CTA Case No. 4018 (Decision)

.11Ti Pr!RT, r c 01' 1�f"' PI'.IT. 1P PTN Et: COlll/1' C.F 1~"1 K AP PEALS (fJUEFO . CITY THE PJJILIPPINE AHERICIJN LIFE INSllRANCE COIIPANY, Pet./ tl nner, - ve.n ::u tt - C.T.A . CASE NO. 4018 COMJJIBSJONER OF I NT.lf l1'NA.L BEVENCTE, x - - - -� Re spon.i, ~n t . - �- -. �- - -- }{ D E C: 1 S I 0 N This case~ i JJvol vn> <1 c l .-oJloJ for z:eftmd of tax and <311dfng tf..1 tall ing P3, 858 , 7f.7 . 00 . not disput t~d . existing tmde1� Pbilipp.ine l ~':tr~e, r-ri t lJ Pl'iJJclpal office ~<t t the PlJ.ilan;l.ff ��"� PuU d lng, United Nati<.:>JJS A vem1e , E'rml t a , !1tw.i.l1 . co.rpo1�a te i11c ome t ::t.'\1 .f,_l f' the Clfl enda1� yea1� 1983 .'.70J i.:wn ting to P~1. 2 46 , 141 . 00 ( Ex hibits A, B and C) . For the Becond q u art:t..,r <' 7 1,983, 1 t paid the Bu1�eau

DECISION - CTA CIJS./i.' NO _ 40.U I P396,874 . 00 on Augus t 2:'. 1983 (Exhibits D, E , and F) . Fo.r tbe tl.11nt q(' ~p �t,�H' of 1983, p et itioJJel' d eclal'ed a net t Bxab 7e f n " ~'-"'-'D..'e of P2 . 515, 671. 00 a11d a mo 11n f; ,_..,r .r � 'I� tf (' 4 0 0. / fter c rediting , .. i� ~ ' .~::;. (10 /.1 f d ec h1.red ~"1 r e flwdah le tl '1~�:l tmt o.f r':'. f'i'~. ('6' 1 . on (l' :d1 l.bi t-. G). Fo r� Dece mber 31, 1 Htf:3 . p�~t.i f:ic ner Bilft.='ered a loss a11d l'efund t:ot;a.ll l ng P3,P.C1 t, 8 41 . 00 0 <3 . �; dlcat~d ln the income tax �.� [ P3 . 2 4 6, 141 . 0 0 aJJd P3.96 , 874 . 0 0, P215,742 .00 as ln 1 984, petl t.i c �nt'; l ' <Jr;a iJ1 su.ffel'ed a loss and .incott -:"" tu 1 i ab.i.U t .v . Hor~eve.r, petlt .ioJJt'"l' appll<t::~ d .:u� .1 LT.\' eredJ.t fo1 � 1984, the 1 982 OW' l'paid iJJ COP.It' mut P250, 8t't7 . 00 as withholding tax 0 11 !'enta l iJJcome fo1� 1884, or ._., total of .F'4, 242 . 708. 0 0 COl'P01'8 te iJJCOJ�e tax \ refundable fo1� 1984 (Exhibit I ). J ,q8 4 , petitioner filed a fnr r efnnd r esp ondent � s Appellate

