SONOMA SERVICES, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OFTAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION SONOMA SERVICES, INC., CTA Case No. 10272 Petitioner, Members: -versus - DEL ROSARIO, P.J., Chairperson, COMMISSIONER OF MANAHAN, and INTERNAL REVENUE, REYES-FAJARDO JL. Promulgated: Respondent. DECISION REYES-FAJARDO, J. : This Petition for Review filed on April 8, 2020 by petitioner Sonoma Services, Inc. against respondent Commissioner of Internal Revenue prays that judgment be rendered ordering respondent to refund or issue in favor of petitioner a tax credit certificate (TCC) in the amount of P5,437,000.00, representing petitioner's excess and unutilized creditable withholding taxes (CWTs) for the calendar year (CY) ended December 31,2017. PARTIES Petitioner Sonoma Services, Inc . is a domestic corporation, duly organized and existing under Philippine laws, with principal office at 3rd Floor, Makati Stock Exchan ge Building, Ayala Triangle, Ayala Avenue, Makati City.1 It was incorporated with the primary purpose of carrying on and conducting a gen eral services business with any party, including the rendering of management and other allied services within the limits allowed by law, including office and clerical Par. 1, Admitted Facts, Joint Stipulation of Facts and Issues GSFI), Docket- Vol. I, p. 428.

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner of Internal Revenue support services, maintenance services of any kind, or otherwise, to engage in any preservation, maintenance or repair work upon any and every kind of property, to enter into and execute contracts therefore or relating thereto.2 Respondent is the duly appointed Commissioner of Internal Revenue vested under the appropriate laws with the authority to carry out the functions, duties, and responsibilities of said Office, including inter alia, the power to decide, approve, and grant refunds and/or tax credits of overpaid and erroneously paid or collected internal revenue taxes.3 FACTS On December 2, 2019, petitioner filed with the Bureau of Internal Revenue (BIR) Revenue District Office (RDO) No. 50, an Application for Tax Credits I Refunds (BIR Form No. 1914), and a letter dated November 22, 2019,4 requesting for a refund of overpaid and unutilized CWTs for CY 2017, in the amount of :P5,437,000.00. Alleging inaction, petitioner filed a Petition for Review dated April6, 2020, on AprilS, 2020 before the Court,5 to which respondent filed an Answer on September 25, 2020.6 On September 28, 2020, respondent transmitted to the Court the BIR Records of this case.7 On January 19, 2021, Respondent's Pre-Trial Brief was filed;8 while on January 22, 2021, Petitioner's Pre-Trial Briefwas submitted.9 2 Par. 2, Admitted Facts, JSFI, Docket - Vol. I, p. 428. 3 Par. 3, Admitted Facts, JSFI, Docket- Vol. I, p. 429. 4 Exhibit "P-10," BIR Records, pp. 142 to 143. 5 Docket - Vol. I, pp. 12 to 22. 6 Docket - Vol. I, pp. 186 to 196. 7 Responden t's Compliance d ated Septem ber 28,2020, Docket - Vol. I, p p . 183 to 184. 8 Docket - Vol. I, pp. 206 to 208. 9 Docket- Vol. I, pp. 210 to 222.

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner ofInternal Revenue On January 28,2021, the Pre-Trial Conference was held wherein respondent manifested that he will not be presenting any evidence in this case.1o On February 15, 2021, the parties filed their Joint Stipulation of Facts and Issues,11 which was approved through Resolution dated February 24, 2021.12 On the basis thereof, the Court issued a Pre-Trial Order dated June 9, 2021.13 During the trial, petitioner presented: (1) Ms. Krystal E. Gamit,14 petitioner's Financial Accountant; and (2) Atty. Conrado M. Briones,1s the Court-commissioned Independent Certified Public Accountant (ICPA),16 as its witnesses. On October 11, 2021, the ICPA Report was submitted to the Court via electronic mail.17 On December 15, 2021, petitioner filed its Formal Offer of Evidence,18 to which respondent filed his Comment (to Petitioner's Formal Offer of Evidence) on February 21, 2022.19 By Resolution dated March 29, 2022,2� the Court admitted petitioner's offered exhibits, except for the following: 10 Notice of Pre-Trial Conference dated November 5, 2020, Docke t- Vol. I, pp. 199 to 201; Order dated January 28,2020, Docket- Vol. I, pp. 426 to 427. 11 Docket- Vol. I, pp. 428 to 434. 12 Docket - Vol. I, p. 445. 13 Docket- Vol. I, pp. 462 to 471. 14 Exhibit " P-17," Docket- Vol. I, pp. 226 to 239; Minutes of the hearing held on, and Order dated, November 25, 2021, Docket- Vol. I, pp. 598-A to 598-C, and Docket- Vol. II, pp. 599 to 600. 15 Exhibit "P-18," Docket- Vol. I, pp. 580 to 596; Minutes of the hearing held on, and Order dated, November 25, 2021, Docket- Vol. I, pp. 598-A to 598-C, and Docket- Vol. II, pp. 599 to 600. 16 Oath of C01nmission dated June 22, 2021, Docket - Vol. I, p. 476; Minutes of the hearing held on, and Order dated, June 22, 2021, Docket- Vol. I, pp. 473 to 475, and 447 to 478, respectively. 17 Exhibit " P-19," Docket- Vol. I, pp. 492 to 513. 18 Docket- Vol. II, pp. 601 to 621 19 Docket- Vol. II, pp. 841 to 843. 20 Docket- Vol. II, pp. 846 to 848.

