CTA Case No. 3642 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TA X APPEALS QUEZON CITY BANK OF AMERICA NT & SA <Philippine Branch>, Pf.?.t i t l. Cll'"tf?t' ' ��� vet�� s u s ��� C.T.A. CASE NO. 3642 COMMISSIONER OF INTERNAL REVENUE, He s pondent. >< _, .... .... -- -- - ..... �- .... X D E C:: X0 N 'lhl. s ~~ee is a clai m for refund by petitioner <11ft1r.:�u n t; o::��f' 1:.:� 1~:::'J , 1:.30. 00 as E:\ J. 1 e g ed C.�V et�� pa i d i r�,c:c�r,,e computed as follo ws : Net Offshore Income P 21 17491528 X 15/3&5 X 5~ p 44,691.00 22,189,446.00 Gross Onshore Income P221,8941 457 x 10% 1, 774,466.00 All Others P510981474 K (25)(/35i<l P24,008,603.00 (22,189,446.00) Total Less: Tax assumed by onshore borrowers Net FCDU Tax Liability for 1981 p 1, 819,157.00 Deduct Quarterly pay~ents 1st Qt r. p 13,713.00 2nd Qtr. 275,507.00 3rd Qtr. 755,397.00 Total Payments P1 1044,617.00 21 548 1 895.00 Creditable Tax withheld on 1, 504,278.00 Government Securities p 729,738.00 R11fur�d1bl1 �mount for 1981 ============ 58 7

DECISION CTA CASE NO. 3642 - 2- Petitioner is a foreiqn banking corporation duly licensed to enqage in regul ar commercial business � in the Philippines. It is likewi se duly aut h orized by the Central Bank of the Philippines to operate an expanded Foreign Currency Presidential Decree No. 1035 and Central Bank Circ1.1lar 5'+7. Orr May 31' petitioner through its extet~ nal audit(;.r SGV &� Co., filed a fc�rmal claim to the Bureau of Internal Revenue and without waiting f o r respondent Commissioner's dec ision, petitioner filed on May 31, 1983 the instant petiti on f�:::-t~ r�' ev i ew t'egard i ng its 1 '::381 c J. a i nm fot~ refr.1nd amc��.mt ing tc� P7;:::9, 7 ~~8. 00. <E><h. VV, p. 105 - 107, CTA record s ) To:� date, t'es po::�ndent yet pe~itioner's claim for refund of the said amount of P7 29 , 738.00. Hence, this pet it iorr fot~ t' eview was instituted to interrupt the running of the two (2) year prescriptive period. The sole issue presented in this case is whether or not petitioner has in fact overpaid its income tax for the ta><able year 1981 . 58 0

DECISION CTA CASE NO. 3642 - 3- F r.:ot' the "t<:\\ ><able year l. 9fH, pet it iorHtor filed two s eparate cor pr.:orate inco me tax returns, one for its regular cr.:ommercial and another f o r it s Foreign Currency Deposit Unit <FCDU>. Petitioner filed the following i Y"ICC�Me taX its cr.:�mmerc i a 1 bar1H. i ng the pewiod er,dir�g March 31, 1'38:1. (E><h. f~, p. 5 '�, the perir.:od ending June 30, 1981 <Exh. D, p. 57, CTA rec. > the pet' ir.:od er,di. ng Septemb e t~ 30; 1'381 <Exh. G, p. 60, CTA rec. ) d) Arn���Ja 1 conso 1 i dated i. r.cr.:�rne tax ret urr� f ot' the yeat' 1'38:1. <E><h. J, p. 53, CTA r�e c. ). ur.der thi s t' eturr,, petiti.r.:�r�et' de c lared a net lr.:� s s ar.d therefore had a zero income tax liability. Li k.ewi se, pet it i r.:�r�er filed the followir�g income tax returns for its Foreign Currency Deposit Unit <FCDU) operation: a.) Fot' the first q�.tarter er.ded March 31, {' 580 )

