PRHC PROPERTY MANAGERS, INC. v. COMMISSIONER OF INTERNAL REVENUE

Republic of the Philippines COURT OF TAX APPEALS Quezon City SECOND DIVISION PRHC PROPERTY MANAGERS, CTA CASE NO. 8071 INC., For: Refund of unutilized creditable Petitioner, withholding tax -versus- Present: CASTANEDA, JR., Chairperson CASANOVA, and MINDARO-GRULLA, JJ. COMMISSIONER OF INTERNAL REVENUE, Respondent. Promulgated: JAN06 2D12 / x----------------------------------------------------------------------------------------~---------x \ / lb:l( <. ... . DECISION MINDARO-GRULLA, {: This is a Petition for Review filed on April 13, 2010 by PRHC Property Managers, Inc., as petitioner, against the Commissioner of Internal Revenue (CIR) as respondent, for the Court in Division, pursuant to Section 7 (a) (2) of Republic Act (RA) No. 1125, An Act Creating the Court of Tax Appeals, as amended 1, as well as Rule 4, Section 3 (a) (2), in( Sec. 7. Jurisdiction. -The CTA shall exercise: (a) Exclusive appellate jurisdiction to review by appeal , as herein provided : XXX XXX (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue,

PRHC Property Managers, Inc. v. CIR Page2of29 CTA CASE NO. 8071 DECISION relation to Rule 8, Section 4(a), of the Revised Rules of the Court of Tax Appeals (RRCTA)2. It involves a claim for refund of the amount of( where the National Internal Revenue Code provides a specific period for action , in which case the inaction shall be deemed a denial ; XXX XXX Rule 4. Sec. 3. Cases within the jurisdiction ofthe Court in Division. - The Court in Division shall exercise: (a) Exclusive original over or appellate jurisdiction to review by appeal the following : XXX XXX (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code or other applicable law provides a specific period for action : Provided, that in case of disputed assessments, the inaction of the Commissioner of Internal Revenue within the one hundred eighty day-period under Section 228 of the National Internal Revenue Code shall be deemed a denia l for purposes of allowing the taxpayer to appeal his case to the Court and does not necessarily constitute a formal decision of the Commissioner of Internal Revenue on the tax case; Provided, further, that should the taxpayer opt to await the final decision of the Commissioner of Internal Revenue on the disputed assessments beyond the one hundred eighty day-period abovementioned , the taxpayer may appeal such final decision to the Court under Section 3(a) , Rule 8 of these Rules; and Provided, still further, that in the case of cla ims for refund of taxes erroneously or illegally collected, the taxpayer must file a petition for review with the Court prior to the expiration of the two-year period under Section 229 of the National Internal Revenue Code; XXX XXX Rule 8. Sec. 4. Where to appeal,� mode ofappeal. - (a) An Appeal from a decision or ruling or the inaction of the Commissioner of Internal Revenue on disputed assessments or claim for refund of internal revenue taxes erroneously or illegally collected ; the decision or ruling of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade & Industry, the Secretary of Agriculture, and the Regional Trial Court in the exercise of their original jurisdiction, shall be taken to the Court by filing before it a petition for review as provided in Rule 42 of the Rules of Court. The Court in Division shall act on the appea l.

PRHC Property Managers, Inc. v. CIR Page3of29 CTA CASE NO. 8071 DECISION P1 ,928,458.00, representing unutilized creditable withholding tax (CWT) for the taxable year ending December 31, 2007. Petitioner PRHC Property Managers, Inc. is a corporation organized under Philippine laws and is engaged in the business of managing, operating, administering, maintaining, servicing, buying , leasing or selling real and/or personal properties either for itself or for others . Respondent, on the other hand, is the duly appointed Commissioner of the Bureau of Internal Revenue (BIR) , authorized and empowered by the National Internal Revenue Code (NIRC) of 1997 to decide and approve claims for refund of internal revenue taxes. On April 15, 2008, petitioner filed with the Bureau of Internal Revenue its Annual Income Tax Return (ITR) for the taxable year ending December 31, 2007, which showed a taxable income of P1 ,091,805.00 and a corresponding tax due in the amount of P382,132.00.3 In the same Annual ITR, petitioner reported the amount of P1 ,434,076.00 as its creditable taxes withheld for the first three quarters,� 3 Exhibit "E".

PRHC Property Managers, Inc. v. CIR Page4of29 CTA CASE NO. 8071 DECISION as well as the creditable taxes withheld for the fourth quarter in the amount of P494,382.00, or a total of P1 ,928,458.00, to wit: Tax Credits/Payments p 1,434,076.00 Add : Creditable Tax Withheld for the 494,382.00 First Three Quarters Add: Creditable Tax Withheld for the p 1,928,458.00 Fourth Quarter Total Tax Credits/Payments Petitioner likewise indicated its intention not to carry over its excess/unutilized creditable withholding taxes by marking the box "To be refunded" in Line 31 of said ITR. On November 4, 2008, petitioner filed a letter with BIR Revenue District Office (ROO) No. 43 requesting the refund of its unutilized creditable taxes withheld at source for taxable year 2007 in the amount of P1 ,928,458.00.4 However, to date, respondent has neither denied nor approved petitioner's administrative claim for refund. Hence, petitioner filed the instant Petition for Review on April 13, 2010 . On June 8, 2010, respondent filed her Answer5 raising the following Special and Affirmative Defenses: "4. Claims for refund are strictly construed against the taxpayer as the same partakes the nature of tax exemption; ' 4 Exhibits "B" and "C". s Docket, pp. 73-75.

