 I l s N " " t ,1 " N - 2 I '' , " 0 " t (l 2 " 0 ��� " , " P �- 'I " to "P-6" , "O" to " 0 �� 4 " , " H '' to "n .. :.1" , �� t" to " lJ- i �� 1o U 5 , " "V" �t v v 4 , " " .. W " , " 1' ,.. " , "U" , " J- A" , .. " -- '' J( " t o H X - ::S: u " n V ,.. I ,, l n ' '' L .. A " to L . " " I - 1 '' I (I f " I 2. " I II � ; I ll � j v 6 .. \�. " .. of submark I n us, "1\A" to '"1\A .. ::: " inclu;:-;ive ol bUb1na1 k i 11gs, "BB" to "BB-Ii" 1 n �; I u s 1 � e u t 8rttllllclll,lng:;, "GC'' l u "CC--4" I n o I u ... i v e o 'f s u tHli a r 1 i n !J s , �� U u " , " I H..t - i " , " l: F " lu Z Z '' " , " AAA " to "Lll." tnoluslve dr ;;l; tlJrtHH II 111\JEi , a nil "/A .CIA" tIt "fFFf" inolustve ot 'Ut.Jmarlilng::;). Coup I e d w i t 11 t 11 i s , r e q.l o 11 de 11 r .: d 111 i t. t .:; d I 11 <1 t 1 he �J f.i r� l o us properties that w 1 �..-. i al. c11 I n t 1.1 ch.H; o u 11 l I II IH� I' I V I II g at pet I 1' I o IHH' ' s cl t:J -r i o I en IJ y as i:H-HJ men t , <1 t- the STAT s u p p tJ r �t i 11 Ll <HI n tt x <n-> (l: x h l b 1 �t s 1 " " to " 7" I no Ius I ve of -Hi bmar�l� t no, supl'l.i), cl t 11 n I' r a u 1 f. 'I o r� e d 1 11 t h e name )'f the petit 1 OIHH'. Tit II s ; 0. In y 0 ll I'' tl S S t: S $In 1!:: II I l II 1: X h I iJ I l " :�1 " i ,, w h I o 1.1 . . . , I w i 1 h c! I' a w t he q u H s t i n n . I II l; X II i b I t ,, 2" . . . 11 o , 11 ti v t t..t I r� a f.l v a t; 1, e d Elllbit "2" , w i t 11 ct r a w t 1�, a t �

DECISION - C.T.A. CASE NO. 5022 - 12 �. In all these real properties whloh you oonsldered as undaolared tnoome of petitioner 5w from Exhibits 2� u4" , and "6", In whose names are these propertied reg1steren nr tn shorten It, Is there any property reolsterd In the n a 111 te: o �f' t 1'1 e p e t i t i o n r 't A� I t w a s r !J 1 s t al � e d u n d 1 v a r� i '"' u s n am : s . Ci. Is there any property regi8�terHd In the nfiOlf! ot th petitioner Alllliilido I. Fwmualdl>lZ7 A� T h t:H� a a p p e a I' s t o be 11 u n e � ( P u n z a I a n , l S N , S e p t 13111 be r I 1 , I 9 9 5 , p p . f.i - :> ) I n �t I n e , t h e f.tl' e s u m p t I o n o t c o r 1, t: c t t� e s s e n i o y e d by t h e assessments has been SLICC lltC1 I y � 0 II t� I"' 0 V e f" I d with respondEH�t 's ow11 admt s& t <H� above anfl at t e Ill p t t o dent u I 1 u 11 p e t I t I tHH:ll � ' s 111 � t t:H� 1 a 1 t:: v i den c e � In sunll regard, responcient � "' aiiE!LicH 1011 (l r "iltHtS I ttent u n d <'!I'' de o I a, at I n n " d H a 111 o u n t I 11 1J t u f r au d h a;:; n n I e u t o s t d 1HJ on in the light o1� the taot that It was llifltnlv t>ascl on thfit PCGG ltst of pt�optH't:l.:s t h d t we r .; not� d 11 I y IH' o v <HI b r.: �tor a this Go u r't to be owned h)l tile pe1 t11nt-...n We thus arr�l ve at thu Gonotuslun tll�t� fru11d was not simply establlshiitd ill this particular ui:t:-.le t�y l't:.nH;ult of t�eaponden l 's f d 1 1 u r�e l.n p ove t�t�a u d and at I 11 t: tt::ast d I spi'Ova petIt 1 ontH' . pt�t:H)"f s. On thtt second tsue, tl!e1�ei'<Jt"t:J, t.IH::ro Delno 110 rraud, the ten {10) year 1esor1p1.1ve period for the 1ssuanoe of a sse s s men t I s no t. a p p I 1 o a b 1 tl ;.HId lnstea �l, the rive (b) or� (:".1} year pr�esc:r 1 pt I ve pttr IIJd, supra, appllrs . ., h

