CTA Case No. 6075 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY MOTORMALL DAVAO CORPORATION, C.T.A. CASE NO. 6075 Petitioner, Promulgated: -versus- COMMISSIONER OF INTERNAL REVENUE, DECISION This case involves a claim for refund of the amount of P307,765 .00 representing excess or overpaid income tax as ofDecember 31 , 1998. Petitioner is a domestic corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines with main office address at EDSA corner Madison Street, Mandaluyong City (par. 1, Joint Stipulation ofFacts) . On April 15, 1998, petitioner filed its Annual Income Tax Return for the year 1997, declaring a net loss of P3 78,720.00 and creditable withholding tax in the amount of P446,364.00, consisting of income taxes withheld by petitioner' s vanous customers/clients and payors on its income payments (Exhibit "A "). Through a letter dated November 27, 1998, petitioner filed its administrative claim for refund in the amount of P446,364.00 representing unutilized creditable withholding tax for 1997 (Exhibit "C "). On April 15, 1999, petitioner filed its Annual Income Tax Return for the taxable year 1998 declaring an income tax due in the amount ofP275,479.00 and total tax credits

DECISION C.T.A. CASE NO. 6075 Page 2 amounting to P583 ,244.00, consisting of its prior year' s excess credits of P446,364.00 and tax credits for the first three quarters in the amount ofP136,880.00, resulting to an overpayment of P307,765 .00 (Exhibit "B "). According to petitioner, it carried forward its 1997 unutilized creditable withholding tax amounting to P446,364.00 to the succeeding year 1998 because it was informed by the Appellate Division of the Bureau of Internal Revenue (BIR) that the investigation for tax refund claim for 1997 is still pending. On January 11, 2000, petitioner filed its claim for refund with the same division of the BIR in the amount of P307,765 .00, representing its excess creditable withholding tax as ofDecember 31 , 1998 (Exhibit "E"; par. 6 Joint Stipulation ofFacts) . As the two-year prescriptive period was about to expire, petitioner filed its Petition for Review with this court on April 14, 2000. In his Answer filed on May 26, 2000, respondent raised the following Special and Affirmative Defenses: "4. In an action for refund, the taxpayer has the burden to show that the taxes paid were erroneously or illegally collected and failure to do so is fatal to the action; 5. Claims for tax refund are strictly construed against the taxpayer. Petitioner has no cause of action." The sole issue to be resolved is: Whether or not, on the basis of the evidence presented, petitioner is entitled to the claim for refund in the amount of P307,765 .00, representing unutilized creditable withholding taxes for the taxable years 1997 and 1998. The court rules to partially grant the instant claim for refund.

DECISION C.T.A. CASE NO. 6075 Page 3 In order to be entitled to a refund of excess creditable withholding taxes, the taxpayer-claimant must prove compliance with the following three (3) basic requirements: 1. That the claim for refund was filed within the two-year prescriptive period provided under Section 204(3) [now 204(C)], in relation to Section 230 [now 229], of the Tax Code, as amended ; 2. That the fact of withholding is established by a copy of a statement duly issued by the payor (withholding agent) to the payee, showing the amount paid and the amount of tax withheld therefrom; and 3. That the income upon which the taxes were withheld were included in the return of the recipient [Revenue Regulations No. 2-98; Revenue Regulations No. 12-94 (amending Revenue Regulations No.6-85); Citytrust Finance Corporation vs. The Commissioner of Internal Revenue, CTA Case No. 4134, November 11, 1991, affirmed by the Court of Appeals in Citytrust Finance Corporation vs. Court of Tax Appeals and The Commissioner of Internal Revenue, CA. G.R. SP No. 28239, March 14, 1994; Citytrust Finance Corporation (formerly Investors Finance Corporation/FNCB Finance) vs. Commissioner 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 Corp.IFNCB Finance) and the Court of Tax Appeals, CA G.R. SP No. 31104, Apri/18, 1994; Ayala Life Assurance, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 5631, dated May 11, 2000; Stock Transfer Service, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 5796, dated May 3, 2000; Union Bank of the Philippines vs. Commissioner of Internal Revenue, CTA Case No. 5623, dated April 12, 2000; Citibank, N.A. vs. Court of Appeals and Commissioner ofInternal Revenue, 280 SCRA 459; ACCRA Investments Corporation vs. Court of Appeals, 204 SCRA 957].