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner ofInternal Revenue 1) Exhibits "P-33-1" and "P-33-2," for not being found in the records of the case; and 2) Exhibit "P-34-1," for failure of the document offered and identified to correspond with the document actually marked. On April 20, 2022, petitioner filed a Motion for Reconsideration (Re: Resolution dated March 29, 2022)?1 to which respondent filed his Comment/Opposition (to Petitioner's Motion for Reconsideration Re: Resolution dated March 29, 2022).22 By Resolution dated August 5, 2022,23 petitioner's Motion for Reconsideration (Re: Resolution dated March 29, 2022) was partially granted. Accordingly, Exhibits "P-33-2" and "P-34-1" were admitted as petitioner's evidence. In the Resolution dated September 23, 2022, this case was submitted for decision/ 4 considering respondent's Memorandum filed on March 24, 2022, 25 and petitioner's Memorandum filed on August 30, 2022.26 ISSUE Whether petitioner is entitled to its claim for refund of or issuance of TCC for its excess and unutilized CWTs for CY 2017 in the amount of P5,437,000.00.27 21 Docket - Vol. II, pp. 850 to 856. 22 Docket- Vol. II, pp. 915 to 917. 23 Docket- Vol. II, pp. 922 to 928. 24 Resolution dated September 23, 2022, Docket - Vol. II, p. 961. 25 Docket - Vol. II, pp. 901 to 910. 26 Docket- Vol. II, pp. 937 to 958. 27 Issues, JSFI, Docket - Vol. I, p. 429.

CTA Case No. 10272 Sonoma Seroices, Inc. v. Commissioner ofInternal Revenue ARGUMENTS Petitioner argues that its claim for refund of excess and unutilized CWTs for CY 2017 should be granted because: (a) its administrative and judicial claims were filed within the two (2)-year prescriptive period provided in Sections 204 (C) and 229, of the National Internal Revenue Code of 1997 (NIRC), as amended; (b) its excess and unutilized CWTs for CY 2017 are duly supported by Certificates of Creditable Tax Withheld at Source (BIR Form No. 2307); (c) the income upon which the CWTs being claimed for refund were withheld, was included as part of the gross income reported in its Amended Annual Income Tax Return (ITR) for CY 2017; and (d) it did not exercise the option to carry over its excess and unutilized CWTs for CY 2017 to the succeeding taxable periods. Respondent counters that petitioner is not entitled to the claim for refund of its CWTs for CY 2017 because: (a) the Petition for Review was filed out of time; (b) it failed to prove that the income from which the CWTs being claimed for refund were withheld from was declared as part of its gross income in its ITR; (c) it should be subjected to 15% CWT instead of 10% CWT; and (d) claims for refund are strictly construed against petitioner for the same partake the nature of tax exemption. RULING The Petition for Review is granted. Section 7(a)(2) of Republic Act (RA) No. 1125,28 as amended by RA No. 9282, in relation to Section 3(a)(2), Rule 4 of the Revised Rules 28 Sec. 7. Jurisdiction. -The CfA shall exercise: a . Exclusive appellate jurisdiction to review by appeal, as herein provided: 2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matte rs aris ing under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Inte rnal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial; (Boldfacing supplied)

CTA Case No. 10272 Sonoma Services, Inc. v . Commissioner ofInternal Revenue of the Court of Tax Appeals (RRCTA)29 clothes the Court with jurisdiction over inaction of respondent involving refund of internal revenue taxes, among others. Among the kinds of refund of internal revenue taxes is one premised upon excessive or erroneous collection thereof, as recognized in Sections 20430 and 22931 of the National Internal Revenue Code of 1997 (NIRC), as amended. Commissioner of Internal Revenue v. Carrier Air Conditioning Philippines, Inc. (Carrier)32 laid down the conditions for the Court to acquire jurisdiction over said type of refund case, thus: Section 204 [of the NIRC, as amended] refers to the Commissioner of Internal Revenue's administrative authority to credit or refund erroneously paid or illegally collected taxes. Under this provision, an administrative claim for refund or credit must be filed within two years from payment of the tax. 29 SEC. 3. Cases within the jurisdiction of the Court in Divisions. - The Court in Divisions shall exercise: (a) Exclusive appellate jurisdiction to review by appeal the following: (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other Jaws, administered by the Bureau of Internal Revenue . .. (Boldfacing supplied) 30 SEC. 204. Autlw rihj of the Commissioner to Compromise, A bate and Refu nd or Credit Taxes. - The Commissioner may - (C) Credit or refund taxes erroneously or illegally rece ived or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund. (Boldfacing supplied) 31 SEC. 229. Recoven; of Tax Erroneously or Illegally Collected. - No suit or proceeding sha ll be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erro neously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfu lly collected, until a claim for refund or cred it has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or su m has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That U1e Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneous ly paid. 32 G.R. No. 226592, July 27, 2021 .

CTA Case No.l0272 Sonoma Services, Inc. v . Commissioner ofInternal Revenue Section 229 [of the NIRC, as amended], on the other hand, requires two conditions for the filing of judicial claims: (1) an administrative claim must be filed first; and (2) the judicial claim must be filed within two years after payment of the tax sought to be refunded. Reading the two provisions together, both administrative and judicial claims must be filed within the two-year period. Furthermore, the administrative claim must be filed before the judicial claim. This Court has previously declared that " [t]imeliness of the filing of the claim is mandatory and jurisdictional. The [Court of Tax Appeals] cannot take cognizance of a judicial claim for refund filed either prematurely or out of time." Relevantly, for CWT, ACCRA Investments Corporation v. The Honorable Court of Appeals, et al.33 clarified that said two (2)-year period to file such judicial claim is counted, at the earliest, from the filing of annual income tax return (AITR). This is because the taxpayer would know whether a tax is still due or a refund can be claimed based on adjusted and audited figures upon the filing of said AITR. 34 On April16, 2018, petitioner filed its original AITR.35 On April 24, 2018, petitioner subsequently filed its amended AITR. Following Carrier, ACCRA, and TMX, it had two (2) years from April24, 2018, or until April 24, 2020, to file both its administrative and judicial claims for refund in the order stated. Petitioner seasonably instituted: one, its administrative36 claim for refund on December 2, 2019; two its Petition for Review filed on April 8, 2020.37 Hence, the Court has jurisdiction over petitioner's judicial claim for refund of excess and unutilized CWTs for CY 2017. 33 G.R. N o. 96322, December 20, 1991. 34 See Commissioner of Internal Revenue v. TMX Sales, Inc., et al. (TMX), G.R. No. 83736, January 15, 1992. 35 Exhibit " P-3," Docket- Vol. II, p. 635 to 687. 36 Supra note 4. 37 Supra note 5.