JJECTSJON CTA C:tJ. f :Ji FO . .f fJ f{7 D.i v.is.ion fo.1� .i ts 1 [16 2 i 111 ome r e.fund of P133 ,084 . 00 . 1 .C!84 , P �~f; Jt .i oJJ tH' f.i .l ~>d r.r'[f)J t h i B Co urt a petltloJJ for r<?!V.i c:!rv (C. T.A. Ca::::e fl!,; _ ,"1868) with respect to lt:s .Jf/82 c.laJ111 :Fo r n : rw:- 1 . . f l'1 33, 084.00. c.J :'!In; _[ �)J' c omputed as f ollor,;s I F.Yhi.hil-.t:>. ~T a nd ~T-1) : 198.2 i1 1�::�r.lm r? L:r Y t�e f �nv f; � '>T,p ap ,n .l ie d 1 s t -Y <:: '""' d � i p 1 33 .~ ()84.00 198.3 .i ncome t a) ,.. ; 1''!1) i; '� r,. �1pr- l fe�1 "1:'~ f� ;�y �: ,, In' F='.Q-1 t ;~ )( r::r p rj i ~� un ' r" 1 i '" in -: �ome ~. ~ k k k � � � � ,� � � � � 250 .� 867.00 Total � � � � � � . � � � � � � � � � � P 4 .� 242.~ 700. c:x:> l.e :::.-: ~ 1 ''11;17 �: lt'l.im f �w /' r' (U''I d already 'filed Nith the BIR and the CTA (Cas e N(:>. 3868) . .. 1t ,. �,.., .. ... ,. �� ----�-- -- - : :::= ==:-:::.~ :::.:-::======-= petlt.iolltH' filed the .iJut,-wt 1-"'e t:.ttl on for h :nrJew em ,TaJwa.l'.V 2, 1986 1�egardlng .its 1t183 ..~m:f 198 4 el..-:i lms foz� z�efwuf amow1 tl11g to P~1 . J 01-7, 624 . 00. Afte1� a11 answer lJ~'"~~~ h:oen :flied by .respoJJdeJJt, pet.itlonez� maJLifen te:d t !:qf; .tt .fl.Zed wltlJ the Buz�elw

DECISION - CTA CASE NO ; 4018 -- 4 - Ap .r l l 15 , 1986 . f'2 , 4 f. 7 , J: 5 . 0 (} ~~ q fl _i ' ' 'I 1 'J 1 tax .. G r.rl thhe.ld 011 ,. to Pt), 709 . 8:1:1 . 00 ( T 4 . 7 42 . iO t t .tVI p l 1s P2 ,467, 1 25.00) [Exhibit K] . Cl'edi tlllB 1 ts Pl'.f o.1� y ear L~ x 7ess tax credl t of P2, 7.17, 9P2 . 00 J'eJ)l''i..~t..::en t:1 r u~ 11?94 r,rj tlJlJ<:'l dlng taxes on '' 1 1984 -� P2, 4f: 7, 12 5 . 0 0 ..; I ) ' (','7 1 ~" anJencfmen t of . ( 19 8 !) 1 TJ~ I P. . ' t "..�'.' ,�:I (l ' �:� ' ) petl f;J � ':184 c <:~ l fl-:H �a t e lnc<:>me tax .returJJ a11d r "' ' tlu'! app_lJ<."! a tloJJ ,:f .if: -,;; JPB4 wltllholdlJJg taxes on Ha.v :w, 198B , 1 t s petit .i em for rev i e~ r.r i n orde.1� to eoJJfo.r�m to t/Je evidence p.rest.wted cb."'lnglng 1 ts o .rig.tnal c~'luse of action . Wltbout any ob.fecti oJJ f.r�om J'espc.mdeJJt tbe The .'.iJJJeJJded p e t: J t; .t <�n new l.ioJl ts p e t.t t i oJJeJ' ~ s elaim fOJ' l'efWld td P :J .� 8 fo8 , 757 . 00 r epreseJJtlJJg 3Rh

DECISION -- CTA CASE NO . 40Jfl to its 11:84 iJ.JCOJJJe t.-:1 ."{ 1 �..~1;prn, computed a s [ollorls: Calendar Year B2 2 6~?:JT7 P3~246 1 1 41.00 f n9.ir.�:tJ...L?:::J.l.~::J B19:Jt1178 396,874.00 First� Ouartf:r Second (luarter 1983 f..l ithholdi nq Tt~ .'�e . :� ��m r.<?n t- .~ 7 215_, 742 ~0<) � 3.R5H , 7.57 -~'0 based 011 the~ pl <.~adi.n,q. .s 'I n d tlk~ e r,r1 dt~nce p res em ted by pe t;i ti oJJ t:"1�. is en t:i tl ed t o tlJe l'e fun d f! ougfl t . and affirmative 7_7 f~lf'l!...,U1 t�h�r a r �. ~.:~~~ (r:,71 .(1 i=',.:-�{1 ~I -~ .r .f te f } nn'� f {J. ; f ~)a ynJ< '.11 t n .1JJ .:1de c.r: N. ~ �. '',ti 1 '' !J3 .:"tlld Ar;gu::~t 2 f?, 1983 , r espect.i ve .Z.v , Ju~V<:'! <'t ..lre"'d,v pr-..~ecrlbe d J:..'~tu�suaJJ t to the c:fa te of fi11al pa.vmt:'ll t , 1. ~. the l ast qua~�te1� fiD .<. tll.v llsce.t�taln able t h at t be taxp a.ve1� ei tlJer JJJade 3R7

