CTA Case No. 5334 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY BENGUET MANAGEMENT CORPORATION, Petitionet, vetsus -- C.T.A. CASE NO. 5334 COMMISSIONER OF INTERNAL Ptomulqated: REVENUE, Respondent. Jtvf.JJ - ::: � . APR 1 0 1997 x �- -- - - - - - - - -- - - - - -- _ /.. - DECISION Case at bar refers to a claim for refund in the amount of P20,086,063.00, allegedly representing overpaid expanded withholding taxes for the calendar year 1993. Petitioner is a tegistered domestic corporation engaged i�n business as a specialty conttact 01� particularly in metal casting. During the calendat ye.:w ended Decembet .31, 1'393, it income payments of J�eal and contractor fees, subjected to creditable expanded withholding taxes in the total amount of P24,140,884.00 in compliance with Revenue Hegulations No. 6-85, as amended. Fot the same calendar year, petitioner filed on !3epte mbet 2, l':J94 an amended annual income ta>< declaring therein a net income of P11,585,204.00, a tax

DECISION C.T.A. CASE NO. 5334 -2 - due of P4,054,821.00, a creditable income tax withheld of P24, 140,884.00 and a refundable amount of P20,086,063.00 This refundable amount was not utilized by petitioner as it has no other tax liabilities except its income tax for the calendar year ended December 31, 1'393. Neithet 1-'Jas it used as automatic tax credit pursuant to Section 69 of the Tax Code, as petitioner had no income tax liabilities for the calendar year 1'3'34, it being in a net loss position in that year. Hence, in a letter dated September 29, 1 '39'+' petitionet filed with respondent's office a claim for of the amount of P20,086,063.00 as overpaid at paid cteditable expanded withholding taxes for the year 1'3'33. The claim remained unacted upon and so, to toll the running of the two-year prescriptive period, 1996 petitioner filed with this Court the instant petition. On l�latch .-.c: 19'36, summons was on the .:.:, J�e spondent. Despite such service, respondent failed to file her answer or even a motion for extension of time to file the t;ame. Consequent 1 y, upon motion filed by petitionet on June 14, 1'395, this Court in a tesolution ' ptomulgated on June 24, 1'3'36 (p. 16, CTA tec. ) declared respondent in

DECISION C.T.A. CASE NO. 5334 -3- default and allowed petitioner to present its evidlnce After a careful perusal of all the documentary evidence presented ex-parte including the testimony of petitioner's lone witness, Lina Fernandez, this Court is convinced to grant the refund sought by petitioner but only in the partial amount of P19,854,225.09, computed as follows: Gross incoll!: p 89,709,791.00 Sal of goods ISchdul 1) 2,497,935.00 Sale of services !Schedule 2) 694,909.00 Rentals (Schedule 4) Interest, royalties, dividends not subject 902,212.00 to final withholding tax !Schedule 5) Sale of property other than capital 145,432,783.00 assets (Schedule 7> P23912371630.00 Total 227,652,426.00 Less deductions !Section El p 11,585,204.00 Net incoll! p 4,054,821.40 Tax Due IP1115851204.00 x 35) Less allowable creditable tax withheld 23,909,046.49 p 19,854,225.09 per Schedule "A" TOTAL AMOUNT REFUNDABLE �I CREDITABLE WITHHOLDING TAX AT SOURCE: !Schedule "A") A. Fro� Sale Of Real Properties: Withholding Agent Exh. Aaount of Aaount of Benguet Manageaent Corporation D, D-1 IncoII! Paaent Tax Withheld Enginering Equipaent, Inc. E P233,800,000.00 P11,690,000.00 Benguet Manageaent Corporation F, F-1 Benguet lanageaent Corporation 84,323,200.00 4,216,160.00 Placido 0. Urbanes G, G-1 105,000,000.00 5,250,000.00 Raton M. Cordova I, I-1 1,515,593.00 Rouel U. Tinio J, J-1 30,311,850.00 RZS Resources, Inc. 434,383.60 10,859.59 Mr. & Mrs. Val Santos K, K-1 462,266.04 11,556.65 Sub Total L-12 90,000.00 M, M-1 1,800,000.00 41,361.06 1,654,442.40 541000.00 211601000.00 P2218791530.30 P45919461142.04