PRHC Property Managers, Inc. v. CIR Page5of29 CTA CASE NO. 8071 DECISION 5. The taxpayer has the burden to show that the taxes were erroneously or illegally paid. Failure on the part of the Petitioner to prove the same is fatal to its cause of action; 6. Petitioner failed to substantiate by documentary evidence its claim for refund ; 7. The Petitioner must prove that the amount of creditable withholding VAT being claimed as refund was not utilized; 8. The Petitioner should prove its legal basis for claiming the amount being refunded." Upon approval by the Court of the "Joint Stipulation of Facts" filed by both parties, pre-trial was deemed terminated. Trial ensued during which petitioner presented its only witness, Ma. Theresa L. Kampitan. On December 8, 2010, petitioner filed its Formal Offer of Evidence without respondent's comment. This Court in its Resolution dated February 2, 2011 admitted Exhibits "A" to "J-1 ", "L" to "Z-1 ", "AA" to "ZZ-1 ", "AAA" to "ZZZ-1", "AAAA" to "XXXX-1", "ZZZZ", "ZZZZ-1", "GGGGG", "GGGGG-1", "GGGGG-4", "HHHHH", "HHHHH-1", "IIIII", "11111-1", "JJJJJ", "JJJJJ-1", "KKKKK", "KKKKK-1", "LLLLL" and "LLLLL-1", inclusive of sub- markings, and thereafter, petitioner was deemed to have formally rested its case. The documentary evidence formally offered and admitted are as follows :(

PRHC Property Managers, Inc. v. CIR Page 6 of29 CTA CASE NO 8071 DECISION Exhibits Description A B Articles of Incorporation of PRHC Property Managers, B- 1 Inc. B-2 C PRHC Property Managers, Inc. letter dated October 23 , 2008 addressed to the Bureau of Internal Revenue C-1 0 Receiving Stamp of BIR ROO No. 43-Pasig City dated E November 4, 2008 E-1 Signature of Miguel R. Ortigas, Jr. E-2 E-3 BIR Form No. 1914 Application for Tax Credits/Refunds E-4 of PRHC Property Managers, Inc. in the amount of E-5 P1 ,928,458.00 E-6 E-7 Signature of Miguel Ortigas, Jr. E-8 E-9 PRHC Property Managers, Inc. Certificate of Registration issued by the Bureau of Internal Revenue F Annual Income Tax Return of PRHC Property Managers, Inc. for the calendar year ended 12/2007 consisting of three (3) pages Receiving Stamp of BIR ROO No. 43 Pasig City dated April 15, 2008 The check mark on the box To be refunded on Line 31 Line 23 on Income Tax in the amount of P382,132 Line 28A on Prior Year's Excess Credit in the amount of P 4 ,843 ,309 Line 28C on Creditable Tax for the First Three Quarters in the amount of P1 ,434,076 Line 280 on Creditable Tax Withheld for the Fourth Quarter in the amount of P494,382 Line 29 on Tax Payment (Overpayment) in the amount of P6 ,389,635.00 Line 121 Signature of Miguel Ortigas, Jr. PRHC Property Managers, Inc. Schedule of Taxes and Licenses for the year ended December 31 , 2007 with the receiving stamp of BIR ROO No. 43 Pasig City dated April 15, 2008 Report of Independent Auditors to Accompany Income Tax Returns with the Audited Financial Statements for ~

PRHC Property Managers, Inc. v. CIR Page7of29 CTA CASE NO 8071 DECISION the year ending December 31 , 2007 consisting of twenty-nine (29) pages F- 1 Receiving Stamp of SIR ROO No. 43 Pasig City dated April 15, 2008 G PRHC Property Managers, Inc. Summary of Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source (SAWT) from 10-01-2007 to 12-31-2007 with receiving stamp of SIR ROO No. 43 Pasig City dated April 15, 2008 H Form 1702Q of PRHC Property Managers, Inc. for the 3rd quarter of taxable year 2007 H-1 Receiving Stamp of SIR ROO No. 43 Pasig City dated November 28, 2007 Form 1702Q of PRHC Property Managers, Inc. for the 2nd quarter of taxable year 2007 1- 1 Receiving Stamp of SIR ROO No. 43 Pasig City dated August 28, 2007 J Form 1702Q of PRHC Property Managers, Inc. for the 1st quarter of taxable year 2007 J-1 Receiving Stamp of SIR ROO No. 43 Pasig City dated May 29, 2007 L Judicial Affidavit executed on August 3, 2010 consisting of five (5) pages L-1 Signature of Tess Kampitan M Certificate of Creditable Tax Withheld at Source by Avalon Condominium Corp. for PRHC Property Managers, Inc. for the period 10-01-2007 to 12-31 -2007 M- 1 The amount of P4,218.75 N Certificate of Creditable Tax Withheld at Source by Banco de Oro-EPCI , Inc. for PRHC Property Managers, Inc. for the period 01 -01 -2007 to 12-31 -2007 N- 1 The amount of P21 ,780.94 0 Certificate of Creditable Tax Withheld at Source by Broadford Property Holdings, Inc. for PRHC Property Managers, Inc. for the period 12-31 -2007 0-1 The amount of P2,363.20 P Certificate of Creditable Tax Withheld at Source by Casa Miguel Condominium Corp. for PRHC Property Managers, Inc. for the period 10-01-2007 to 12-31 -2007{

PRHC Property Managers, Inc. v. CIR Page8of29 C TA CASE NO 8071 DECISION P- 1 The amount of P1 ,993.02 Q Certificate of Creditable Tax Withheld at Source by First Q-1 Balfour, Inc. for PRHC Property Managers, Inc. for the R period 10-01 -2007 to 12-31 -2007 R- 1 T h e a m o u n t o f P 1 5 ,541.24 S Certificate of Creditable Tax Withheld at Source by S-1 Frankfort Property Leasing for PRHC Property T Managers, Inc. for the period 10-01 -2007 to 10-31 -2007 T-1 The amount of P150.00 U Certificate of Creditable Tax Withheld at Source by U-1 Frankfort Property Leasing for PRHC Property V Managers, Inc. for the period 11-01 -2007 to 11 -30-2007 V-1 The amount of P150 .00 W Certificate of Creditable Tax Withheld at Source by W-1 Frankfort Property Leasing for PRHC Property X Managers, Inc. for the period 12-01-2007 to 12-31 -2007 X-1 The amount ofP150.00 Y Certificate of Creditable Tax Withheld at Source by Greenhills Properties, Inc. for PRHC Property Managers, Inc. for the period 10-01 -2007 to 12-31 -2007 The amount of P24,688 .79 Certificate of Creditable Tax Withheld at Source by LTA Condominium Corp. for PRHC Property Managers, Inc. for the period 10-31-2007 to 12-31 -2007 The amount of P24 ,806 .25 Certificate of Creditable Tax Withheld at Source by The Nobel Plaza Condominium Corp. for PRHC Property Managers, Inc. for the period 10-01 -2007 to 12-31 -2007 The amount of P17,668 .26 Certificate of Creditable Tax Withheld at Source by One Wilson Place Condominium Corp. for PRHC Property Managers, Inc. for the period 10-31-2007 to 12-31 -2007 The amount of P736.60 Certificate of Creditable Tax Withheld at Source by Philippine Amusement Enterprises, Inc. for PRHC Property Managers, Inc. for the period 11-22-2007 to 12-31 -2007,

