CTA Case No. 2081 (Decision)

� � ' 'l tcfoF THl. PHILI PP :-.I E8 l. "Llt'( u F T A..:\. A P , L8 Q�.ezoN > TABACAL'ERA I NSURANCE C. T.A. CASE NO. 2081 CO . , INC ., Petitioner , versus COMMI SSIONER OF INTERNAL REVENUE , Respondent . X- - - - - - - - - X DE CI S I 0 N Petitioner, a corporation filing its income tax returns on the calendar year basis , was required by re- spondent to pay the sum of ~26,930 . 10 , as deficiency in- come tax and delinquency penalties for the year 1968 . The basis of the assessment was the application, effective July 1 , 1968 , of the new corporate income tax rates of 25% and 35% prescribed in Republic Act No. 5431 , which in- creased the old rates provided in Section 24 of the Revenue Code . In its appeal to this Court from the decision of respondent dated January 9 , 1970 denying its protest against the assessment , petitioner contends that under Section 10 of Republic Act No . 5431 which provides that the provisions of said Act 11 shall apply to income for taxable years beginning after June 30 , 1968 , 11 the in- creased rates are applicable only to its income beginning January 1, 1969 and not July 1, 1968 , since its taxable year , which is the calendar year , begins on January 1st

DECISION - CTA C~E NO . 2081 2 and ends on December 31st each year . The issue to be resolved is already well settled . In previous cases involving the same issue , it was held that the increased rates pre- scribed in Republic Act N~. 5431 are applicable to income of calendar year corporations beginning Jan- uary 1, 1969 and not July 1, 1968 as interpreted by respondent . Thus , from July 1, 1968 until December 31 , 1968 , the income of such corporations is still subject to the old rates prescribed under Section 24 of the Internal Revenue Code, before its amendment by Republic Ac t No . 5431 . ('lhe Nanila Times Pub . Co ., Inc . v . Comm . of Int . Rev ., C. T�� Case No. 2263 , Dec . 17 , 1973 , cert . denied in G. R. No . L-38154, May 10 , 1974; Zamboanga ~ood Products , Inc . v . Comm . of Int . Rev ., C. T.A. Case No . 2053 , June 3 , 1974; Colgate Palmolive Phil ., Inc . v . Comrn . of Int . Rev ., C. T.A. Case No . 2293, June 10, 1974; Phil. Aviation Corp . v . Comm . of Int . Rev ., C. T.A. Case No . 2195 , ugust 5, 1974; First Insular Bank of Cebu v . The Comm . of Int . Rev ., C. T.A. Case No . 2262 , August 29, 1974. ) WHEREFORE , finding no valid ground to deviate from the aforesaid ruling of this Court in said \7

D CISION - CTA C NO . 2081 3 cases , the decision appealed from is hereby reversed . No costs . SO ORDERED . Quezon City , ovember 20 , 1974. ~~ RO N M. DMALI Presiding Judge '4ft-kv~�"' NISIAO R. LVAREZ ssociate Judge ~Itt--' 0 L . V NCE - ssociate J udge