DECISION C. T.A. CASE NO. 6075 Page 4 Petitioner filed its administrative claim for refund for the taxable years 1997 and 1998 on December 3, 1998 and January 11 , 2000, respectively. On the other hand, its judicial claim for refund for the taxable years 1997 and 1998 was filed with this court on April 14, 2000. Reckoned from April 15, 1998 and April 15, 1999, the dates when petitioner filed its 1997 and 1998 Annual Income Tax Returns, respectively, both the administrative and judicial claims for refund were filed well within the two-year prescriptive period. We proceed to the second requirement. To prove the fact of withholding, petitioner presented vanous certificates of creditable withholding tax at source, details of which are shown below: FOR 1997 EXHIBIT WITHHOLDING AGENT INCOME PAYME NT WITHHELD F Amadeo. Pedro p 499,000.00 p 4 ,99 0 .0 0 G Ayala Agri. Dep't. Corp. 17,936.00 179.36 G -1 Ayala Agri. Dep't. Corp. 4,7 1 0 . 10 47. 10 G-2 Ayala Agri. Dep't. Corp. 450.00 4.50 G-3 Ayala Agri. Dep't. Corp. 25 ,962.00 25 9.62 G-4 Ayala Agri. Dep't. Corp. 3,658.25 36.58 G-5 Ayala Agri . Dep't. Corp. 140.00 1.40 G-6 Ayala Agri. Dep't. Corp. 9,275 .00 92 .75 G-7 Ayala Agri. Dep't. Corp. 3,833 .00 38.33 G- 8 Ayala Agri. Dep't. Corp. 20 ,4 6 6 .0 0 204.66 G-9 Ayala Agri. Dep't. Corp. 2,933 .75 29 .33 H BIPP-Bukidnon Forest Inc. 19 8,913 .0 0 1,808.30 Barangay Piapi 217,272.72 2.1 72. 72 J City Gov't. of Davao 40.431.00 6 2 4 .92 J-1 City Gov't. of Davao 17,960.00 163.27 J-2 City Gov't. ofDavao 31 ,120.00 282.9 1 J-3 City Gov't. of Davao 3 ,2 50 .0 0 131.44 J-4 City Gov't. of Davao 37. 103 .00 3 6 4 .93

DECISION C.T.A. CASE NO. 6075 Page 5 J-5 City Gov't. ofDavao 52,566.00 489.67 J-6 City Gov't. of Davao 29,753 .00 366.89 J-7 City Gov't. ofDavao 54,927.80 797 .55 J-8 City Gov't. of Davao 21 ,929.95 389.16 K Coca-cola Bottlers 13,702.00 137.02 K-1 Coca-cola Bottlers 420,911.00 4,209.11 L Motormall 3 8 4,545 .0 0 3,845.45 M Davao Fruits Corporation N Davao Light & Power Co. 2,070.00 20.70 N-1 Davao Light & Power Co. 821 , 127.00 8.211.27 N-2 Davao Light & Power Co. 131 ,909.00 1,319.09 N-3 Davao Light & Power Co. 0 Davao Union Cement Corp. 10,671.00 106.7 1 p DBP 144,061.00 1,440 .6 1 P-1 DBP 340,909.00 3.409 .09 Q Dole Philippines, Inc. Q-1 Dole Philippines, Inc. 1,460.00 13.27 Q-2 Dole Philippines, Inc. 21,368.00 213.68 R DTI-XII 4,265,165 .48 42,651.68 R-1 DTI-XII 4,0 3 7,313 .66 40,373.16 R-2 DTI-Xll R-3 DTI-Xll 8,419.00 84.19 R-4 DTI-Xll 7,799.00 77.99 R-5 DTI-Xll 18,385 .00 183.85 R-6 DTI-XII 18,390.00 183 .90 R-7 DTI-Xll 1,968.00 19.68 R-8 DTI-Xll 1,725 .00 17.25 R-9 DTI-Xll 6.46 R-10 DTI-Xl1 646.00 23.23 DlLG 2,323.00 6.13 s Eden Fruits Corporation 44.55 Eden Fruits Corporation 613.00 69.74 T Eden Fruits Corporation 4,454.55 58.16 T-1 Equitable Bank 6,974.00 2,163 .63 T-2 Equitable Bank 5,816.00 23.1 I LGU-Rosario 216,363.00 41.89 u LGU-Rosario 2,311.00 99.46 Marbel Telephone System 4,189.00 37.04 U-1 Marbel Telephone System 9,946.00 19.20 7,408.95 216.30 v 3,840.04 380.00 21 ,630.00 4.356 .00 V-1 38,000.00 4.356 .00 217,800.00 w 217,800.00 W-1