DECISION C.T.A. CASE NO. 5334 -4 - B. Fro� Rentals: A1ount of A1ount of Withholding Agent Ex h. Inco1e Pay1ent Tax Withheld Consolidated Ind. Gases, Inc. N, N-1 Engineering Equip1ent, Inc. o, 0-1 p 1271641.60 p 6, 382.08 Engineering Equip1ent, Inc. P, P-1 Sub Total 250, 000.00 12, 500.00 250,000.00 12,500.00 p 627,641.60 p 31,382.08 C. Fro� Fees As Contractor A1ount of A1ount of Inco1e Pay�ent Withholding Agent Exh. P 1, 652, 55g.oo Tax Withheld Bacnotan Ce1ent Corp. G, G-1 Central Azucarera Don Pedro R, R-1 400, 000.00 p 16, 525.59 Central Ce1ent Corp. S, S-1 3, 420, 061.00 Concrete Aggregates Corp. T, T-1 4, 000.00 Hi Ce1ent Corporation u, u-1 154, 286.00 Iligan Ce1ent Corporation V, V-1 1, 427, 635.00 34, 200.61 Kawasaki Steel Corporation W, W-1 Marcopper Mining Corporation X, X-1 75, 040.90 1, 542.86 Philex Mining Corporation Y, Y-1 537, 570.00 Phil. Rock Products, Inc. Z, Z-1 3, 245, 565.00 14, 276.35 Republic Ce1ent Corporation AA, AA-1 80, 5'30, 370.00 Rizal Ce1ent Co., Inc. BB, BB-1 111, g15.00 750.41 Solid Ce1ent Corporation CC, CC-1 1, 123, 534.66 Sub Total 5, 915, 948.00 5, 375.70 T0TAL 1,158,927.00 p 99,813,411.56 32, 455.65 805, 903.70 1, 119.15 11, 235.34 59, 159.48 11,589.27 p 998,134.11 P23,909,04G.49 this Cotnt likewise to petitioner the above-stated partial refund considering its compliance with the three (3) basic tequ:i.tements in claiming for the refund of excess expanded withholding tax which are as follows: 1. That it filed a claim fat tefund within the two (2) yeat petiod ftom date of payment of the ta>< as presctibed undet Section 2'3'3 <now -30) of the National Internal Revenue Code, as amended; 2. That the income upon which the taxes were withheld at source under Section 53 were included as patt of the income declared in the income tax return of the recipient; and

DECISION C.T.A. CASE NO. 5334 -5 - 3. The fact of withholding is established by a copy of statement CBIR Form 17'+3.1) duly issued by the payot <withholding agent) to the payee, showing the amount paid and the amount of tax withheld therefrom. [Sec. 10, Rev. Regs. 6-85; see Ci tytrust Finance Corporation vs. The Commissioner of Internal Revenue, CTA Case No. 4134, Nove�ber 11, 1991; affirmed by the Court of Appeals in Citytrust Finance Corporation vs. Court of Tax Appeals and the Com�issioner of Internal Revenue, CA-G.R. SP No. 28239, March 14, 1994; and Citytrust Finance Corporation <Formerly Investor's Finance Corporation/FNCB Finance) vs. Com�issioner of Internal Revenue, CTA Case No. 4046, February 24, 1993; affirmed by the Court of Appeals in Commissioner of Internal Revenue vs. Citytrust Finance Corporation <Formerly Investors Finance Corporation/FNCB Finance) and the Court of Tax Appeals, CA-G.R. SP No. 31104, April 18, 19941. Exhibits "H" to "H-3" inclusive <Monthly Remittance of Income Taxes 1.-Jithheld, PP� 52-53, CTA rec. ) were excluded in the Court's computation as they pertain to thf payment of withholing tax for 1994. F�Jtther, petitionet failed to submit evidence relative to the payment of li'lithholding tax and income as a WHEREFORE, finding instant petition the only the amount of P19,854,225.09 and hereby ORDERS respondent to REFUND such amount in favot of petitionet as unutilized at overpaid creditable expanded withholding tax fat the yeat 19'33. ')Q['

DECISION C.T.A. CASE NO. 5334 -6- SO ORDERED. Q. ERNESTO D. ACOSTA Presiding Judge I CONCUR ' ' , oi: --:tIQ)'N 0. DEI A Associate J Clge CERTIFICATION hereby certify that this decision was reached after due consultation with the member of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution. Q Q ... ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals 1I .iR7