PRHC Property Managers, Inc. v. CIR Page9of29 CTA CASE NO. 8071 DECISION Y-1 The amount of P2,100.00 Z Certificate of Creditable Tax Withheld at Source by Z-1 Philippine Realty and Holdings Corporation for PRHC AA Property Managers, Inc. for the period 10-01 -2007 to 12-31 -2007 AA-1 BB The amount of P9,434.73 BB - 1 Certificate of Creditable Tax Withheld at Source by CC Philippine Stock Exchange Centre Condominium Corp. for PRCH Property Managers, Inc. for the period 10-01 - CC-1 2007 to 10-31-2007 DO The amount of P89,482.50 00-1 EE Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange Centre Condominium Corp. EE-1 for PRHC Property Managers, Inc. for the period 11 -01 - FF 2007 to 11-30-2007 FF - 1 The amount ofP89,107.50 GG Certificate of Creditable Tax Withheld at Source by GG - 1 Philippine Stock Exchange Centre Condominium Corp. for PRHC Property Managers, Inc. for the period 12-01 - 2007 to 12-31-2007 The amount of P89,107.50 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange, Inc. for PRHC Property Managers, Inc. for the period 10-01 -2007 to 10-31 -2007 The amount of PBO 1.43 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange, Inc. for PRHC Property Managers, Inc. for the period 11 -01 -2007 to 11 -30-2007 The amount of P801.43 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange, Inc. for PRHC Property Managers, Inc. for the period 12-01 -2007 to 12-31 -2007 The amount of P801.43 Certificate of Creditable Tax Withheld at Source by Summit Securities, Inc. for PRHC Property Managers, Inc. for the period 12-01-2007 to 12-31 -2007 The amount of P4,368 .004

PRHC Property Managers, Inc. v. CIR Page 10of29 CTA CASE NO 8071 DECISION HH Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium for PRHC Property HH - 1 Managers, Inc. for the period 10-01 -2007 to 10-31-2007 II The amount of P24,404.49 11 - 1 JJ Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium Corp. for PRHC Property JJ - 1 Managers, Inc. for the period 11-01 -2007 to 11 -30-2007 KK The amount of P5,445 .00 KK-1 LL Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium Corp. for PRHC Property LL - 1 Managers, Inc. for the period 11-01 -2007 to 11-30-2007 MM The amount of P18 ,959.49 MM - 1 NN Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium Corp. for PRHC Property NN - 1 Managers, Inc. for the period 12-01 -2007 to 12-31 -2007 00 The amount of P5,445.00 00-1 PP Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium Corp. for PRHC Property PP - 1 Managers, Inc. for the period 12-01 -2007 to 12-31 -2007 The amount ofP18 ,959.49 Certificate of Creditable Tax Withheld at Source by The Pearl Plaza , Inc. for PRHC Property Managers, Inc. for the period 10-01 -2007 to 12-31 -2007 The amount of P7 ,758.58 Certificate of Creditable Tax Withheld at Source by The Pinnacle Condominium Corp . for PRHC Property Managers, Inc. for the period 10-01 -2007 to 12-31 -2007 The amount of P11 ,250.00 Certificate of Creditable Tax Withheld at Source by UDB International Holdings, Inc. for PRHC Property Managers, Inc. for the period 10-01 -2007 to 10-31 -2007 The amount of P1 ,890.00 Certificate of Creditable Tax Withheld at Source by Avalon Condominium Corp . for PRHC Property Managers, Inc. for the period 07-01 -2007 to 09-31 -2007 The amount of P4,084.83(

PRHC Property Managers, Inc. v. CIR Page 11 of29 CTA CASE NO 8071 DECISION QQ Certificate of Creditable Tax Withheld at Source by Casa Miguel Condominium Corp. for PRHC Property QQ-1 Managers, Inc. for the period 07-01 -2007 to 09-30-2007 RR The amount of P4,167.21 RR- 1 Certificate of Creditable Tax Withheld at Source by ss Epsys, Inc. for PRHC Property Managers, Inc. for the period 07-01-2007 to 09-30-2007 SS-1 TT The amount of P11 ,863 .66 TT-1 Certificate of Creditable Tax W ithheld at Source by Frankfort Property Leasing for PRHC Property uu Managers, Inc. for the period 08-01 -2007 to 08-31 -2007 UU - 1 The amount of P150.00 w Certificate of Creditable Tax Withheld at Source by Frankport Property Leasing for PRHC Property W-1 Managers, Inc. for the period 09-01-2007 to 09-30-2007 ww The amount of P150.00 WW-1 Certificate of Creditable Tax Withheld at Source by XX Greenhills Properties, Inc. for PRHC Property Managers, Inc. for the period 07-01 -2007 to 09-30-2007 XX-1 yy The amount of P26,781 .29 YY-1 Certificate of Creditable Tax Withheld at Source by LTA Condominium Corp. for for PRHC Property Managers, Inc. for the period 07-31 -2007 to 09-30-2007 The amount of P24 ,806.25 Certificate of Creditable Tax W ithheld at Source by The Nobel Plaza Condominium Corp. for PRHC Property Managers, Inc. for the period 07-01 -2007 to 09-30-2007 The amount of P17,668 .26 Certificate of Creditable Tax Withheld at Source by One Wilson Place Condominium Corp. for PRHC Property Managers, Inc. for the period 07-01 -2007 to 09-30-2007 The amount of P977.68 Certificate of Creditable Tax Withheld at Source by Philippine Realty Holdings Corporation for PRHC Property Managers, Inc. for the period 07-01 -2007 to 09 - 30 - 2007 The amount of P8 ,779.80�

PRHC Property Managers, Inc. v. CIR Page 12of29 CTA CASE NO 8071 DECISION zz Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange Centre Condominium Corp. ZZ-1 for PRHC Property Managers, Inc. for the period 07-01 - AAA 2007 to 07-31-2007 AAA-1 The amount of P89,482 .50 BBB Certificate of Creditable Tax Withheld at Source by BBB-1 Philippine Stock Exchange Centre Condominium for CCC PRHC Property Managers, Inc. for the period 08-01 - 2007 to 08-31-2007 CCC-1 DOD The amount of P89,482 .50 DDD-1 Certificate of Creditable Tax Withheld at Source by EEE Philippine Stock Exchange Centre Condominium Corp. for PRHC Property Managers, Inc. for the period 09-01 - EEE- 1 2007 to 09-30-2007 FFF The amount of P89,482.50 FFF- 1 GGG Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange, Inc. for PRHC Property GGG-1 Managers, Inc. for the period 09-01 -2007 to 09-30-2007 HHH The amount of P801.43 HHH-1 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange, Inc. for PRHC Property Managers, Inc. for the period 08-01 -2007 to 08-31 -2007 The amount of P801.43 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange, Inc. for PRHC Property Managers, Inc. for the period 07-01 -2007 to 07-31 -2007 The amount of P801.43 Certificate of Creditable Tax Withheld at Source by Secaucus Development Corp. for PRHC Property Managers, Inc. for the period 03-01 -2007 to 03-31 -2007 The amount of P6 ,549.11 Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium Corp. for PRHC Property Managers, Inc. for the period 07-01-2007 to 07-31 -2007 The amount of P24,404.49 Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium Corp. for PRHC Property Managers, Inc. for the period 08-01 -2007 to 08-31-2007 The amount of P24,404.49c

PRHC Property Managers, Inc. v. CIR Page 13of29 CTA CASE NO. 8071 DECISION Ill Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium Corp. for PRHC Property 111 -1 Managers, Inc. for the period 09-01 -2007 to 09-30-2007 JJJ The amount of P24,404.49 JJJ-1 KKK Certificate of Creditable Tax Withheld at Source by The Pearl Plaza , Inc. for PRHC Property Managers, Inc. for KKK- 1 the period 07-01 -2007 to 09-30-2007 LLL The amount of P7 ,778.58 LLL - 1 MMM Certificate of Creditable Tax Withheld at Source by The Pinnacle Condominium Corp. for PRHC Property MMM-1 Managers, Inc. for the period 07-01 -2007 to 09-30-2007 NNN The amount of P11 ,250.00 NNN - 1 000 Certificate of Creditable Tax Withheld at Source by Avalon Condominium Corp. for PRHC Property 000-1 Managers, Inc. for the period 04-01-2007 to 06-30-2007 ppp The amount of P4,017 .87 PPP-1 QQQ Certificate of Creditable Tax Withheld at Source by Campershells, Inc. for PRHC Property Managers, Inc. QQQ-1 for the period 05-01 -2007 to 05-31 -2007 The amount of P18 ,130.58 Certificate of Creditable Tax Withheld at Source by Casa Miguel Condominium Corp. for PRHC Property Managers, Inc. for the period 04-01 -2007 to 06-30-2007 The amount ofP3,019 .72 Certificate of Creditable Tax Withheld at Source by Epsys, Inc. for PRHC Property Managers, Inc. for the period 04-01-2007 to 06-30-2007 The amount of P17,795.40 Certificate of Creditable Tax withheld at Source by Equitable PCI Bank for PRHC Property Managers, Inc. for the period 04-01 -2007 to 06-30-2007 The amount of P4 ,050.00 Certificate of Creditable Tax Withheld at Source by Frankfort Property Leasing for PRHC Property Managers, Inc. for the period 05-01 -2007 to 05-31 -2007 The amount of P750 .00(

PRHC Property Managers, Inc. v. CIR Page 14 of29 CTA CASE NO. 8071 DECISION RRR Certificate of Creditable Tax Withheld at Source by Greenhills Properties, Inc. for PRHC Property RRR- 1 Managers, Inc. for the period 04-01-2007 to 06-30-2007 sss The amount of P24,688 .79 SSS-1 Certificate of Creditable Tax Withheld at Source by LTA TTT Condominium Corp. for PRHC Property Managers, Inc. for the period 04-30-2007 to 06-30-2007 TTT-1 The amount of P24,806.25 uuu Certificate of Creditable Tax Withheld at Source by The UUU-1 Nobel Plaza Condominium Corp . for PRHC Property Managers, Inc. for the period 04-01-2007 to 06-30-2007 vw The amount of P17 ,668.26 VW-1 Certificate of Creditable Tax Withheld at Source by One www Wilson Place Condominium Corp. for PRHC Property Managers, Inc. for the period 04-01-2007 to 06-30-2007 WWW-1 XXX The amount of P803.57 XXX-1 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange Centre Condominium Corp. yyy for PRHC Property Managers, Inc. for the period 04-01 - 2007 to 04-30-2007 YYY-1 The amount of P86,250.00 zzz Certificate of Creditable Tax Withheld at Source by ZZZ-1 Philippine Stock Exchange Centre Condominium Corp. for PRHC Property Managers, Inc. for the period 05-01 - 2007 to 05-31-2007 The amount of P89,482.50 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange Centre Condominium Corp. for PRHC Property Managers, Inc. for the period 06-01 - 2007 to 06-30-2007 The amount of P89,482.50 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange, Inc. for PRHC Property Managers, Inc. for the period 05-01 -2007 to 05-31 -2007 The amount of P3,278.57 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange, Inc. for PRHC Property Managers, Inc. for the period 06-01 -2007 to 06-30-2007 The amount of P801.43t

PRHC Property Managers, Inc. v. CIR Page 15of29 CTA CASE NO. 8071 DECISION AAAA Certificate of Creditable Tax Withheld at Source by Philippine Realty and Holdings Corporation for Property AAAA-1 Managers, Inc. for PRHC Property Managers, Inc. for BBBB the period 04-01-2007 to 06-30-2007 BBBB-1 The amount of P8 ,691 .15 ecce Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium Corp. for PRHC Property CCCC-1 Managers, Inc. for the period 04-01 -2007 to 04-30-2007 DODD The amount of P24,404.49 DDDD-1 EEEE Certificate of Creditable Tax Withheld at Source by The Makati Tuscany Condominium Corporation for PRHC EEEE-1 Property Managers, Inc. for the period 05-01 -2007 to FFFF 05-31-2007 FFFF-1 The amount of P24,404.49 GGGG Certificate of Creditable Tax Withheld at Source by The GGGG-1 Makati Tuscany Condominium Corp. for PRHC Property HHHH Managers, Inc. for the period 06-01 -2007 to 06-30-2007 HHHH-1 The amount of P24,404.49 II II Certificate of Creditable Tax Withheld at Source by The 1111 - 1 Pearl Plaza , Inc. for PRHC Property Managers, Inc. for the period 04-01-2007 to 06-30-2007 The amount of P7,778.58 Certificate of Creditable Tax Withheld at Source by The Pinnacle Condominium Corp. for PRHC Property Managers, Inc. for the period 04-01-2007 to 06-30-2007 The amount of P11 ,250.00 Certificate of Creditable Tax Withheld at Source by Avalon Condominium Corp. for PRHC Property Managers, Inc. for the period 01 -01 -2007 to 03-31-2007 The amount of P4,017.86 Certificate of Creditable Tax Withheld at Source by Casa Miguel Condominium Corp. for PRHC Property Managers, Inc. for the period 01-01 -2007 to 03-31 -2007 The amount of P3,019 .71 Certificate of Creditable Tax Withheld at Source by Epsys, Inc. for PRHC Property Managers, Inc. for the period 01 -01-2007 to 03-31 -2007 The amount of P17 ,795.40(