orr Ofi:(.~l f.; 1 C.T'/1 CJJ:3F NO~ 4 01 tJ OJ' l oses ln lts business opez�,:~ t l on . ( Commisn.iorter o.f Internal Revenue v. Asia Australia l.td. , represented by Soriamon t; S t E"mnnhJ p f\.~� ne tea. Inc. , and Court of T ax Appeala, G.n. Nc�. n ! fl~� G , April lO , 198H , clt. ing Co] leeto r of In t. ern n l fk~vnnuc v. Pr let , 2 SCRA 1 007 ; Commi tls ioner or. I nt-.crr1 al Revenue v . Pnlanca, Jr ., 18 SCRA 496) . Pet_itloJJ r.u: � �:: f. fi 1 11 inc� cm ~3. tllX .retun1 fo1� 1983 was flle d on April .f(: , t(;t4 (r1p.rll 1!5, 1984 belng a S rm d �u.� l . rt t .-:; ( .' r d.:1t t~ (Aprll 16 , 1t.?84) . :~.7' l .f '1J .i f",L '�~ ( �, 1 ., , ' . Th � ~re.t:o.re, file his c l a im J'i..u� n � t tw d. ImJJJt.H'U at ~:JlY tb -~re aft<t:��r. p:��t:l t l cm e r f l l e d a Ir"etltloJJ f Ol' J'evler.,r ('JJ] .Tanll8 r�:r ..? . 1 986 . Clea1�ly, the flJ�st and J3!~~~�oJJd �i U .i ." ft:' l 'B of 1983 luJve not .vet Pl'l..":! scri b e d. Respondent f ur ther �r:.1.in talns tba t pe tl tloJJe.t� need not flle tlu~ }JH.~ t-.- w t petl tlon .fo1� .t�evlew fo.t�

v!fc rs.ro rv -- erA Cll f'"f;; NO. 401 8 UH" <'.f L' _i 1 (:o de. .T.<J..'\: C'..:>de r.rl thin .10 .vea.z�s t JU" C.i t:.vt.z�ust BaJJk.i11g T::~J, ln g C ll C' falls wn1er th e p1�ov.iBJou of now S e ction 2 30 (tlJeJJ ils emph .u:;Jzed f: ' f' t- : t 7 of J 1 .l eg.:~ l } :v s tan d ing .'.iJon e .i s not: ,. .--. n t- ro l .llng No . 409�! , N.�. u� 28 , 19P1 J I11t:~rn aJ '' ' � j '�I JlJt~ C:ode, as pel'tJneJJt , provi de:::-r : . ,� J i / , J ,� ;; I .i :: ..:> r a l ;lf: .1-ln~od ('1 ')"' r �l' P I'�:' CI'l" t!.i '1' ,.. ,,� ,�t _. 'l / .1 1 JJ, =ti;!C .fJ (J] , ., . ,. ,. ; _f,; J� ~ }1,� --. i 'l t"~ rn.9.1 ' ' ''~' ' '-' �1( ' r� .,} _r e,-;-:�� d t:o h<lt .~'l' h~eo ~�� 1 �. 1 ��<� 1 J l.t �.: r ll l t~ga ll:v as::-~1-"~:,ed c� r . -~ �~ .Jl.-:'c ' : , f , (.!' t~ d JJ.V peJJalt.v c .l a lmed to 11 <1 r.�,�. t " �r < ol Z~::� c'7f- �?. d r.;-1 thout au t:h o l'�l t:.v . .<:>..r ..... oL .. ' ' 11!� S !lm ... i1l.l, f.~1rc1d .... t o . ba v.t~ be-.~11. ....._..e:�Jt.7:.enr.t.?..f..Y.<�'! �� � fn :r ;1y Inann �~""r r.;ro n g .fcJl .l y col le�c t ��� i . unt-.i1 ,:: -:.::l aio1 f,_-:cr refun d o r cred .i f: )1.: ;:-� l�f"�efJ d tJ l y fl.l ed r.:'i th th e C:oJJ:tJJJi ss.i("lJJr.~r ; l'ut s w ..?b suit o.z� P l'o ceedlng .ma:v b e ma fnt a ined, wlJetlle..r c.H' not such tax, peJJ.<:;..l t .v , or s un1 has bee11 p.~i d undt:"H' p.ro t e�s t c-.r du r�ess . Jn <'illY ' 'd I'"<' . 1 ("~ rr:uc�h suit c.u� prc~ cet:. d.i ng ~'h�ll ; r.,. , l �f3.{! ' ll' afte.l' th e exp.i.ra t l on ( "lf t Vi' .' ? , �. ' .f�� ."'JJt tlJe d ti tt~ of

