AGM PACKAGING SYSTEM LTD. CORP. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY E NBANC AGM PACKAGING SYSTEM LTD. CTA E B N0. 1734 CORP., (CT i\ Case No. 8947) P etitio ner, - versus- COMMISSIONER OF INTERNAL REVENUE, Respondent. X- -- - - - - - - - - - - - - - - - - - - - - - - - X COMMISSIONER OF INTERNAL CTA EB NO. 1739 REVENUE, (CTA Case No. 8947) Petitioner, Present: DEL ROSARIO, P.j., CASTANEDA, JR., UY, -versus- FABON-VICTORINO, M I N D A R O - G RU LL A, RINGPIS-LIBAN, MANAHAN, BACORRO-VILLENA, and MODE ST O-SAN PE DRO, .Jl. AGM PACKAGING SYSTEM LTD. CORP., P r o m ulga ted : Respondent. 0CT1 1 2019 ~3.�<-..r/.-'hr c:;['!_-- --- L - - - -~ X- -- - - - - - - ----- --- - - - - - - - - - - - ------ ---- -- - RESOLUTION RINGPIS-LIBAN, .L: /

RESOLUTION CTA EB Nos. 1734 and 1739 (CTA Case No. 8947) This resolves the "Motion for Reconsideration (Re: Decision promulgated 29 March 2019)"1 ("Motion for Reconsideration") filed by the Commissioner of Internal Revenue ("CIR") on April 15, 2019 via registered mail, without comment from AGM Packaging System Ltd. Corp} seeking for the partial reconsideration of the Decision3 promulgated on March 29, 2019 ("assailed Decision"). The dispositive portion of the Assailed Decision reads: "WHEREFORE, premises considered, the Court DENIES the instant Petitions for lack of merit. The Decision dated June 09, 2017 and the Resolution dated October 20, 2017 of the Second Division in CTA Case No. 8947 are AFFIRMED with MODIFICATION in the computation of the deficiency interest and delinquency interests in view of the effectivity of Republic Act No. 10963 ("TRAIN Law")4 on January 01,2018 and the issuance ofRR No. 21-20185 dated September 14, 2018. The assessment issued by CIR against AGM for taxable year 2009 covering deficiency income tax, V1\T, EWf, IAET and DST is UPHELD. Accordingly, AGM Packaging System Ltd. Corp. is ORDERED TO PAY NINE MILLION FOUR HUNDRED NINETY-FIVE THOUSAND THREE HUNDRED NINETY TWO AND 14/100 PESOS (Php9,495,392.14) representtng deficiency taxes for taxable year 2009, inclusive of twenty-five percent (25%) surcharge imposed under Section 248(A)(3) of the Tax Code, as amended, and twenty percent (20%) deficiency interest and 20% delinquency interest imposed under Section 249(A) and (B), respectively, of the same Code, computed until December 31, 2017, which is prior to its amendment under the TRAIN Law, thus: Basic Tax Due IT VAT EWT IAET DST TOTAL .\dd' 25% Surcharge 20% Deficiency Interest Php424,026.41 Php128,838.72 Php 17,802.03 Php I ,822,470.28 Php778.50 Php2,393,9!5.94 from April16, 2010 to 106,006.60 32,209.68 4,450.51 455,617.57 194.63 598,478.99 November 17, 2014 Rollo, pp. 245-254. 2 !d., Records Verification Report dated September 13, 2019, p. 275. 3 !d., pp. 217-240. 4 An Act Amending Sections 5, 6, 24, 25, 27, 31, 32, 33, 34, 51, 52, 56, 57, 58, 74, 79, 84, 86, 90, 91, 97, 99, 100, 101, 106, 107, 108, 109, 110, 112, 114, 116, 127, 128, 129, 145, 148, 149, 151, 155, 171, 174, 175, 177, 178, 179, 180, 181, 182, 183, 186, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 232, 236, 237, 249, 254, 264, 269, and 288; Creating New Sections 51-A, 148-A, 150-A, 150-B, 237-A, 264-A, 264-B, and 265-A; and Repealing Sections 35, 62, And 89; All Under Republic Act No. 8424, Otherwise Known as the National Internal Revenue Code of 1997, as Amended, and for Other Purposes. Regulations Implementing Section 249 (Interest) of the National Internal Revenue Code (NIRC) of 1997, as amended under Section 75 of the Republic Act (RA) No. I 0963 or the "Tax Reform for Acceleration and Inclusion (TRAIN Law)"