DECISION C.T.A. CASE NO. 6075 Page6 X Maritime Industry 3,268.00 32.68 y Mindanao Geothennal 1,881,818.00 18,818.18 Monark Equipment z Monark Equipment 6,390.98 64.00 Monark Equipment 3,200.00 31.99 Z- 1 Monark Equipment 3,054.55 30.54 Z-2 Monark Equipment 1,163.64 11.64 Z-3 Municipality of Carmen 1,694.09 16.93 Z-4 Municipality of Carmen 1,800.00 18.00 AA Municipality ofKatipw1an 94,370.00 943.70 AA-1 Municipality ofKatipunan 1,845.40 16.78 88 Municipality ofMaco 6,304.95 57.31 88-1 Municipality ofManay 5,788.00 57.88 Municipality of Panabo 25,851.00 258.51 cc Municipality of Panabo 63,717.50 637 . 18 Municipality of Panabo 30,100.35 301.00 DO Municipality of Panabo 58,970.65 589.71 Municipality ofPanabo 61 ,674.95 616.75 EE Municipality ofPanabo 87,262.30 872.63 EE-l Municipality ofSta. Cruz 76,051.25 760.51 EE-2 Municipality ofSta. Cruz 3,242.00 29.47 EE-3 Municipality ofSta. Cruz EE-4 Municipality ofSta. Cruz 915 .0 0 8.32 EE-5 Municipality of Sta. Cruz 7,866.00 71.50 FF Municipality ofSta. Cruz 10,982.20 99.83 FF-1 Municipality ofSta. Cruz FF-2 Municipality ofSta. Cruz 466.00 4.23 FF-3 Municipality ofSta. Cruz 742.50 6.75 FF-4 Municipality of Sta. Cruz 7,600.00 69.09 FF-5 Municipality ofTagum 2,168.95 19.72 FF-6 National Food Authority 950.00 8.63 FF-7 National Food Authority 1,295.00 11. 77 FF-8 NIA Libungan Parish 38,251.00 382 .51 FF-9 Office ofthe Pres.-Mindanao 3,540.00 33.46 GG Office ofthe Pres.-Mindanao 6,495.60 64.95 HH Pescarich MDC 2,508.00 25.08 HH-1 Phil. Japan Active Carbon 581 ,363.65 5.813.64 II Phil. Japan Active Carbon 3,049.99 30.49 JJ Phil. Japan Active Carbon 1,095 ,000 .00 10,950.00 JJ-1 48,212.00 482.12 KK 447,873.00 4.478 .73 LL 193,221.00 1.932.21 LL-1 LL-2

DECISION C.T.A. CASE NO. 6075 Page 7 LL-3 Phil. Japan Active Carbon 513,282.00 5, 132.82 MM Phil. Postal Corporation 3,236.36 32.36 MM-1 Phil. Postal Corporation 3,077.27 30 .77 MM-2 Phil. Postal Corporation 10,481.81 104.81 MM-3 Phil. Postal Corporation 5,598.18 55 .98 MM-4 Phil. Postal Corporation 3,443 .63 34.43 MM -5 Phil. Postal Corporation 2,054.54 20.54 MM-6 Phil. Postal Corporation 5, 115.27 51.15 MM -7 Phil. Postal Corporation 1,040.00 9.45 MM-8 Phil. Postal Corporation 2,718.18 27.18 MM-9 Phil. Postal Corporation 1, 190 .9 0 11.90 MM-10 Phil. Postal Corporation 1,599.09 15.99 Phil. Science High