PRHC Property Managers, Inc. v. CIR Page 16of29 CTA CASE NO. 807 1 DECISION JJJJ Certificate of Creditable Tax Withheld at Source by Equitable PCI Bank for PRHC Property Managers, Inc. JJJJ-1 for the period 01 -01 -2007 to 03-31 -2007 KKKK The amount of P4,050 .00 KKKK-1 LLLL Certificate of Creditable Tax Withheld at Source by Greenhills Properties, Inc. for PRHC Property LLLL- 1 Managers, Inc. for the period 01-01 -2007 to 03-31 -2007 MMMM The amount of P34,655.00 MMMM - 1 NNNN Certificate of Creditable Tax Withheld at Source by LTA Condominium Corp. for PRHC Property Managers, Inc. NNNN - 1 for the period 01 -31 -2007 to 03-31 -2007 0000 The amount of P24,806 .25 0 0 0 0- 1 pppp Certificate of Creditable Tax Withheld at Source by The Nobel Plaza Condominium Corp. for PRHC Property PPPP-1 Managers, Inc. for the period 01-01 -2007 to 03-31 -2007 QQQQ The amount ofP17,107.35 QQQQ-1 RRRR Certificate of Creditable Tax Withheld at Source by One Wilson Place Condominium Corp. for PRHC Property RRRR-1 Managers, Inc. for the period 01-01-2007 to 03-31-2007 The amount of P1 ,785.71 Certificate of Creditable Tax Withheld at Source by PAE Ventures, Inc. for PRHC Property Managers, Inc. for the period 03-28-2007 The amount of P2,100.00 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange Centre Condominium Corp . for PRHC Property Managers, Inc. for the period 01-01 - 2007 to 01-31 -2007 The amount of P89 ,250.00 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange Centre Condominium Corp. for PRHC Property Managers, Inc. for the period 02-01 - 2007 to 02-28-2007 The amount of P89,250.00 Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange Centre Condominium Corp . for PRHC Property Managers, Inc. for the period 03-01 - 2007 to 03-31 -2007 The amount of P89 , 250 . 00 ~

PRHC Property Managers, Inc. v. CIR Page 17of29 CTA CASE NO. 8071 DECISION SSSS Certificate of Creditable Tax Withheld at Source by Philippine Stock Exchange, Inc. for PRHC Property SSSS - 1 Managers, Inc. for the period 01 -01 -2007 to 01 -31 -2007 TTTT The amount of P728.57 TTTT-1 UUUU Certificate of Creditable Tax Withheld at Source by Philippine Realty and Holdings Corporation for PRHC UUUU - 1 Property Managers. Inc. for the period 01 -01 -2007 to WVV 03-31 -2007 WVV-1 The amount of P8,987 .58 WWWW Certificate of Creditable Tax Withheld at Source by The WWWW-1 Makati Tuscany Condominium Corp. for PRHC Property XXXX Managers, Inc. for the period 01 -01 -2007 to 01 -31 -2007 XXXX-1 The amount of P23 ,909.49 ZZZZ Certificate of Creditable Tax Withheld at Source by The ZZZZ-1 Makati Tuscany Condominium Corp. for PRHC Property GGGGG Managers, Inc. for the period 02-01 -2007 to 02-28-2007 GGGGG-1 The amount of P24,899.49 GGGGG-4 HHHHH Certificate of Creditable Tax Withheld at Source by The Pearl Plaza , Inc. for PRHC Property Managers, Inc. for the period 01-31 -2007 to 03-31 -2007 The amount of P7,778 .58 Certificate of Creditable Tax Withheld at Source by The Pinnacle Condominium Corp. for PRHC Property Managers, Inc. for the period 01 -01 -2007 to 03-31-2007 The amount of P11 ,250.00 Annual Income Tax Return of PRHC Property Managers, Inc. for the calendar year ended 12/2008 consisting of three (3) pages Receiving Stamp of SIR ROO No. 43A Pasig City dated April 15, 2009 Annual Income Tax Return of PRHC Property Managers, Inc. for the calendar year ended 12/2008 consisting of three (3) pages Receiving Stamp of SIR ROO No. 43 Pasig City dated April 15, 2009 Line 30A of SIR Form No. 1702 as Prior Year's Excess Credits other than MCIT in the amount of P4,461 .177 Form 1702Q of PRHC Property Managers, Inc. for the 3rd quarter of taxable year 2008'

PRHC Property Managers, Inc. v. CIR Page 18of29 CTA CASE NO. 8071 DECISION HHHHH - 1 Receiving Stamp of BIR ROO No. 43 Pasig City dated IIIII November 26, 2008 11111 - 1 JJJJJ Form 1702Q of PRHC Property Managers, Inc. for the JJJJJ-1 2nd quarter of taxable year 2008 KKKKK Receiving Stamp of BIR ROO No. 43 Pasig City dated KKKKK-1 August 28, 2008 LLLLL Form No. 1702Q of PRHC Property Manager's Inc. for LLLLL-1 the 151 quarter of the taxable year 2008 Receiving Stamp of BIR ROO No. 43 Pasig City dated May 30, 2008 Supplemental Judicial Affidavit of Ma.Theresa L. Kampitan dated 30 September 2010 consisting of eleven (11) pages Signature of Ma. Theresa L. Kampitan Second Supplemental Judicial Affidavit of Ma. Theresa L. Kampitan dated October 27, 2010 consisting of three (3) pages Signature of Ma. Theresa L. Kampitan Initial presentation of respondent's evidence was set on March 7, 2011 and March 28, 2011. On the latter date, respondent's counsel manifested that there is as yet no Final Report on the audit examination conducted on the petitioner, thus, the parties were ordered by the Court to file their respective Memorandum. On April 27, 2011 , petitioner complied with the same; while respondent failed to file her Memorandum despite notice. Hence, in a Resolution dated May 10, 2011 , the instant case was considered submitted for decision.(