DECIS.ION CTA CASE Nf . 4018 r � l.T ,,~ .� n ~ '� 1� r� ~ r; I , . .1 ,. .. \~r n l'" ..1} e (\ t~ �:'1" .''!JJ' �:::n�. r � ��t;>' t�TJnl nh1 !' ar f~,. n ./'t !" 7� p .:>,~ l"r � 1' � r I< !":..~d, h o r,r�," Vt"!J', t l1 a t: the C.- >JJWJL ~l� i ul� r ,,., ,. , eve.Jl wl tb out: a T<~l'i t ten <..' J .-~J m n, ~~ 1 t-, ! ' . .reftm d o1� c.redl t -'Ht y f cL'f, r�bnl'f' . ��n � �� t' <-' f t.lJ <':' ret urn llPOJJ r�h.fcll J:<l .'!!l<'l.l( r..�,~ � ,,..,.H7~l , sucb payment a,r'] �~.lll � �: /-, >,IJ'}.r 'f,: 1.1.111(' b(~t"fll t?t'l't.:)]JC'!O llSly [-VIi �i ~: .'( .'c XXJ< . tf: the afo.l'eel ted p os l t .i ve ma11da tc.� o J (C.ltytrust Bank .ing Corporntto l v . Co mJs fl J on <C~r of [nternal Revenue , sup r a.) Respondent s t:reseed petl tloJJeJ' 's t b;9t it .� "r. ��., , �~d .'1 .lt.:'S tJ d oes JJot i ps o been Pl'l i d eJ.J t l tl eme11 t t c.1 the r~bmd H('U�fh t; . f'e t .l tione1� must

DECISION -- CTA C!rSF. NO, 40J8 unde.r Sect i ons 292 and :>gf. of the NB tlonal I n ternal f'(' 1(" ( { t ' to the .r ecove.r.v of eJTOJ.teously OJ' ..i ll~&~P} 7,, C�> llected t..<txes. pe t l t .i <.mer r;j U1 the sta tu tory: ..~. r.;Tl tte11 claim for re-fw1d f;ri tb the z�espondeJJ t a11d ,q suit (pet l t l cm .f',:lr J �� t� t .er.r) r.;Jt:JJ tl1l s Co u.z�t 011 JaJJUal'.V 2, 198ti 1 :; r.rl t lJ JJJ t lle tr.ro- y ea.t� prc .C<'J" ip t .f vl' p c�rf..) ,f 1 b.v s~:� �,t .i, '11 .-:�.c;.;� I ts prec..:nt: ~ t l �: �n of var.ious documentaJ'.V : , '::r:-; f"t."'! tarns ( Exhibits f!., , Il , G , ll , H - l t �) f I J '� t u l -- 7 , and K) .: the orders for 1JJ C ( 'DI �~ i. L1 <~ � paid for the f i r s t a11d second quaz�te1�s <."'If D.-J8:J (li::<hibit.s B, C, E , and F); a11d t'olumlJl<>tUI lDV<>lc"s MJd l'<>u oher s showing lts / / expensefJ paid and f.n , ~ u ITf>d for the yea1� 1983 39 .1