School NN Pilipinas Hino Inc. 172,727.27 1.727.27 00 Pilipinas Hino Inc. 165,797.00 1,657.97 00 Pilipinas Transport Industries 4 , 112 ,518.20 205.625 .91 Pilipinas Transport Industries 36,636.00 pp Provincial Gov't. ofZamboanga 1,630,000.00 366.36 pp Provincial Gov't. ofBukidnon 120,952.30 16,300.00 Provincial Gov't. of Davao 404,500.00 QQ Provincial Gov't. ofDavao 75,268.00 1.099.56 Provincial Gov't. ofDavao 16,529.00 3,677.00 RR Provincial Gov't ofCotabato 135 ,076 .00 Provincial Gov't of Cotabato 18,636.95 752.68 ss San Miguel Brewing Group 117,714.50 163.29 Spamast 127,685.91 1,350.76 SS-1 Suzuki Phils. Incorporated 89,500.00 186.37 SS-2 Suzuki Phils. Incorporated 22,077.00 1.177. 14 TT Suzuki Phils. Incorporated 32,751.00 1.276.84 TT-l Suzuki Phils. Incorporated 117.817.00 895 .00 UP Mindanao 41 ,320.00 220.77 uu UP Mindanao 100,000.00 327.51 vv UP Mindanao 100,000.00 1.178.17 UP Mindanao 184,373 .00 413.20 ww UP Mindanao 100,000.00 909.09 UP Mindanao 607,500.00 909.09 WW-1 UP Mindanao 279.430.00 1.843.73 WW-2 Yellow Bus Line 188,693 .00 909.09 WW-3 Yell ow Bus Line 2 1 4,000 .00 5,522.73 XX 54,633 .00 2,794.30 XX-1 1,886.93 XX-2 4.280 .00 XX-3 546.33 XX-4 ZZ-5 ZZ-6 AAA AAA-1

DECISION C.T.A. CASE NO. 6075 Page 8 AAA-2 Yellow Bus Line 57,430.35 574.30 AAA-3 Yellow Bus Line AAA-4 Yellow Bus Line 118.394.00 1, 183.94 Total 52,982.00 529.82 p 27,623,449.46 p 446,364.94 FOR 1998 EXHIBIT WITHHOLDING AGENT INCOME PAYMENT WITHHELD BBB Alcantara & Sons p 5,392.73 p 53 .93 BBB-1 Alcantara & Sons 4,618.00 46 . 18 BBB-2 Alcantara & Sons 3,836.36 38.36 CCC Alsons Dev. & Investment Corp. 1,480.86 14.8 1 CCC-I Alsons Dev. & Investment Corp. 4, 123 .95 41.24 DDD Ayala Agri. Dep't. Corp. 2,901.20 29.01 DDD-1 Ayala Agri. Dep't. Corp. 5,6 8 9 .0 0 56 .89 DDD-2 Ayala Agri . Dep't. Corp. 5,554.00 55 . 5 4 DDD-3 Ayala Agri. Dep't. Corp. 9,817.00 98 . 17 DDD-4 Ayala Agri. Dep't. Corp. 2,429.00 24.29 DDD-5 Ayala Agri. Dep't. Corp. 8,080.00 80.80 DDD-5 Ayala Agri. Dep't. Corp. 8,832.00 88.32 DDD-6 Ayala Agri. Dep't. Corp. 495 .0 0 4 .9 5 EEE BIPP-Bukidnon Forest Inc. 72,682.00 660.75 FFF Bislig Municipal Government 23 ,645.00 236.45 GGG Busco Sugar Milling 3.161.82 31. 62 HHH City Government of !ligan 1,584 ,0 0 0 .0 0 15,840 .00 III City Government of Surigao 75,745 .00 688.58 JJJ City Government ofTagum 550,000.00 5,500 .00 KKK Coca-cola Bottlers 303,065.00 3.030.65 KKK-I Coca-cola Bottlers 226,468.00 2.264.68 LLL Davao Light & Power Co. 220,641.00 2,206.41 LLL-1 Davao Light & Power Co. 11,631.00 11 6.31 LLL-2 Davao Light & Power Co. 15,455 .0 0 154.55 MMM DTI-XII 41 ,923.00 419 .23 MMM- 1 DTI-XII 2.000.00 20.00 NNN Duratrak Corporation 29,634.00 269.40 N N N -1 Duratrak Corporation 1,271.00 11.55