PRHC Property Managers, Inc. v. CIR Page 19of29 CTA CASE NO. 8071 DECISION The parties submitted the following issues6 for this Court's resolution: "1. WHETHER OR NOT PETITIONER HAS AN OVERPAYMENT IN THE AMOUNT OF P1 ,928,458.00 REPRESENTING ITS UNUTILIZED CREDITABLE TAXES WITHHELD AT SOURCE FOR THE TAXABLE YEAR 2007. II. WHETHER OR NOT THE INCOME UPON WHICH THE TAXES WERE WITHHELD FOR THE TAXABLE YEAR 2007 WERE INCLUDED IN THE INCOME TAX RETURN OF PETITIONER FOR THE YEAR 2007. Ill. WHETHER OR NOT PETITIONER'S UNUTILIZED CREDITABLE TAXES WITHHELD AT SOURCE IN THE AMOUNT OF P1 ,928,458.00 FOR THE TAXABLE YEAR 2007 IS SUBSTANTIATED BY DOCUMENTARY EVIDENCE. IV. WHETHER OR NOT PETITIONER IS ENTITLED TO THE REFUND OF THE AMOUNT OF P1 ,928,458.00 REPRESENTING ITS UNUTILIZED CREDITABLE TAXES WITHHELD AT SOURCE FOR THE YEAR 2007." The main issue is whether petitioner is entitled to a refund of its unutilized creditable withholding taxes for the taxable year 2007 in the amount of P1 ,928,458.00. Section 76 of the NIRC of 1997, as amended, provides that the corporate taxpayer's excess tax credits or overpaid income tax in a given taxable year may either be refunded (in the form of cash or tax credit < 6 Docket, pp. 95-96.

PRHC Property Managers, Inc. v. CIR Page20of29 CTA CASE NO. 807 1 DECISION certificate) or carried over and applied to the succeeding taxable quarters or years, to wit: "SEC. 76. Final Adjustment Return. - Every corporation liable to tax under Section 27 shall file a final adjustment return covering the total taxable income for the preceding calendar or fiscal year. If the sum of the quarterly tax payments made during the said taxable year is not equal to the total tax due on the entire taxable income of that year, the corporation shall either: (A) Pay the balance of tax still due; or (B) Carry-over the excess credit; or (C) Be credited or refunded with the excess amount paid , as the case may be. In case the corporation is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, the excess amount shown on its final adjustment return may be carried over and credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed therefor. " Pursuant to this provision , petitioner's excess creditable withholding tax for the taxable year 2007 in the amount of P1 ,928,458.00 appears to be refundable considering that petitioner firmly signified its intention to claim for refund by marking the box "To be refunded" in its Annual Income Tax Return for the taxable year 2007.7C 7 Exhibit "E".

PRHC Property Managers, Inc. v. CIR Page21 of29 CTA CASE NO 8071 DECISION Moreover, petitioner did not carry over any amount of the subject claim in its succeeding Quarterly Income Tax Returns8 and Annual Income Tax Return9 for the taxable year 2008 since the amount of "Prior Year's Excess Credits" reflected in the said returns pertains only to its excess tax credits as of December 31 , 2006. However, for a taxpayer to be entitled to a refund or issuance of tax credit certificate for excess creditable withholding tax at source, it must satisfy the following requisites: 1. The claim must be filed with the Cl R within the two-year period from the date of payment of the tax; 2. It must be shown on the return of the recipient that the income payment received was declared as part of the gross income; and 3. The fact of withholding must be established by a copy of a statement duly issued by the payor to the payee showing the amount paid and the amount of the tax withheld .1 o As to the first requisite, Section 229 of the NIRC of 1997 provides for the reckoning point of the two-year prescriptive period , to wit: "SEC. 229. Recovery of Tax Erroneously or Illegally Collected. - No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected , or of any penalty claimed to have been collected without authority, or of any sum' a Exhibits "HHHHH" to "JJJJJ". 9 Exhibit "GGGGG". 10 Banco Ftlipino Savings and Mortgage Bank vs. Court of Appeals, Court of Tax Appeals and Commissioner ofInternal Revenue, G.R. No. 155682, March 27, 2007.

PRHC Property Managers, Inc. v. CIR Page22of29 CTA CASE NO 8071 DECISION alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid ." (Emphasis supplied) Clearly, the reckoning of the two-year prescriptive period for the filing of a claim for refund/tax credit of excess CWT/quarterly income tax payments starts from the date of filing of the Annual Income Tax Return because it is only from this time that the refund is ascertained .11 In the instant case, petitioner filed its Annual Income Tax Return for the taxable year 2007 on April 15, 2008. Counting from this date, petitioner had until April 15, 201 0 within which to file its claim for refund , both administratively and judicially. Therefore, petitioner's administrative claim for refund filed on November 4, 200812 and the Petition for Review filed on April 13, 201 0, fall within the two-year period prescribed under Section 229 of the NIRC of 1997.( 11 Commissioner of Internal Revenue vs. The Philippine American Life Insurance Co,. eta/., G.R. No. 105208, May 29, 1995. 12 Exhibits "B" and "C".

PRHC Property Managers, Inc. v. CIR Page23of29 CTA CASE NO. 807 1 DECISION In compliance with the second requisite, petitioner presented various Certificates of Creditable Tax Withheld at Source13 duly issued by its clients/affiliates for the taxable year 2007 and Summary of Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source for each of the four quarters of 2007, showing total CWT amounting to P1 ,928,459.67, broken down as follows: Taxable Year Per Summary CWT 2007 Attached to Exhibit "J" p 479 ,045.48 1st Quarter Exhibit "1", 2nd Quarter Exhibit "H" 485,958.64 Exhibit "G" 3rd Quarter Total 469 ,071 .93 4th Quarter 494 ,383 .62 p 1,928,459.67 However, this Court finds that only the amount of P1 ,904,055.18 is properly substantiated with Certificates of Creditable Tax Withheld at Source, detailed as follows: Exhibit Withholding Agent Income Payment CWT Payments for Professional Fees "M" Avalon Condominium Corporation p 42,187.50 p 4 ,218 .75 "P" Casa Miquel Condo. Corp. "U" Greenhills Properties Inc. 13,286 .73 1,993 .02 "V" LTA Condo. Corp. "W" The Nobel Plaza Condo. Corp. 246,887 .73 24 ,688.79 "Z" Philippine Realty & Holdinqs Corp. "AA" Philippine Stock Exchange Centre 165 ,375 .00 24 ,806 .25 "BB" Philippine Stock Exchange Centre "CC" Philippine Stock Exchanqe Centre 117 ,788 .37 17 ,668 .26 "MM" The Pearl Plaza, Inc. 94, 347 .30 9,434.73 596,550 .00 89 ,482.50 594 ,050 .00 89 ,107.50 594 ,050.00 89 ,107.50 77 ,785.71 7 ,778 .58 13 Exhibits "M" to "XXXX".