CTA Case No. 10272 Sonoma Services, Inc. v . Commissioner of Internal Revenue Petitioner's compliance with Section 76 of the NIRC, as amended. Petitioner's claim for refund of its excess and unutilized CWTs is anchored on Section 76 of the NIRC, as amended, which states: SEC. 76. Final Adjustment Return. - Every corporation liable to tax under Section 27 shall file a final adjustment return covering the total taxable income for the preceding calendar or fiscal year. If the sum of the quarterly tax payments made during the said taxable year is not equal to the total tax due on the entire taxable income of that year, the corporation shall either: (A) Pay the balance of tax still due; or (B) Carry-over the excess credit; or (C) Be credited or refunded with the excess amount paid, as the case may be. In case the corporation is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, the excess amount shown on its final adjustment return may be carried over and credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed t h e r e f o r . 38 Under the cited law, there are two options available to the corporation whenever it overpays its income tax for the taxable year: (1) to carry over and apply the overpayment as tax credit against the estimated quarterly income tax liabilities of the succeeding taxable years (also known as automatic tax credit) until fully utilized (meaning, there is no prescriptive period); and (2) to apply for a cash refund or issuance of a tax credit certificate within the prescribed period. Such overpayment of income tax is usually occasioned by the over-withholding of taxes on the income payments to the corporate taxpayer.39 38 Boldfacing supplied . 39 UniversihJ Physicians Services Inc. - Management, Inc. v. Commissioner of Internal Revenue, G.R. No. 205955, March 7, 2018. Citations omitted .

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner of Internal Revenue Petitioner's prior year's excess tax credits. A perusal of petitioner's AITR for CY 201740 shows that it had income tax credits in the amount of P11,613,482.00, consisting of the: (i) prior year's excess tax credits in the amount of P6,176,482.00, and (ii) CWTs accumulated during the four (4) quarters of CY 2017 in the aggregate amount of P5,437,000.00, as follows:41 Prior Year's Excess Credits Other Than Minimum Corpora te Income Tax p 6,176,482.00 (MCIT) 5,437, 000 .00 Add: Creditable Tax Withheld- Calendar Year 2017 P11,613,482.00 for the first three quarters P4,942,000.00 for the 4th Quarter 495,000.00 Total Tax Credits Petitioner claims that its Regular Corporate Income Tax (RCIT) due for CY 2017 in the amount of P2,201,374.0042 was paid using a portion of its prior year's excess credits of P6,176,482.00. This leaves the prior year's excess tax credits in the amount of P3,975,108.00, and CWTs during CY 2017 in the amount of P5,437,000.00, totaling P9,412,108.00, which remained unutilized as of December 31, 2017, as shown below: Prior Year's Excess Credits other than MCIT p 6,176,482.00 Less: Income Tax Due (RCIT) 2,201,374 .00 Balance of Prior Year' s Excess Credits Add: CWTs- Calendar Year 2017 p 3,975,108.00 Excess Creditable Taxes Withheld as of December 31, 2017 5,437,000.00 1"9,412,108.00 The AITRs of petitioner for CY 2003 to 201643filed with the BIR disclosed that the prior years' excess credits reported in its Amended AITR for CY 2017 in the amount of P6,176,482.00 represents: (i) the remaining reinstated 2004 CWTs amounting to P1,692,213.09 less the adjustments to CY 2010 income tax due made by petitioner 40 Exhibit " P-4," Docket- Vol. II, p. 688 to 696. 41 Schedule 7, Exhibit "P-4," Docke t- Vol. II, p. 694. 42 Line 44, Exhibit "P-4," Docket- Vol. II, p. 690. 43 Exh ibits " P-30-1," "P-30-2," " P-30-3," " P-30-4," "P-30-5," "P-30-6," "P-30-7," " P-30-8," " P- 30-9," " P-30-10," "P-30-11," "P-30-12," " P-30-13," and "P-30-14," USB marked as Exhibit " P-19-2".

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner ofInternal Revenue amounting to !>380,481.09; and (iii) 2014 CWTs amounting to P4,864,750.00. The reinstated 2004 CWTs pertains to the duly-substantiated portion of the petitioner's excess and unutilized CWTs for CY 2004 that were claimed for refund, but were eventually disallowed by the Court En Bane based on its decision in CTA EB Case No. 697 (CTA Case No. 7613) dated April20, 201244, broken down as follows: Particulars Amount Excess tax credits for the CY 2004 claimed for refund by Petitioner P5,188,970.00 Less: the amount of CWTs disallowed by the CTA for lack of (831,470. 96) evidence P4,357,499 .04 Duly-substantiated portion of the Petitioner's excess CWTs for CY 2004 that were disallowed by the CTA due to exercise of the carry-over option To recall, petitioner filed a refund case with the Second Division of the Court for its excess CWTs amounting to P5,188,970.00 for calendar year 2004 filed and docketed as CTA Case No. 7613. On June 18, 2010,45 the Court in Division partially granted petitioner's claim for refund in the amount of !>4,357,499.04, representing petitioner's 2004 excess CWTs less the amount of !>831,470.96, which was disallowed by the Court in Division on the ground that petitioner failed to account the discrepancy amounting to !>5,911,272.40 between the total revenue of !>30,979,273.00 that was reflected in petitioner's 2004 Annual ITR46, and the income payments of !>36,890,545.40 shown in the 2004 CWTs certificates.47 However, on July 6, 2010, respondent filed an appeal with the Court En Bane, docketed as CTA EB Case No. 697, arguing that petitioner failed to prove that it did not exercise the option to carry- over the excess and unutilized CWTs for calendar year 2004 to the succeeding quarters of calendar year 2005 because petitioner failed to present its Quarterly ITRs for taxable year 2005. On April 20, 2012, the Court En Bane granted respondent's appeal and reversed the decision of the Court in Division in CTA Case No. 7613, on the ground that petitioner failed to present its Quarterly ITRs for 44 Exhibit " P-43-2," USB marked as Exhibit " P-19-2". 45 Exh ibit " P-43-1," USB mar ked as Exhibit " P-1 9-2". 46 Exhibit " P-30-2," USB marked as Exhibit "P-19-2". 47 Exhibits " P-40-1" to " P-40-54," USB ma rked as Exhibit "P-19-2".