DECISION - C.T.A. CASE NO. 5022 -� '13 - respondent only assessed the petitioner on Jttne 8, 1992 <Exhibit "A", petitioner 's foldr of exhibits). Evlclent:ly, the power' ot the r�espondent tn assess has prt1S<'H'I bed, as follOWS; Income Tax Date of Years elapsed Prescriptive Result Return Flied Assessment from fIling O'f Period (ITA) ITFI to Assessment 4/15/80 6/8/92 1 ::?. veal'S 5 years Pr�esct' I bed 4/ '15/81 f)/8/92 Preset' i t1ed 4115/83 6/B/B2 I 1 yean.1 0 year�s Prescw I bed 4/15/84 6/8/92 9 YI'J81'S Prescribed 4/15/85 6/8/92 8 year�s 5 yeat�s Prescribed ., yean; 3 yt:a: rs 3 year's WI tt�r rP.spoot lo th<:: thlld Issue, IJtllloner has also I n v o k e d o ttHH' e r�r� or s, aside l tl o fH 111 e n l i o n e d discussed above, in the lssuan Je of lllt't ass:;s: mHit:s by way of the net wotth method, :Vlrlt:h rt:-e;pontlent again r lied to oontr�overt, namely, that llie assess111ent:; ar�e inadmissible In e v I de: rw e ; t hat t 11 ere w IHJ w , nn 1 v a I tt a t l n n o r t he p ,ope I' t I e s 1 t hat t h e r e Vv a s clo u b I e c o u n t l n g ') f t tl e 1 1 I' o p r t I e s ; t h c.1 t t li e r e was w r on g p e ,, 1 0 d o f a p p I i o d t: 1 o ' ' o 1' pI' ope r t y a s s elH> d � ; a n d lastly, the opening net wol't h �lf �190u and tncreased net worth o�r 1 9 8 0 w 1:1 r e w r� o n oJ t Pet 1 l i r� 11 .:w � t; 111 em o r� a n d llllt , p p . 1 ;3 - 26; pp. 6''b--�64H, (:'lA l't:Joords). Presclndlnoly, however , We opt 11ot to dWt:ll I an VlliO r e Into the merit th abnvt:o propnsltlons due to tho p r e so r I be <1 n a t u r� e o f t h e n uiJ j eo t a s s e s s 111 t: n 1 v .

DECIS ION - C.T.A. CASE NO. 5022 - 14 - WHEREFOftE, In view of the foregoing premises, the Instant Petition for Review is hereby GRANTED. Accordingly, the assessments Involved In the oase at bar are herehy CANCELLEO and SET ASIDE . No Costs. SO OFIOEAEO. lsi ' Q_vvA--. EHNESTO n. ACOS"rA Pn;;s 1 d 1 ng d udge WE AU<ri.). ud:r As soo I ate ,J .Jus:d � Assooiateo. Y G EA--.-- I F I C.:: A r I ( ) N I hereby certify that thts dectslon waH reached after due cons u I t at i on w I t h t IH'l me m f) tH s o �t t he co u r t o t "I a x Appeals in accordance with Section IJ, Art tale VI I I of the Constitution. G .o EHNESl"O 0. ALOSIA PresIdIng Jurtge co lll' t o-r �1 ax A p pea 1 s t�J l'''i 1 1 I I ,; ,