DECISION C.T.A. CASE NO. 6075 Page 9 N N N -2 Duratrak Corporation 12,623 .25 114.76 000 Eden Corporation 31 ,711.00 317.11 000-1 Eden Corporation ppp Eden Corporation 7 ,824.00 78.24 Eden Corporation 1.495.00 14.95 PPP-1 Eden Corporation 1.968.00 19.68 000-2 Eden Corporation 4,510.00 45 .10 PPP-2 Equitable Card Network lnc. 2,579.00 25.79 QQQ FGU lns. Corporation 8.848.53 44.24 RRR Island Garden City ofSa.mal 11.918.18 119 . 18 SSS-1 Island Garden City of Samal 15,080.40 150.80 SSS-1 LBP-Butuan City 1,300.00 13.00 "ITT Monark Qquipment 7 ,813 .0 0 78.13 Monark Qquipment 1,745 .0 0 17 .45 uuu Monark Qquipment 3 , 193 .0 0 31.93 uuu Monark Qquipment 1,745.00 17.45 Monark Qquipment 3, 193.00 31.93 UUU- 1 Monark Qquipment 1,727.00 17.27 UUU- 1 Municipal Gov't. of Asuncion 76,377.00 763 .77 UUU-2 Municipal Gov't. of Asuncion 7,000 .0 0 70 .00 UUU-2 Municipal Gov't. of Digos 25,000.00 250.00 Municipal Gov't. ofDigos 280,800.00 2.552.73 vvv Municipality ofPanabo 1,572.00 14.29 Municipality of Panabo 16,959.70 169.60 VVV-1 Municipality of Panabo 64,370.85 643.71 Municipality ofSta. Cruz 3.950.00 39.50 www Municipality ofSta. Cruz 5,066.00 50.66 National Food Authority 5,290.00 48.09 WWW-1 National Food Authority 1,360.00 12 .36 XXX National Food Authority 3,831.55 34.38 XXX-I National Food Authority 5.396.00 53 .9 6 XXX-2 National Food Authority 4,909.00 44.63 National Food Authority 3,697.60 33.61 yyy NIA-Provinciallrrigation 2,237.00 22 .37 N IA- Pro v i n c i a l l r r i g a t i o n 6 ,363 .0 0 63 .63 YYY -1 NIA-Region XII 27,749.00 277.49 Office of the Pres. Mindanao 27,749.00 277.49 zzz Office of the Pres. Mindanao 1,800.00 18.00 Office ofthe Pres. Mindanao 7.27 ZZZ-1 727.00 6.43 ZZZ-2 643 .0 0 ZZZ-3 ZZZ-4 ZZZ-5 AAAA AAAA- 1 AAAA-2 BBBB BBBB-1 BBBB-2

DECISION C.T.A. CASE NO. 6075 Page 10 ecce Pepsi Cola Bottlers Phils. 5,209.00 52 .09 ecce Pepsi Cola Bottlers Phils. 59,015 .00 590.15 120,071.00 1.200.71 CCCC-1 Pepsi Cola Bottlers Phils. 1,460.00 13 .27 DDDD Philippine Coconut Authority 11 ,517.23 151.17 9 ,693 .73 96.94 EEEE Philippine Information Agency 8,247.36 82.47 6,037.08 60 .36 EEEE-1 Philippine Information Agency 298,570.00 2,985 .70 35,061.00 350.61 EEEE-2 Philippine Information Agency 176,400.00 1,764.00 65 ,376 .00 653 .76 EEEE-3 Philippine Information Agency 2.700.00 27 .00 3,347.27 33.47 FFFF Philippine Japan Active Carbon 1,363 .63 13 .6 3 FFFF-1 Philippine Japan Active Carbon 23,609.09 236.09 35,270.00 352.70 FFFF-2 Philippine Japan Active Carbon 4 ,509 .0 9 45 .09 FFFF-3 Philippine Japan Active Carbon 1,938.18 19.38 13 ,333 .63 133.33 GGGG Philippine Postal Cmporation 1,738.18 17.38 10,909.09 109.09 GGGG-1 Philippine Postal Corporation 