CTA Case No. 10272 Sonoma Services, Inc. v . Commissioner ofInternal Revenue calendar year 2005 to prove that it did not carry-over its excess CWTs for calendar year 2004 to the succeeding taxable quarters of calendar year 2005. Petitioner subsequently filed a Motion for Extension of Time to File Petition for Review with the Supreme Court but eventually, petitioner failed to file the intended Petition for Review on Certiorari within the period prayed for in the Motion, thus the case was declared closed and terminated and that the judgment sought to be reviewed has become final and executory.4B As such, petitioner reinstated the duly-substantiated 2004 excess CWTs in the amount of P4,357,499.04, less the adjustment to CY 2010 income tax due amounting to P380,481 .09, or in the net amount of P3,977,017.95, in its AITR for CY 2013 as part of its " prior year's excess tax credits." The adjustment amounting to P380,481 .09 pertains to the difference in tax due reported per AITR and Audited Financial Statements (AFS) for CY 2010 as follows: Particulars Amount 2010 Annual ITR- MCIT due49 P1 78,931.38 Less: 2010 AFS- Note 11 - Current provision for income tax - 559,413.00 RCIT due50 Unpaid portion of RCIT for calendar year 2010 settled by reducing "prior year's excess tax credits other than MCIT" reported in the calendar year 2013 annual ITR (P380,481 .62)* *the amount ofadjustment by petitioner in calendar year 2013 is P380,48 1.09. Below is the summary of the movements of the excess CWTs reflected in petitioner's AITRs from CY 2003 to 2017:51 Particulars Prior Years' CWTs for the Total Excess Year P2,506,600.00 2003 Credits P2,506,600.00 (289,502.00) Tax credits/payments P Less: Application of excess tax credits against RCIT (289,502.00) due 4R Exhibit " P-43-3," USB marked as Exhibit "P-19-2". 49 Exhibit " P-30-8," USB marked as Exhibit "P-19-2". so Exhibit " P-30-20," USB marked as Exhibit " P-19-2". s1 Exhibit "P-19," Docke t - Vol. I, pp. 495 to 498.

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner ofInternal Revenue Particulars Prior Years' CWfs for the Total Am ount carried over to 2004 Excess Year P2,217,098.00 Credits P2, 217,098 .00 P7,406,068.00 2004 P2,217,098.00 P5,188,970.00 (550,220.00) Tax credits/ payments (550,220.00) (5,188, 970 .00) (5,188,970 .00) Less: P1,666,878.00 P1,666,878.00 Application of excess tax credits agains t RCIT due P6,737,810.00 from the remainder of 2003 CWTs of P2,217,098.00 carried over to 2004 (1 ,029,302.00) (5,070,932.00) Amount claimed for refund of or issuance of tax credit certificate (CfA Case No. 7613) P637,576.00 P4,629,376.00 Amount carried over to 2005 (434,043.00) 2005 P1 , 666,8 78 .00 P5,070,932.00 (3,991 ,800.00) Tax credits/ payments (1,029,302.00) Less: (5,070,932.00) P203,533.00 P637,576.00 P3,991,800.00 Application of excess tax credits against RCIT due P637,576.00 P3,846,583.00 from the remainder of 2003 CWTs of (434,043.00) (3, 991 ,800 .00) P1,666,878.00 carried over to 2005 P203,533.00 p (203,533.00) (553,207.00) Amount claimed for refund of or issuance of tax (756,740.00) credit certificate (CfA Case No. 7757) P3,089,843 .00 P6,772, 943 .00 Amount carried over to 2006 2006 (827,408.40) Tax credits/ payments (3,683,1 00.00) Less: P2,262,434.60 P6,307,844.60 Application of excess tax credits against RCIT due from the remainder of 2003 CWTs of P637,576.00 carried over to 2006 Amount claimed for refund of or issuance of tax credit certifica te (CfA Case N o. 7911) Amount carried over to 2007 2007 P203,533.00 P3, 643,050 .00 Tax credits/ payments Less: Application of excess tax credits against RCIT (203,533.00) (553,207.00) (203,533.00) (553,207.00 due from the: p PP3,089,843.00 P3,089,843.00 P3,683,100.00 Remainder of 2003 CWTs of P203,533.00 ca rried over to 2007 (827,408.40) (3,683,100.00) p 2007CWT P2,262,434.60 P4,045,410 .00 P2,262,434.60 Amount carried over to 2008 2008 Tax credits/ payments Less: Application of excess tax credits against RCIT due from the remainder of 2007 CWTs of P3,089,843.00 carried over to 2008 Amount claimed for refund of or issu ance of tax credit certificate (CTA Case No. 8266) Amount carried over to 2009 2009 Tax credits/ p ayments Less :