DECI SION CTA CASE NO. 3642 - 4- 1981, petitioner filed its Quarterly Income Tax P13, 713 <E><h. f, p. Tl , CTf,) t'' ec .) . This-. ,"\ rl1f.:��.w,t was paid <::�n J�Jne 1 , l~.:JBL <Exhs. X artd Y, p. f.H , CTA b.) r: ot' � the f i r s t and secc�nd quar~ ters ended J 1.1 l''te 3(1 ! 1 ~JB 1 , petitioner f i l ed i t s cumulative z, Qua,~tet�ly IYtCC�rt1e Tax Retut� r�,s <Exh. p. 82, CTA rec::-. ) which showed a tax due in the amount of P275,507.00. This arnc�unt ~t-Jas paid on At..tqust 31, 1 981. <Exh s. DD and EE, p. BE,, CTA rec.) c.) Fot' the f i r s t , secor.d ar1d third quar~ters ended September 30, l9B1, petitione r filed its cumulative Quarterly Income Tax Return which a howed a tax due in the amount of P755, 397.00 . C:HI1ount wa~; paid em Decer11bet' 1, l. 981. <Exhs. JJ and KK, p. 91, CTA rec. > d.) Fc�t' the calend;:n� ended Decer11ber 31 , 1981, pe titic;or-,e t�' filed its fi.nal ac:l.justmP-nts i.r�,co:�me �b ax return on Foreign Currency Deposit Unit <FCDU>, which t�et ut� r�, tax liability of P1,B19, 157.00 <Exh. LL, p. 92 , CTA rec. >. Agair.st said tax 1 iabi lity, �the afot�'esa id quat'tet� ly tax payments aggregating P1,044,617 . 00 <Exh. LL, p. 92, CTA l�'' ec. ) p 1 u s the sum <:�f P 1, 50'+ , 278. 00 ( Ex hs. WW PP� 108�-115, CTA rec. > 59(}

DECISION CTA CASE NO. 3642 - 5- P729, 738. 00. examiner who investigated petitioner's claim fo r refuy�,d rendr:wed the fo l. 1r.:�w i r.g repc�rt: (Exh. LLL, p. >?.8 , BIR rae.). A rfict::�mp1.1tat ior' c�f ttH: i.r,cr.:�me tax withheld Oh ~cvernment & curities and taaed Qh the v rious BIA Forms 1743 Bubmittad, th total creditable amount st�1r.:o~Jlr.J t') _ Pl, '+50, 537. 5 <) inlStead c�f r1,504,27S.OO, or a d ff.rence of so. P5::1l~ -1'+(). The total eUI1C�I.ll",t ref�_mdable is th refore P675,997.50. However, re~pondent in his mamorandum contends that ttu~ arnour-rt of P75~, 397.00 o:\S alleged payment fo t" the third qu~rter CExhs. J J and I~K) was not a ct�Ja l ly by the pet" certification of the Revenue Accounting Division of the nurea�J of lnt;r,H�r,Wil. Reve?nue (p. 95 BIR t"ec.). This c 1aim �::.f responder��t is �.mt er�.ab l. e. The said cert if 1. c�~t ion merely that the f~ever�rue requested fO'r" verific::atio::on, C. R. No. dated Dece r11bf.?.'r' 1, 1'381 fot" P755, 397. (H). It did Yrr.:�t state that the BIR did not ~ctually receive the payment . Said certification could simpl y imply that the said 591