1,227.27 12.27 1,610.90 16.1 0 GGGG-2 Philippine Postal Corporation 1,477.27 14.77 1,686.36 16.86 GGGG-3 Philippine Postal Corporation 56,636.36 566.36 1,245.45 12 .45 GGGG-4 Philippine Postal Corporation 13,680 .23 136.80 3.194.59 31.95 GGGG-5 Philippine Postal Corporation 17,401.00 174.01 30,859.00 308.59 GGGG-6 Philippine Postal Corporation 30,000.00 3.000 .00 200,000.00 10.000 .00 GGGG-7 Philippine Postal Corporation 32,501.00 325 .01 45 ,454 .55 454.55 GGGG-8 Philippine Postal Corporation 1,802.00 16.00 15,345 .00 140 .00 GGGG-9 Philippine Postal Corporation 6 3,92 6. 00 639.26 GGGG-10 Philippine Postal Corporation GGGG-11 Philippine Postal Corporation GGGG-12 Philippine Postal Corporation GGGG-13 Philippine Postal Corporation GGGG-14 Philippine Postal Corporation GGGG- 15 Philippine Postal Corporation HHHH Phil. Science High School HHHH-1 Phil. Science High School 1111 Pilipinas Hino Inc. lll1-l Pilipinas Hino Inc. llll-1 Pilipinas Hino Inc. llll-2 Pilipinas Hino lnc. IIII-3 Pilipinas Hino Inc. JJJJ Pilipinas Palmoil Plantations Inc. KKKK Provincial Gov't. of Bukidnon KKKK-1 Provincial Gov't. of Bukidnon LLLL Provincial Gov't. ofDavao

DECISION C.T.A. CASE NO. 6075 Page 11 LLLL Provincial Gov't. of Davao 7 ,495 .00 74.95 1,400,000.00 MMMM Provincial Gov't. ofDavao Del Sur 1,428,000.00 12,727.27 MMMM- 1 Provincial Gov't. of Davao Del Sur 5,506.05 12.981.82 21 ,900.00 NNNN Provincial Gov't ofDavao Orriental 43,208.00 50.05 379,072.85 0000 Provincial Gov't. ofZamboanga Del Norte 61 ,582.50 219 .00 50,000.00 0000-1 Provincial Gov't. ofZamboanga Del Norte 52,000.00 432.08 50,000.00 pppp San Miguel Corporation 1,400,000.00 3,790.72 I ,483 ,529 .0 0 PPPP-1 San Miguel Corporation 30,979.00 6 15.80 47,440.00 QQQQ Soutlunin Transport Warehousing 500 .00 2,459.90 QQQQ-1 Soutlunin Transport Warehousing 6, ll0.00 520.00 8,590.00 QQQQ-2 Soutlunin Transport Warehousing 14,508.00 500.00 6,961.00 RRRR Spanish Assistance Integrated 665,573 .25 14,000.00 172,671.00 ssss Stanfilco 223,904.45 14,835.29 12,891,604.52 TTTT Suzuki Phils. Incorporated 309.09 The Maryknoll Fathers Inc. uuuu Trofresh 474.40 vvvv UP Mindanao 223.63 wwww 61.10 UUUU-1 The Maryknoll Fathers Inc. 85 .90 WWWW-2 UP Mindanao 145.08 WWWW-3 UP Mindanao 69.61 xxxx Yellow Bus Line 6,655.73 X>v"C<-1 Yellow Bus Line 1,726.71 X>v"C<-2 Yellow Bus Line 2,239.03 Total p p 136,764.28 After a careful examination of the above-enumerated exhibits, the court rules to disallow the following : 1) Exhibit DD in the amount ofP258 .51 -the certificate indicated no particular date; 2) Exhibit I in the amount ofP2, 172.72 representing withholding tax pursuant to RA 7649 - the withholding is for creditable input VAT; 3) Exhibits UUU, KKK-1 and AAAA in the aggregate amount of P2,377.69 - they were merely provisionally marked and petitioner failed to compare them with their originals or even present certified true copies. These exhibits were denied admission by