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner ofInternal Revenue Particulars Prior Years' CWTs for the Total Application of excess tax credits against RCIT due Excess Year Credits (995,903.10) from the remainder of 2007 CWTs of (4,045,410.00) (4,045,410.00) P2,262,434.60 carried over to 2009 (995,903.10) P1,266,531 .50 Amount claimed for refund of or issuance of tax P5,178,381.50 credit certificate (CfA Case No. 8458) (178,931.38) Amount carried over to 2010 P1,266,531.50 P3, 911,850.00 (3,911,850.00) 2010 f>1,266,531.50 P1,087,600.12 Tax credits/ payments (3,911,850.00) P5,474,254.52 Less: (178,931.38) p P1,087,600.12 (1,087,600.12) Application of excess tax credits against MCIT due P1,087,600.12 P4,386,654.40 (392,088.25 from the remainder of 2007 CWTs of P1,266,531.50 carried over to 2010 (1,087,600.12) (392,088.25 (1,479,688.37) (1,087,600.12) (392,088.25) P3,994,566.15 Amount claimed for refund of or issuance of tax P8,874,756.55 credit certificate (CfA Case No. 8639) (1,479,209.10) Amount carried over to 2011 (4,880,190.40) 2011 P2,515,357.05 Tax credits/ payments P7,248,857.05 Less: Application of excess tax credits against RCIT 4,357,499.04 due from the: (380,481.09) Remainder of 2007 CWTs of P1,087,600.12 carried 3,977,017. 95 over to 2011 2011 CWT (971,659.00) (4,733,500.00) Amount carried over to 2012 P P3,994,566.15 P5,520,716.00 P3,994,566.15 f>4,880 ,190. 40 P1 0,385,466. 00 2012 Tax credits/payments (1,479,209.10) (4,880,190.40) (1,324,343. 00) Less: p P2,515,357.05 P4,733,500.00 Application of excess tax credits against RCIT due P2, 51 5,357. 05 from the remainder of 2011 CWTs of (4,733,500.00) P3,994,566.15 carried over to 2012 4,357,499.04 p (380,481.09) Amount claimed for refund of or issuance of tax 3,977,017.95 credit certificate (CfA Case No. 9026) (971,659.00) Amount carried over to 2013 2013 P5,520,716.00 Tax credits/ payments Add: Reinstated 2004 CWTs disallowed by the CfA per decision in CfA EB Case No. 697 dated April 20, 2012 (Item 4b) Less: Adjustment made by the petitioner (Item 4c) Net 2004 CWT reinstated in 2013 Less: Application of excess tax credits against RCIT due from the remainder of 2011 CWTs of 'P2,515,357.05 carried over to 2013 Amount claimed for refund of or issuance of tax credit certificate (CfA Case No. 9249) Amount carried over to 2014 2014 P5,520,716.00 P4,864,750.00 Tax credits/payments (1,324,343.00) Less application of excess tax credits against RCIT due from the remainder of 2011 C WTs of P1,543,698.05 carried over to 2014

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner of Internal Revenue Particulars Prior Years' CWfs for the Total Amount carried over to 2015 Excess Year P9,061,123.00 Credits P4,864,750.00 P14,054,123.00 P4,196,373.00 (219,355.05) 2015 P9,061,123.00 P4,993,000.00 (226,071.95) Tax credits/ payments (445,427.00) Less: Application of excess tax credits against RCIT (219,355.05) (4,993,000.00) (4,993,000.00) (226,071.95) P8,615,696.00 due from the: (445,427.00) p Remainder of 2011 CWTs of P219,355.05 carried P13,982,000.00 over to 2015 P8,615,696.00 Net 2004 CWTs reinstated in 2013 of (2,439,214.00) P3,977,017.95 carried over to 2015 (5,366,304.00) P6,176,482.00 Amount claimed for refund of or issuance of tax credit certificate (CTA Case No. 9808) P11,613,482.00 Amount carried over to 2016 (1,311,732.00) (889,642.00) 2016 P8,615,696.00 P5,366,304.00 Tax credits/ payments (2,439,214.00) (5,366,304.00) (2,201,374.00) Less: P6,176,482.00 (5,437,000.00) P3,975,108.00 Application of excess tax credits against RCIT due from the remainder of the net 2004 CWTs reinstated in 2013 of P3,750,946.00 carried over to 2016 Amount claimed for refund of or issuance of tax credit certificate (CTA Case No. 9771) Amount carried over to 2017 2017 P6,176,482.00 P5,437,000.00 Tax credits/payments (5,437,000.00) Less: Application of excess tax credits against RCIT (1,311,732.00) (889,642.00) due from the: Remainder of the net 2004 CWTs reinstated in 2013 (2,201,374.00} of P1,311,732.00 carried over to 2017 P3,975,108.00 2014 CWTs of P4,864,750.00 carried over to 2017 Amount claimed for refund of or issuance of tax credit certificate (CTA Case No. 10272) Remainder of 2014 CWTs carried over to 2018 On the other hand, to prove the existence of its prior year's excess credits of P4,864,750.00, petitioner presented its AITR for CY 2014,52 Summary of Creditable Withholding Taxes,53 and the corresponding Certificates of Creditable Tax Withheld at Source (B IR Forms No. 2307) for CY 201454, to wit: Exhibit Period Amount of Amount of No. Covered Income Taxes Withheld Payor Payments 52 Exhibit "P-30-12," USB marked as Exhibit "P-19-2". 53 Exhibit "P-42," USB marked as Exhibit "P-19-2". 54 Exhibits "P-42-1" to "P-42-24, USB marked as Exhibit "P-19-2".