/JF.CJt'TOl' e r A r"AS'fi' NO. 1tiJ i1 AA to f' Y . j ll �~� 111 f! .I �: . l '� � ~ � a .ll es t a bl ished the r,r<-"1 ::r 1 '�."' �o J '.,~, fer1 t t.> turn to presen t !H f .:d l ~..�d t ,., 1 r �:!sen t any docume11 t a.ry o.r t. cs f; iJIJ(.\1l fa .1 evi dent~f'� fu cas e. Instead he op t ed t �) pot-::: f;pone th e hearings fo1� ( : T. ~- . [ o r .-:f-t' t. ' ..i ::dc� n t 'l l. h: 1: 1 � 1 ,-. � \ f the .l'':!!cord:...~ arJ�t t he Respon d ent; .n . r p e ti t ioner 's J ne �'Wt' retur n d <.'l t e. A.l t lwc ;g b r ...sJ. otl<'en t: the 1�ell1 t.i ve to tbe a IJ c 1 � ! '� t- r t; l e�d cas e, the s ame was ,, \ ''J���� �.:.-�, _,, J. .t-~: ; � ' ...., due: l . , 1�, �nrc ,(, �'' ~ t- � �� .! 1 i i ' r econh'.t to til ~;.~ C�: ;ur t: (t"~ -, C'J (h J' oC t h e Cour t datetf .lu l .v 21, 19t70) . h is .reV>!H1U t1 1J1tt:~l.l fg . /1(' (~ C�f i' 1 Cel".t": a11d s peci a l J.n ves t.J.ga tor mere l;v t h at P.l'oposed � 1 �' t t:ret~ l1".:':11k'1'8 Jldam l e t t e r �7 FUR n"� ~. } , 3~?

rr T.F1~1.'' � ~1 C1'11 ell.' r.f NO_ tf (J I {l �i' ! � t t may be necessar.v to Pn �'� ' � " '' ( ''" c� x r ~� et;ed, U 1o r:� f ,�- n�: ,f ,- :, +-ft e /J.;:,:C~ _t ��: � � t i r1 , J:i 1 '��,1 . f i r:; r 1 I � _ . f :� 1 .~ r; f ,-l1":t''.i fa r.t t cf' ill;, p;u �ti "':f '�'t! . , ':; n e1 (;her p rovokes <:111.V 1rn � :~:..,t:t Lin;;; qu~-~. ; 1 '� J"Ji1' 11 01~ involves " ' ~ -' .:� ,. f t'l.l [;rc t-n."d r.-:.r :ru e gen ulJJel.v 111 ,q ' l' 'ir,~. ] 'J �' ,-, ~;11, � J ;:f;r�p tjr.re maclJ1JJel'J' OJ' J't' �o::::.!n s:r e mpJ ,:.->.l-'��"d nn the .rlglJt to tl;e e.l : ilm t.rec~.ms t.c� h .'H'e. moved bar<..=d y at ldllng spe ed. To b-:.~ .relatJve .ly q11leseen t [or some four ( 4 1 V-?.<1.n:r on .<1 <.:?1 t:: inJ o.:f I~U� ' h ,., .t .fli' ,"" ., ''td f:U J"(.'! :~Wd 110 t SO .-:�,-,.,.~ fi'\-"�,;1� 7 ' t -' ;.{-e'! F{]L fch 110 .longe � frJ� �� it:cs '�>t.,t-n�~�.�r s ��� trc�r e xett-.:�tJ a l:}lli':i..:;s.v �'l'�~-ner"! .>.( �'!.�-;r:,� .- ':: ' t -1:1. cr.: af:<"�s bt:f: an tJJJ::a.rran t ...-13 l, � ~ 1 ;I !r.,1 Li e in er�t .ia \_..f ftLt.:..:f.}<.1il , fi'f�- .: (fi_ .~r.' ~1 ] eg41_l r_' �: "'�Jr-.'i�J,.: fc,: l C.:1 11 s.1 f<1)J' be r���n < !; ~- d . Pr~ ':ft.~ � �J.lt." r� '� ,. ,1 n r� st;ni l a r .l y c.ircr ;r;:�F t �1� 1 �,'! ,f tnxr-. 1.1' �'�1' to1 U1at ma t t e 1' d e.B e. .t"V~~J:: ,1 m�: ,., �-{ t J J't'" o[ f..:-'Li 1' c.1t" tL. J n g .111 a JJJ ( "!l't' n t ~~- �~ p�>.d 1 , ... and cc�mpe t ,..,n t l .v re t~pontU v�e aot:.J(��n . .. ( Co rt' f!:'IOHHCd J tl1 Pa --.j_fic Consultants , f , t d. , -, 'l'h-e Co mmisn.ione.r of Int:ern a l Ti e-ve~w��~. '~ T . . C;:-u:~e No. 2853, t�l ay 15, Hl8 ~: l 1 r'l f 1 h:' 1 c�� �I f'llll� "� .7 ding 1-i"f ..'\(~"!f" 0/J ,, .; ~ f �'� l j :). ..,.),,:' .. 1 " r:>e� t f t� }.-�1}(' 1" t".'ii l ,-.d t c� .. r . 1' l't' ,., ,. �, ,~ z� ,., ��of' ' f .. f 'i 71 I ' ~ '� 1': ' ;> !' (!} In �: '( :� m .::~ (BJR Sec tl 011 1 0 �I 1 3-78 (as ameJJded by .i t: i�'J shown on the r e t u ~ �n tl 'f1. t; _.tlle.. ..iJJJJ.J.?../lJ.e_ IUIYliJ.fUll