RESOLUTION CTA EB Nos. 1734 and 1739 (CTA Case No. 8947) {Php424,()26,4/ X 20% X 389,639.61 124,038.15 17,236.27 1,400,056.62 758.02 389,639.61 16771365 davsl Php39,488.80 Php3,678,144.47 Php1,731.15 2(1% Deficiency Interest Php919,672.62 Php285,086.55 124,038.15 from January 26,2010 264,871.29 80,480.08 11,120.17 1,138,419.79 486.30 to November 17, 2014 574,480.43 17,236.27 1 /Php/28,838.72 X 20% x 178,081.46 24,666.98 2,297,580.66 1,1181.38 17571365 davsl Php1,759,024.35 Php543,648.10 Php75,275.96 Php7,114,144,92 Php3,298.82 1,400,056.62 zoo;;] Deficiency Interest from January 16,2010 758.02 to November 17,2014 Php4,924,123.60 ;Php/7,802.03 x 20% x 264,871.29 1767I 365 days/ 811,-180.08 11,120.17 20% Deficiency Interest from january 16,2011 1,138,419.79 to November 17, 2014 486.30 {Php/,822,470.28 X 20% x 14021365 davsl I 20% Deficiency Interest from January 06, 2010 :174,480.43 to November 17, 2014 178,081.4(, /Php778.50 X 20% x 24,666.98 .1777I 365 days/ 2,297,580.66 Total Amount Due, 1,08138 November 17, 20146 Add: 20% Deficiency I Php9,495,392. 14 Interest from November 18, 2014 to December 31, 2017 ;Php424,026.4/ X 20% X 11401365 davs7 f/'hp128,8J8.12 X 20% X 11401365 davs! iP/Jp17,802.03 x 20% .Y 11401365 da.,} ;Php/.822,470.28 x 20% x 11401365 days! !Php778.50 X 20% x 11401365 days! Z0�1i1 Delinquency Interest from November 18, 2014 to December 31, 2017 /Php919,672.62 X 20% X 11401365 days I {Pbp285,086.55 X 20% X I 1401365 days I [Php39,-!88.80 x 20% x 11401365 da)'si {Php3,678,1-14.47 x 20% x 11401365 daJ>S! [Php1,731.15 X 20% x 11-10/365 davs I Total Amount Due, December 31, 2017 In addition, AGM Packaging System Ltd. Corp. is ORDERED TO PAY delinquency interest at the rate of twelve percent (12%), which is double the legal interest rate for loans or forbearance of any money, on the total amount due as of November 17, 2014 in th~ 6 The FDDA stated that the tax liabilities should be paid immediately upon receipt. Docket, Exhibit "P- 15", pp. 685-688.

RESOLUTION erA EB Nos. 1734 and 1739 (erA Case No. 8947) amount of Php4,924,123.60, as determined above, computed from January 01, 2018 until full payment thereof pursuant to Section 249(C) of the Tax Code, as amended by TRAIN Law and implemented by RR No. 21-2018. SO ORDERED."' As basis for his prayer for partial reconsideration of the Assailed Decision, the CIR listed down the following reasons: 1) the disallowance of the interest income and foreign exchange loss is proper for failure by AGM Packaging System Ltd. Corp. to substantiate the same; 2) the imposition of deficiency income tax on the Net Operating Loss Carry-over (NOLCO) in the amount ofPhp620,420.63 was correct; and 3) the cancellation of the compromise penalty is improper. We resolve to deny the motion for lack of merit. After a careful consideration of the grounds raised in the motion, the Court finds that the issues and arguments raised therein had already been amply discussed, passed upon and considered by this Court in the Decision sought to be reconsidered. In fact, the CIR's motion for reconsideration is a mere replica of its Petition for Review with the Court En Bane. In the assailed Decision, we already pointed out that the issues raised by the CIR is rehashed from his arguments before the Court in Division, and have been sufficiently passed upon and resolved in the Decision and Resolution of the Court in Division8 Considering the fact that the CIR did not raise any new argument that would merit a reconsideration of the assailed Decision, the Court finds his motion for reconsideration bereft of merit. Finding no compelling reason to reconsider, modify or reverse the assailed Decision, We shall no longer belabor in this Resolution, to repeat the disquisitions and rulings made therei~ 7 Id., pp. 231-233. 8 !d., p. 224.

RESOLUTION CTA EB Nos. 1734 and 1739 (CTA case No. 8947) WHEREFORE, finding no cogent reason to reverse the Assailed Decision, the Commissioner oflnternal Revenue's "Motion for Reconsideration (Re: Decision promulgated 29 March 2019)" is DENIED for lack of merit. SO ORDERED. ~- ~ ' _x:l '--._� MA. BELEN M. RINGPIS-LIBAN Associate Justice WE CONCUR: (I reiterate my Concurring d Dissenting Opinion) ROMAN G. DEL ROSARIO Presiding Justice Qu..~-t;: C. ax-~~ I 9... ERL~.UY JR. j(JANITO C. CASTANEDA, Associate Justice Associate Justice ON-VICTORINO ~ N.Mr,.:~.G'~ (W'ith due respect, I join P]'s Conmm'ng and Dimnting Opinion) CIELITO N. MINDARO-GRULLA Associate Justice c~. 7- ~-�.,,A,4......--- cATHERINE T. MANAHAN Associate Justice