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner ofInternal Revenue " P-42-1" 1st quarter Corullon H oldings, Inc. p 1,750,000.00 p 262,500.00 "P-42-2" 3rd quarter Corullon Holdings, Inc. t 750,000.00 262,500.00 "P-42-3" 1st quarter Total f'3,500,000.00 f'525,000.00 "P-42-4" 3rd quarter FBC H oldings, Inc. p 1,750,000.00 p 262,500.00 FBC Holdings, Inc. " P-42-5" 1st quarter 1,750,000.00 262,500.00 "P-42-6" 3rd quarter Total f'3,500,000.00 f'525,000.00 FBC Steps Realty, Inc. p 300,000.00 p 45,000.00 "P-42-7" 1st quarter FBC Steps Realty, Inc. "P-42-8" 3rd quarter 300,000.00 45,000.00 Total P600,000.00 P90,000.00 " P-42-9" 1st quarter Fercat Holdings, Inc. p 1,750,000.00 p 262,500.00 "P-42-10" 3rd quarter Fercat H oldings, Inc. 1,750,000.00 262,500.00 P3,500,000.00 P525,000.00 " P-42-11" 1st quarter Total p 1,750,000.00 p 262,500.00 " P-42-12" 3rd quarter Gilman Holdings, Inc. 1,750,000.00 262,500.00 Gilman Holdings, Inc. P3,500,000.00 P525,000.00 " P-42-13" 1st quar ter p 1,750,000.00 p 262,500.00 "P-42-14" 3rd quarter Total 1,750,000.00 262,500.00 Gracie Square Holdings, Inc P3,500,000.00 P525,000.00 " P-42-15" 1st quarter Gracie Square H oldings, Inc p 2,345,000.00 p 351,750.00 "P-42-16" 3rd quarter 2,720,000.00 408,000.00 Total P5,065,000.00 f'759,750 .00 "P-42-17" 1st quarter Mermac, Inc. p 1,750,000.00 p 262,500.00 "P-42-18" 3rd quarter Mermac, Inc. 1,750,000.00 262,500.00 P3,500,000.00 P525,000.00 " P-42-19" 2nd quarter Total p 1,750,000.00 p 262,500.00 " P-42-20" 3rd quarter Reinosa Holdings, Inc. 1,750,000.00 262,500.00 " P-42-21" 3rd quarter Reinosa H oldings, Inc. P3,500,000.00 P525,000.00 " P-42-22" 4th quarter p 100,000.00 p 10,000.00 Total " P-42-23" 1st quarter San Puente Holdings, Inc. 100,000. 00 10,000.00 "P-42-24" 3rd quarter San Puente Holdings, Inc. 100,000.00 10,000.00 100,000.00 10,000.00 Total P400,000.00 P40,000.00 Steps Dance Center, Inc. p 750,000.00 p 112,500.00 Steps Dance Center, Inc. 1,250,000.00 187,500.00 Steps Dance Center, Inc. f'2,000,000.00 P300,000.00 Steps Dan ce Center, Inc. P32,565,000.00 P4,864,750.00 Total Zobel de Ayala, Jaime Pfitz Zobel d e Ayala, Jaime Pfitz Total GRAND TOTAL From the preceding table, the total CWTs of P4,864,750.00 for CY 2014 was properly supported by BIR Forms No. 2307. Likewise, the total amount of P4,864,750.00 per Schedule of Creditable Taxes W ithheld coincides with the total CWTs reported in the AITR for CY 2014,55 thus: ss Exhibit "P-30-12," USB marked as Exhibit " P-19-2".

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner of Internal Revenue Schedule of Certificates of Creditable Tax Withheld at Source r4,864,75o.oo . Less: Creditable Tax Withheld- Taxable year 2014 per ITR 4,864,750.00 - for the first three quarters r4,844,75o.oo for the 4thQuarter 20,000.00 Difference Consequently, the total prior year excess tax credits in the amount of P6,176,482.00 is enough to cover the income tax liabilities in the amount of P2,201,374.00 for CY 2017. Petitioner opted to refund its excess and unutilized CWTs for CY 2017. Since petitioner marked the box corresponding to the option "To be refunded"56 in its AITR for CY 2017, the CWTs for calendar year 2017 in the amount of P5,437,000.00 may be the subject of a claim for refund or for issuance of TCC under Section 76 of the NIRC, as amended. This refund option was further affirmed by petitioner when it carried over only the amount of P3,975,108.00 as prior year's excess tax credits other than MCIT in its QuarterlyS7 and AITR58 for CY 2018. Said amount already excluded the CWTs being claimed for refund in this case in the amount of P5,437,000.00. Petitioner's compliance with the requisites in claiming a refund of or an issuance of TCC of excess and unutilized CWTs. In addition to the requisites provided under Section 76 of the NIRC of 1997, petitioner must satisfy the following three (3) requisites: 56 Exhibit "P-4," Docket- Vol. II, p . 689. 57 Line 31A of Exhibits " P-13," "P-14," "P-15," and " P-16," Docket- Vol. II, p p. 801, 818, 823 and 835, respectively. 58 Line 1 of Schedule 7 of Exhibits " P-11" and " P-12," Docket- Vol. II, pp. 747 and 765, respectively .

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner ofInternal Revenue 1. The claim for refund must be filed within the two-year prescriptive period as provided under Sections 204(C) and 229 of the NIRC, as amended; 2. The fact of withholding must be 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. The income upon which the taxes were withheld must be included in the return of the recipient.59 Petitioner timely filed both its administrative and judicial claims for refund of/ issuance of TCC. As already discussed above, the Court found that petitioner's administrative claim on December 2, 2019, and judicial claim on April 8, 2020 were timely filed within the two-year period required under Sections 204(C) and 229 of the NIRC, as amended. Thus, petitioner has complied with the first requisite. As to the second and third requisites, Section 2.58.3(B) of Revenue Regulations (RR) No. 02-98, as amended, states: Sec. 2.58.3. Claim for tax credit or refund. - (B) Claims for tax credit or refund of any creditable income tax which was deducted and withheld on income payments shall be given due course only when it is shown that the income payment has been declared as part of the gross income and the fact of withholding is established by a copy of the withholding tax statement duly issued by the payor to the payee showing the amount paid and the amount of tax withheld therefrom.6� 59 Republic of the Philippines, represented by the Commissioner of Internal Revenue v. Team (Phils.) Energ~; Corporation (formerly Mirant (Phils.) Energ~; Corporation), G.R. No. 188016, January 14, 2015; United International Pictures AB v. Commissioner of Internal Revenue, G.R. No. 168331, October 11, 2012; Citibmzk N.A. v. Court of Appenls, et al., G.R. No. 107434, October 10, 1997; ACCRA Investments Corporation v. The Honorable Court of Appenls, et nl., G.R. No. 96322, December 20, 1991; Section 2.58, Revenue Regulations No. 2-98, as amended. 60 Boldfacing supplied.