PRHC Property Managers, Inc. v. CIR Page24of29 CTA CASE NO 8071 DECISION "NN" The Pinnacle Condo. Corp. 75,000 .00 11 ,250.00 "PP" Avalon Condominium Corporation "QQ" Casa Miguel Condo. Corp. 40,848.22 4,084.83 "UU" Greenhills Properties Inc. "VV" LTA Condo. Corp. 27,781 .34 4,167.21 "WW" The Nobel Plaza Condo. Corp. "YY" Philippine Realty & Holdings Corp. 2 4 6 ,8 8 7 .7 3 2 4 ,688 .79 "ll" Philippine Stock Exchange Centre ''AAA'' Philippine Stock Exchange Centre 165,375.00 24,806.25 "BBB" Philippine Stock Exchange Centre "JJJ" The Pearl Plaza, Inc. 117 ,7 8 8 . 3 7 17 ,6 6 8 .2 6 "KKK" The Pinnacle Condo. Corp. "LLL" Avalon Condominium Corporation 87,798.00 8 ,7 7 9 .8 0 "NNN" Casa Miguel Condo. Corp. "PPP" Equitable PCI Bank 596 ,550 .00 89,482 .5 0 "RRR" Greenhills Properties Inc. "SSS" LTA Condo. Corp. 596,550.00 89,482 .5 0 "TTT" The Nobel Plaza Condo. Corp. "VVV" Philippine Stock Exchange Centre 596,550 .00 89,482 .50 "WWW" Philippine Stock Exchange Centre ''XXX'' Philippine Stock Exchange Centre 77 ,785.71 7,778.58 ''AAAA'' Philippine Realty & Holdings Corp. "EEEE" The Pearl Plaza, Inc. 75 ,000 .00 11,250.00 "FFFF" The Pinnacle Condo. Corp. "GGGG" Avalon Condominium Corporation 4 0 , 1 7 8 .5 8 4 , 0 1 7 .8 7 "HHHH" Casa Miguel Condo. Corp. "JJJJ" Equitable PCI Bank 20,131.45 3 ,0 1 9 . 7 2 "KKKK" Greenhills Properties Inc. "LLLL" LTA Condo. Corp. 27 ,000 .00 4 ,050 .00 "MMMM" The Nobel Plaza Condo. Corp. "PPPP" Philippine Stock Exchange Centre 246,887 .73 24 ,6 8 8 .7 9 "QQQQ" Philippine Stock Exchange Centre Philippine Stock Exchange Centre 165,375.00 24 ,806 .2 5 "RRRR" Philippine Realty & Holdings Corp. "TTTT" The Pearl Plaza, Inc. 117 ,7 8 8 .37 17 ,6 6 8 . 2 6 "WWWW" The Pinnacle Condo. Corp. 575 ,000 .00 86 ,250.00 II ) ( ) ( ) ( ) ( I I 596 ,550.00 89,482 .50 596,550 .00 89,482 .50 86 ,911.50 8,691.15 77 ,758.71 7,778.58 75,000.00 11 ,250.00 40 ,178.58 4 ,017.86 20,131.44 3 ,019.71 27,000.00 4 , 0 5 0 .00 246,887 .70 24 ,688.77 165 ,375 .00 24 ,8 0 6 .25 114,049 .02 17 ,107 .35 595 ,000.00 89 ,250 .00 595,000 .00 89 ,250.00 595,000.00 89 ,250.00 89 ,875.81 8 ,987.58 77,785.71 7,778.58 75,000 .00 11 ,250.00 p 10,512,637.31 p 1,485,848.82 Payments for Commissions "N" Banco De Oro -EPCI ,Inc. p 141,309.40 p 14,130.94 "0" Broadford Property Holdings 23 ,632.00 2 ,36 3 .20 "R" Frankfort Property Leasing 3,000 .00 150.00 "S" Frankfort Property Leasing 3 ,000 .00 150.00 "T" Frankfort Property Leasing 3,000.00 150.00 nyu Philippine Amusement Enterprise 21,000 .00 2 ,100.00 "GG" Summit Securities Inc. 43 ,680 .00 4,368.00 "00" UDB International Holdings, Inc. 18,900.00 1,890.00