DECISION CTA CASE NO . 364 2 -6 11 o:�\ \/ P So;"\ i d COl' I f i l fr'lro\ t; :i. ()l' l l ' PC'f:? :i. p ~; . f..'""� yrnE~nt COIJ] cl f'l o':'I VP. !::>Pe n act r..t i:':\ .1. .I y l ' f"�'Cf" i Vf�? d r ,:'(l ,l.f. t i. 1''1 t '' f"!L' Ot'' l .linq !::>y!'>tf�~ fr'l C�f \�, flF�' f.:!Jf~. 1-- e~; pc�n t�ff'"nt th."''t o"'' ffl () l .( )"r1'; t t h P. t ' P i l..l 'r"ld <::j() l .l r:Ji l hy pF~ t; i t i C:<l"'FJ t ' � !"> U~ > rn :i. L\;r:-~ tJ hy p!'-� l; j l: 1c�nn 1��� and i r �1stP.a d ~�; ltt'J rn itte d t t 1is T t�1�? G�~ � v !"l ' l''lfr'lf�? l' l t; rn 1..1 ~; t lII (.1 j. ll" ' �.::OVt: ~ LI1P yeo�\ 1 .r, I I V �: � .I �tf:.~l.. l , .;;:. f I .i. t : J ��~ .1. 1� r �< : I"' j f1 t !�; i ,..;.1� i t "~ .I r 1t.� ,_,1,1 !'? I; a>< p �"' y !'1 1f.' r 1t: ' ; � f\ fo f : �. �11l. 1 ' �.. �V t��'l .l. l i i,J PV i�l� �' lll P l�J<I ''; pl P"�>P rr L f�.-~d l.1y 11 ~!"' ~1':-' r l dr>t o L l:u tl .i.��� tll'�.. �VU 1 ,1 1~�~ P H:i.r; l: <�'?l' �"�: e �.�� { tl'le of 'l t: i,"'!l l 'Pr:: Pipt s i l.l/3/i / ft�C, o�:l II ( I t...J .< L:� ..o11 f .L 1 rlli �l L .i. �..ol'1 ne c r<" i.j ll i\l(.:t" J '. Jl.\.1. !"; l' t O:. �W ll' 1 ~j ,:�,1(.~ \, 1.\ i.r.l p .co~y roJPl' l \; oi' o:;'l:i:\lf.�[l 2:\bove , 1 �n ~�� t .J u r 11�If:~ l' 1 l r.:; u b m i t; t e c:l l; 11). ~:; c: a s e t o:r t � t t1 e p.l.r.;-a cl :i t� lrl '' <�IY 1t l l; h e 59 ~

DECISION CTA CASE NO. 3642 - 7- tt�uth c�f his allegat].c�n s, r�l'JSt be �Jndt!!t�� sto:�r.::�r.1 t �:=t h ave i':\dmittf.~d he tt� ut:h o::�f all the rnat et�ia l and t' e 1 e v ,:'\ y ,t a 1 l e g at i o n ~; t r:~ k f.:? n t o g e t h e t' w i t h ~; u c h o f hi s own as o!i\t''e ,:,\dr,1itt!;?d" <Bauermann vs. Casas, 10 Phil. 386; Evangelista vs. De la Rosa, et. al., 76 Phi 1. 115> . its claim fot' r�ef und. More so when the evidences pt�esent ec:l which 1-'H?t'e r�..: �t d i sp �.1t ed by respondent, s uffici ently established pet i t io:�r�,en'' f..:; t��ight to the <Commonwealth Man.'lgement and Service Corporation vs. Commissioner o'f Internal Revenue, CTA Case No. 3232, June 26, 1985). The circumstances obt�aining in the case at bar co:�rnpe 1 s to s u ~; t a i. y�, the t el"tab i 1 it y of evidence and pleadings <Dataprep [Phils.J, Inc., vs. BIR , CTA Case NO. 3600, March 30, 19 84) . Ho::�wever, t E! X t:\ ftl i Y'l i:\ i. 0 Y'l of the exhibits presented on taxes withheld o n government Bar�,l<. <p. '30 , BIH rec. ), i t was fo1.md ou t that t he a mo unt is eonly P1, 50 1,162 . 50 , siYrce a ta><p.3ye t� can clairn fot' a t' eful"rd only s.:::� rr1 uch as i t can pro::�ve, pet i t i f.:on~y� is entitlnd t h e SlHrl �:=tf P726,632.50 out of the total c l aim of P 7 2'3 ,738.00. 59~

DECISION CTA CASE NO. 3642 - 8- WHEREFORE , respondent Commissioner of Internal credit in the amount of P726,632.50 to pet i tioner Bank of America NT & SA re p resenting overpai d in~ome ta x for t h e taxable year 1981. Without pronouncement as to costs. SO ORDERED. Quezon City, Metro Manila, December 27, 1991. ~~Q. ~ ERNESTO D. ACOSTA Assc�c i ate J�.td ge I CUNCUR: CONS R sc�c ]. ate Judge CE RT I F I CAT I 0 N I hereby certify that this decision was reached after due consultation between the members Section 13, Article VIII of t he Constituti on. ROAG!UIN Judr.~e Rppeals 594