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner ofInternal Revenue Petitioner properly substantiated the excess and unutilized CWfs sought to be refunded with the Certificates of Creditable Tax Withheld at Source (BIR Forms No. 2307). To prove the fact of withholding of the claimed CWTs of P5,437,000.00, petitioner presented its Summary of 2018 CWTs 61 and the Certificates of Creditable Tax Withheld at Source (BIR Forms No. 2307) for CY 2017,62 reflecting CWTs in the amount of P5,437,000.00, detailed as follows: Exhibit No. Period Payor/ Withholding Agents Amount of Amount of Tax " P-32-1" Covered Income Withheld " P-32-2" 1st quarter Corullon Holdings, Inc, p 270,000.00 "P-32-3" 3rd quarter Corullon Holdings, Inc, Payments 270,000.00 4th quarter Corullon Holdings, Inc, p 1,800,000.00 60,000.00 " P-32-4" P600,000.00 " P-32-5" 1st quarter Total 1,800,000.00 p 270,000.00 "P-32-6" 3rd quarter FBC Holdings, Inc. 400,000.00 270,000.00 4th quarter FBC Holdings, Inc. 60,000.00 "P-32-7" FBC Holdings, Inc. P4,000,000.00 P600,000.00 "P-32-8" 1st quarter p 1,800,000.00 p 45,000.00 3rd qua rter Total 45,000.00 "P-32-9" FBC Steps Realty, Inc. 1,800,000.00 P90,000.00 " P-32-10" 1st quarter 400,000.00 p 270,000.00 "P-32-11" 3rd quarter FBC Steps Realty, Inc. 270,000.00 4th quarter P4,000,000.00 60,000.00 " P-32-12" Total p 300,000.00 "P-32-13" 1st quarter Fercat Holdings, Inc. P600,000.00 "P-32-14" 3rd quarter Fercat Holdings, Inc. 300,000.00 4th quarte r Fercat Holdings, Inc. P600,000.00 p 270,000.00 "P-32-15" p 1,800,000.00 270,000.00 "P-32-16" 1st quarter Total 1,800,000.00 60,000.00 "P-32-17" 3rd quarter 4th quarter Gilman Holdings, Inc. 400,000.00 P600,000.00 "P-32-18" Gilman Holdings, Inc. p 270,000.00 "P-32-19" 2nd quarter Gilman Holdings, Inc. P 4, 0 0 0 , 0 0 0. 0 0 4th quarter 270,000.00 "P-32-20" Total p 1,800,000.00 60,000.00 }st quarter Gracie Square Holdings, Inc. 1,800,000.00 P600,000.00 Gracie Square Holdings, Inc. 400,000.00 p 75,000.00 Gracie Square Holdings, Inc. 75,000.00 P4,000,000.00 PlSO,OOO.OO Total p 1,800,000.00 p 478,500.00 JZA Artworks, Inc. JZA Artworks, Inc. 1,800,000.00 400,000.00 Total Mermac, Inc. P4,000,000.00 p 500,000.00 500,000.00 Pl,OOO,OOO.OO p 3,190,000.00 61 Exhibits "P-31" and "P-32," USB marked as Exhibit "P-19-2". 62 Exhibits "P-32-1" to "P-32-29," USB marked as Exhibit " P-19-2" .

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner of In ternal Revenue "P-32-21" 3rd qu arter Mermac, Inc. 3,190,000.00 478,500.00 Total P6, 380, 000.00 P957,000.00 "P-32-22" 1st quarter p 1,800,000.00 p 270,000.00 "P-32-23" 3rd quarter Reinosa H oldings, Inc. "P-32-24" 4th quarter Reinosa H oldings, Inc. 1,800,000.00 270,000.00 Reinosa H oldings, Inc. 400,000.00 60,000.00 "P-32-25" 1st qu arter P600,000.00 "P-32-26" 3rd qu arter Total P4,000,000.00 p 270,000.00 "P-32-27" 4th quarter San Puente Holdings, Inc. p 1,800,000.00 270,000.00 San Puente Holdings, Inc. 60,000.00 "P-32-28" 1st qu arter San Puente H oldings, Inc. 1,800,000.00 P600,000.00 "P-32-29" 3rd qu arter 400,000.00 p 20,000.00 Total 20,000.00 Steps Dance Center, Inc. P4,000,000.00 P40,000.00 Steps Dance Center, Inc. p 200,000.00 PS,437,000.00 Total 200,000.00 Grand Total P400,000.00 P36,380,000.00 Exhibit No. BIR Form No. 2307 Amount "P-31" Per Schedule of Creditable Withholding Taxes "P-32" P5,437,000.00 prepared by the Petitioner Per Su mmary of CWTs Supported by Original BIR 5,437,000.00 P Form No. 2307 in the Petitioner's Name Difference Upon examination of the above enumerated CWTs Certificates, the Court finds that petitioner properly substantiated the excess and unutilized CWTs it seeks a refund / issuance of a TCC. Accordingly, petitioner was able to satisfy the second requisite. The income upon which the excess and unutilized CWTs were withheld was included in petitioner's Amended AITR. Finally, w ith regard to the third requisite, petitioner complied therewith as the P36,380,000.00 administration/ managem ent fees related to the CWTs of PSA37,000.00 were traced to petitioner's Official Receipts,63 cash receipts book,64 general journal,65 General Ledger of Administration Fees,66 Summary of Creditable Withholding Taxes Supported by Original Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) in the Petitioner's Name for CY Ended December 31, 63 Exhibits "P-33-1-1" to "P-33-1-29," USB marked as Exh ibit "P-19-2". 64 Exhibit " P-33-2," USB marked as Exhibit "P-19-2". 65 Exhibit "P-33-3," USB marked as Exhibit "P-19-2". 66 Exhibit "P-36-1," USB marked as Exhibit "P-19-2".