PRHC Property Managers, Inc. v. CIR Page25of29 CTA CASE NO. 8071 DECISION "SS" Frankfort Property LeasinQ 3,000.00 150.00 "TT" Frankfort Property Leasing "UU" Greenhills Properties Inc. 3,000 .00 150.00 "FFF" Secaucus Development Corp. "MMM" Campershells, Inc. 20 ,925 .00 2,092 .50 "QQQ" Frankfort Property LeasinQ Greenhills Properties Inc. 65,491 .07 6 ,549 . 11 "KKKK" PAE Ventures, Inc. "0000" 181 ,305.80 18,130.58 15,000.00 750 .00 99 ,662.30 9,966.23 21,000.00 2,100.00 p 666,905.57 p 65,190.56 Payments for Management and Technical Consultanc 1 Fees "N" Banco De Oro -EPCI,Inc. p 51,000.00 p 7,650.00 162 ,696 .60 24,404.49 "HH" The Makati Tuscany Condo . Corp. 36,300.00 5,445.00 "II" The Makati Tuscany Condo. Corp. 126,396.60 18,959.49 "JJ" The Makati Tuscany Condo. Corp. 36 ,300 .00 5,445.00 126,396 .60 18,959.49 "KK" The Makati Tuscany Condo. Corp. 162 ,696 .60 24,404.49 162 ,696 .60 24,404.49 "LL" The Makati Tuscany Condo . Corp. 162 ,696 .60 24,404.49 162,696.60 24,404.49 "GGG" The Makati Tuscany Condo. Corp. 162 ,696 .60 24,404.49 162,696.60 24,404.49 "HHH" The Makati Tuscany Condo. Corp. 159,396.60 23,909.49 165,996.60 24,899.49 "Ill" The Makati Tuscany Condo. Corp. 1,840,662.60 p 276,099.39 "BBBB" The Makati Tuscany Condo. Corp. "CCCC" The Makati Tuscany Condo. Corp. "DODD" The Makati Tuscany Condo. Corp. "UUUU" The Makati Tuscany Condo. Corp. "VWV" The Makati Tuscany Condo. Corp . p Payments to Prime Contractors/Sub-Contractors "X" One Wilson Place Condo. Corp. p 49,500 .00 p 736.60 "EE" Philippine Stock Exchange Inc. 40,071 .43 801.43 "FF" Philippine Stock Exchange Inc. 40 ,071.43 801.43 "XX" One Wilson Place Condo. Corp. 46,500 .00 977 .68 "UUU" One Wilson Place Condo. Corp. 45,000.00 803.57 "NNNN" One Wilson Place Condo. Corp. 100,000.00 1,785.71 "SSSS" Philippine Stock Exchange Inc. 36,428 .57 728 .57 p 357,571 .43 p 6,634.99 Payments made by top 10,000 corporations to their local supplier ofservices "DO" Philippine Stock Exchanr:~e Inc. p 40,071.43 p 801.43 "CCC" Philippine Stock Exchanr:~e Inc. "ODD" Philippine Stock Exchange Inc. 40 ,071.43 801.43 "EEE" Philippine Stock Exchange Inc. "YYY" Philippine Stock Exchange Inc. 40 ,071.43 801.43 "ZZZ" Philippine Stock Exchanr:~e Inc. 40,071.43 801.43 163 ,928 .57 3,278.57 40 ,071.43 801.43 p 364,285.72 p 7,285.72

PRHC Property Managers, Inc. v. CIR Page26of29 CTA CASE NO. 8071 DECISION Payments for Rentals ofReal/Personal Properties "Q" First Balfour, Inc. p 310,824.79 p 15,541 .24 "RR" EPSYS Incorporated 237 ,273.20 11 ,863.66 "000" EPSYS Incorporated 355 ,908 .00 17 ,795.40 "II II" EPSYS Incorporated 355 ,908.00 17,795.40 p 1,259,913.99 p 62,995.70 TOTAL p 15,001 ,976.62 p 1,904,055.18 Anent the third requisite, a perusal of the withholding tax certificates revealed that out of the CWT of P1 ,904,055.18, the amount of ~1 ,841 ,059.48 was withheld from petitioner's sales of services in the amount of ~13,742 , 062.63; while the remaining amount of ~62,995.70 was withheld from petitioner's rental income in the amount of P1 ,259,913.99, broken down as follows: Amount of Amount of CWT Income Nature of Income Sales of Services Professional Fees p 10,512,637.31 p 1,485,848.82 Commissions 666 ,905.57 65 ,190 .56 Management & Technical Consultancy Fees 1,840 ,662.60 276 ,099 .39 Payments to Prime Contractors/Subcontractors 357 ,571.43 6 ,634 .99 364 ,285 .72 7,285.72 Payments made by Top 10,000 corporation to their local supplier of services Subtotal p 13,742,062.63 p 1,841 ,059.48 Rentals Total 1,259,913.99 62,995.70 p 15,001,976.62 p 1,904,055.18 In its 2007 Annual Income Tax Return 14, petitioner reflected the following gross income:~ 14 Exhibit "E".

PRHC Property Managers, Inc. v. CIR Page27of29 CTA CASE NO. 8071 DECISION Nature of Income Amount of Income Sale of Services p 18,575,913.00 Non-Operating and Taxable Other Income p 1,259,912.00 Rental Income 75,000.00 Gain on Sale Others 772,004.00 Subtotal p 2,106,916.00 Total p 20,682,829.00 Evidently, petitioner declared in its 2007 Annual Income Tax Return the income payment from rentals in the amount of P1 ,259,913.99 (save for the minor difference of P1.99) upon which the claimed creditable taxes of P62,995.70 were withheld. However, as to petitioner's income payments from sales of services, there is a discrepancy between the gross income of P18,575,913.00 reflected per petitioner's Annual Income Tax Return vis-a-vis the gross income of P13,742,062.63 shown per Certificates of Creditable Tax Withheld. Moreover, petitioner failed to present documentary proofs, such as, but not limited to, detailed general ledger, sales journal, reconciliation schedules, sales invoices/receipts or any other document whereby the Court can verify the discrepancy and that the income payments of P13, 742,062.63 related to the claimed creditable withholding taxes of P1 ,841,059.48 formed part of the P18,575,913.00 gross income declared in its 2007 Annual Income Tax Return.<.

PRHC Property Managers, Inc. v. CIR Page28of29 CTA CASE NO 8071 DECISION In sum, petitioner sufficiently complied with the three requisites for refund of excess CWT only to the extent of P62,995. 70 out of the total claimed CWT of P1 ,928,458.00. But considering that petitioner had an income tax liability for 2007 in the amount of P382, 132.0015 and failed to substantiate its prior year's excess credits of P4,843,309.00, the CWT of P62,995.70 shall be applied against the income tax due of P382, 132.00. Since the income tax due of P382, 132.00 is greater than the claimed CWT of P62,995.70, there is no excess CWT for taxable year 2007 which may be refunded. WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED for lack of merit. SO ORDERED. . (ll,tJ:; ~- M�~ ..c~ WE CONCUR: CIELITO N. MINDARO-GRULLA Associate Justice ~~C-. ~~~� #- JiJANITO C. CASTANEDfi:, JR. CAESAR A. CASANOVA Associate Justice Associate Justice 15 Exhibit "E", line 27.

PRHC Property Managers, Inc. v. CIR Page29of29 CTA CASE NO 807 1 DECISION ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division . ~h>C.~~.Q .fUANITO C. CASTANEDA,~R.' Associate Justice Chairperson CERTIFICATION Pursuant to Article VIII , Section 13 of the Constitution , and the Division Chairperson 's Attestation , it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ~~~~ ERNESTO D. ACOSTA Presiding Justice