VALHALLA PROPERTIES LIMITED, INC., v. CITY OF DAVAO and HON. RODRIGO S. RIOLA, in his capacity as the City Treasusrer of Davao City

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY EN BANC VALHALLA PROPERTIES CTA EB No. 1706 (CTA AC No.154) LIMITED, INC., Present: Petitioner, - versus - DEL RO~SARIO I P.J.' CASTANEDA, JR., CITY OF DAVAO and HON. UY, RODRIGO S. RIOLA, in his FASON-VICTORINO, capacity as the City MINDARO-GRULLA, Treasurer of Davao City, RI NGPIS-LIBAN, MANAHAN, Respo ndents. BACORRO-VILLENA, and X- - - - - - - - - - - - - - - - - - - MODESTO-SAN PEDRO, JJ. Promulgated: DEC 0 2 2019 RESOLUTION Fabon- Victorino, J : On May 20, 2019, t he Court En Bane reversed and set aside t he Decision dated March 2, 2017 and Resolution dated Au gust 1, 2017, both rendered by the Court in Division, and ordered respondents to refund to petitioner the amount of P655,632.50 representing erroneously paid local business taxes for the 1st and 2nd quarters of 2011. 1 Rollo, pp. 19 0 -2 13 .

RESOLUTION CTA EB No. 1706 Undaunted, respondents moved 2 to reconsider the adverse Decision of May 20, 2019, arguing that: I. The Court En Bane erred in concluding that since there is no compelling evidence on record that petitioner was authorized by the Bangko Sentral ng Pilipinas (BSP) to perform quasi banking activities, petitioner cannot be treated as non-bank financial intermediary (NBFI); II. The Honorable Court En Bane failed to appreciate that indeed, petitioner's primary purpose and business activities as stated in the Amended Articles of Incorporation are all within the purview of the functions of a non-bank financial intermediary; and III. The Honorable Court En Bane erred in concluding that petitioner's assets, being declared as owned by the government pursuant to the COCOFED Decision, is exempt from the imposition of local business tax. For its part3, petitioner maintains that it is entitled to the refund of erroneously collected local business taxes for the pt and 2nd Quarters of 2011 on its interest and dividend income realized in the year 2010, claiming that: A. Since it is not a NBFI, respondents are legally proscribed to impose LBT on it is dividend and interest income realized in the year 2010 under Section 133(a) ofthe LGC; B. Being a mere holding company and not a NBFI, its dividend and interest income may not be subjected to LBT; and C. The San Miguel Corporation (SMC) shares of stock are property owned by the Republic of the Philippines, hence, the fruits originating therefrom such as the subject dividend and interest income are exculpated from LBT imposition pursuant to Section 133(o) of the LGC. A scrutiny and close attention at the arguments of the parties raised in their respective pleadings reveal that they 2 Respondents' Motion for Reconsideration dated July 2, 2019, ibid. at pp. 228- 238. 3 Petitioner's Comment dated August 30, 2019, id. at pp. 242-270.

RESOLUTION CTA EB No. 1706 were virtually truncated from those advanced in their previously filed pleadings, all of which have been meticulously addressed and passed upon by the Court En Bane. There being no new or significant matter warranting modification, much more reversal of the challenged Decision of May 20, 2019, respondents' Motion for Reconsideration dated July 2, 2019 is DENIED, for lack of merit. SO ORDERED.

RESOLUTION CTA EB No. 1706 We Concur: Presiding Justice ~~-~c.~ Q_ ERL~UY (I reiterate my Dissenting Opfflion) Associate Justice JUANITO C. CASTANEDA, JR. Associate Justice CilJ; N. M~~~ .. &~ ~- ~ 4 '---- CIELITO N. MINDARO-GRULLA MA. BELEN RINGPIS-LIBAN Associate Justice Associate Justice ~- 7- ~._.�.~J.~---- - CATHERINE T. MANAHAN ciate Justice Associate Justice cia e Justice