DECISION C.T.A. CASE NO. 6075 Page 12 the court in its resolution dated December 14, 2001 (CTA records, pp. 51 7-519). Anent the third requirement, petitioner was able to prove that the income upon which its 1997 and 1998 creditable withholding taxes were included in the gross income declared by petitioner in its 1997 and 1998 Annual Income Tax Returns. For the taxable year 1997, petitioner declared gross income in the amount ofP234,029,593 .00, which is greater than the amount of P27,623 ,449.46, the total income payments reflected in the 1997 certificates of withholding tax. Likewise, the amount of gross income declared by petitioner in its 1998 Annual Income Tax Return is P122,697,810.00, which far exceeds the total income payments declared in the certificates of creditable income tax withheld at source which is P12,891 ,604.52. Finally, this court finds that petitioner' s excess creditable withholding taxes for the years 1997 and 1998 were not carried-over to the taxable year 1999 (page 594, CTA Records). This clearly shows that the aggregate amount of excess creditable withholding taxes for the years 1997 and 1998 were not utilized. In sum, petitioner is entitled to the refund of excess creditable withholding taxes for the years 1997 and 1998 in the reduced amount ofP302,841.30, computed as follows : Total Excess Creditable Withholding Taxes for 1997 & 1998 P583 ,244.00 Less: Exceptions 1. Withholding Tax Certificate without date p 258 .51 2. Withholding by Govt. pursuant to RA 7649 2, 172 .72 3. Amount denied per court' s resolution 2,377.69 4. Unsubstantiated amount Creditable Withholding Tax per ITR P583 ,244 .00 Less : Withholding Tax per Certificates (P136,764 .28+P446,364 .94) 583,129 .22 114.78 4,923 .70

DECISION P578,320.30 C.T.A. CASE NO. 6075 275.479 .00 Page 13 P302,841 .30 Balance before 1998 income tax due Less : Income Tax Due for 1998 Refundable Amount WHEREFORE, in view of the foregoing, the court finds the instant petition meritorious. Accordingly, respondent is hereby ORDERED to REFUND to petitioner the amount of P302,841.30 representing excess or overpaid income tax as of December 31, 1998. SO ORDERED. ~~-c~ ERNESTO D. ACOSTA Presiding Judge WE CONCUR: ~-$-@.~~ 0 'iTIANITO c. CASTANEDA,~ Associate Judge Associate Judge CERTIFICATION I hereby certify that the above decision was reached after due consultation with the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution. CL::-~. ~ ERNESTO D. ACOSTA Presiding Judge