JJECIBTON - CTA CASE NO . 4018 l ' 1. , , , .ri'�:J l J.... ;.;;J;u..?.f:l.iJJg__.. tlu~...... aDJ.<.:>.Wl. t lf' !'c r � t i ' n <'-' � l7 , ..,,. ' IFI ( '�� t r: 1: ' J ' ., 1c rua l J.r� been .1 1t> wl tlllJoldi JJg r-1 f thh ~') d t HUi p,;; i .-:f hy ~lf ���r I�� l' tHl t:al J.ncome r..r:i s J '(~�}eJ n:: d less wi tl1bolding t a Xt':S. Proper p n.Jc>f of th.i s:; wo u l d bt'! tbe cJf_flcltd receipts of p ('�f; i t. k .'k''.f' f � r ::�u-�:-~ ' ':. �� 1 r:~ ten an t:s refle c ting the i f.s L.:�.n an t s. COJJ CI21'JJed. c. c! _ln J m ro.r refund o.r F:1, ;: 1(;, .l ' .1 (1(} .md PS f~(i . W l r1 0 co.r pora t:e inc,, t!J{! t. .;r twco11d q TTa .rte.r"i:r: cf 1.983 , re:uri, Hctl vf.:~ _ly, <:>r a total Acco~�dingly.

VEC.T S T O N CTA CASK NO . 401 8 b P..reby o r d ered t;o n~rm:; .-f t.o PeLf tlc.,_ner Philippine t1 mer_ican Lf.re ]tWIIr:rn �!~ -� r�, , .� , ,,, ,,. til e? f;ota l 8-BOUIJt o f � r ::: 0 r I .'i -� ;' /( '? . (!(I "' : ; l I I ' r p ,1 J'IP( .Jl f r,r I 1 r a--:>f;ual ~i thlJoldlJJg and 1i I11tcrnal Revenue. No ~- RITE. Preed rflng Jud . � ~~~ . a ERNESTO .lJ. ACOBTA Assocla te ,Judge

JW(: 7. .� I fV ' CT!f. Cl' ~ ~!� !~'(!. �1 '' fr ' j ( '-!:' I � (, ,�, . I }� ,~ f t h j JJ t he membe1�s of ....... , r , ��'.1 r�'' ' ~ ( f. .,', ' r.rl tlJ (' ~-� /1'' I ~ 1 :' � 1 i I� J '