CTA Case No. 10272 Sonoma Services, Inc. v . Commissioner ofInternal Revenue ------------------------------------------------------------------- 201767 and Summary of Income Payments With Creditable Withholding Taxes- Management Fees Traced to Official Receipts (ORs), Cash Receipts Book (CRB) and General Journal (GJ) for CY Ended December 31, 2017,68 and in turn were reported in its AFS69 and AITR70 for CY 2017. While the amount of P60,500,000.00 administration/ management fees reflected per petitioner's AFS and Annual ITR for CY 2017 is higher than the amount of P36,380,000.00 shown in its certificates, the discrepancy of P24)20,000.00 was verified against petitioner's ORs/1 Schedule of Management Fees Without Creditable Withholding Taxes for CY Ended December 31, 2017/ 2 and Summary of Management Fees Without Creditable Withholding Taxes Traced to ORs, CRB and GJ for CY Ended December 31, 2017?3 as pertaining to management fees upon which no withholding of taxes was made by petitioner's clients/ payors, to wit: Per Official Receipt (OR) Per Cash Receipts Book (CRB)/General Journal (GJ) Exhibit OR Date74 OR No. Management Exhibit No. CRB/GJ CRB/GJ No. Administration No. 05/ 03/ 2017 01218 Fees Date75 Fees " P-33-2(5/ 12)" 05/ 03/2017 OR-00000144 "P-35-1" p 1,600,000.00 " P-33-2(11/ 12)" OR-00000168 p 1,600,000.00 11/ 10/ 2017 1,600,000.00 "P-35-2" 11 / 10/ 2017 01243 1,600,000.00 P3,200,000.00 Alejandro Zobel Padilla P3,200,000.00 p 1,900,000.00 "P-35-3" 05/ 03/ 2017 01219 p 1,900,000.00 " P-33-2(5/ 12)" 05/ 03/ 2017 OR-00000145 1,900,000.00 " P-33-2(11 / 12)" 11/ 10/ 2017 OR-00000166 P3,800,000.00 "P-35-4" 11/ 10/ 2017 01241 1,900,000.00 p 1,000,000.00 Alfonso Zobel de Ayala, Jr. 1"3,800,000.00 1 6 0, 000 .00 "P-35-5" 04/ 20/ 2017 01212 p 1,000,000.00 " P-33-2(5/ 12)" 04/ 20/ 2017 OR-00000138 500,0 00 .00 " P-33-2(12/ 12)" 12/ 28/ 2017 OR-00000170 P1,660,000.00 " P-35-6" 12/ 28/ 2017 01245 160,000.00 " P-33-2(11/ 12)" 11/ 08/ 2017 OR-00000183 p 300,000.00 300,000.00 "P-35-7" 11 /08/ 2017 01235 500,000.00 P600,000.00 p 1,000,000.00 Beatriz Susana Zobel de Ayalla P1,660,000.00 " P-33-2(4/ 12)" 04/ 24/ 2017 OR-00000140 500,000.00 " P-35-8" 04/ 24/ 2017 01214 p 300,000.00 "P-33-2(11/ 12)" 11/ 09/ 2017 OR-00000163 300,000.00 P1,800,000.00 "P-35-9" 11/09/ 2017 01238 300,000.00 p 2,300,000.00 Cristina Zobel de Ayalla P600,000.00 "P-35-10" 05/ 10/ 2017 01220 p 1,000,000.00 " P-33-2(5/ 12)" 05/ 10/ 2017 OR-00000146 "P-33-2(11/ 12)" 11/ 09/ 2017 OR-00000164 " P-35-11" 11/09/2017 01239 500,000.00 01/ 02/ 2018 OR-00000179 "P-33-3(4/ 4)" " P-35-12" 01/ 02/ 2018 0001254 300,000 .00 Fernando Zobel de Ayala P1,800,000.00 " P-35-13" 05/18/2017 01221 p 2,300,000.00 "P-33-2(5 / 12)" 05/ 18/ 2017 OR-00000147 67 Exhibit " P-32," USB marked as Exhibit " P-19-2" . 68 Exhibit " P-33," USB marked as Exhibit "P-19-2". 69 Exhibit "P-5," Docket- Vol. II, p . 704. 70 Line 30 of Exhibit " P-4," Docket- Vol. II, p . 690. n Exhibits "P-35-1" to " P-35-29," USB marked as Exhibit " P-19-2". 72 Exhibit "P-34," USB mar ked as Exhibit "P-19-2". 73 Exhibit "P-35," USB m arked as Exhibit "P-19-2". 74 Date fo rmat: month/ day/ year. 75 Date format: month/ day/ year.

CTA Case N o. 10272 Sonoma Services, Inc. v . Commissioner ofIn ternal Revenue "P-35-14" 11/ 10/ 2017 01244 2,300,000.00 "P-33-2(11/ 12)" 11/ 10/ 2017 OR-00000169 2,300,000.00 Georgina Padilla Zobel P4,600,000.00 P4,600,000.00 "P-35-15" 05/ 03/ 2017 01217 p 1,500,000.00 "P-33-2(5/ 12)" 05/ 03/ 2017 OR-00000143 p 1,500,000.00 "P-35-16" 05/ 03/2017 01216 "P-33-2(5/ 12)" 05/ 03/ 2017 OR-00000142 "P-35-17" 11/09/ 2017 01240 1,000,000.00 "P-33-2(11/ 12)" 11/ 09/ 2017 OR-00000165 1,000,000 .00 " P-35-18" 11/ 10/ 2017 01242 1,000,000.00 "P-33-2(11/ 12)" 11/ 10/ 2017 OR-00000167 1,000,000 .00 "P-35-19" 02/ 01/ 2018 0001255 "P-33-3(4/ 4)" 01/ 02/ 2018 OR-00000180 Jaime Augusto Zobel de Ayala 500,000.00 500, 000 .00 "P-35-20" 04/ 24/ 2017 01215 300,000.00 "P-33-2(4/ 12)" 04/ 24/ 2017 OR-00000141 300, 000 .00 "P-35-21" 11 / 08/ 2017 01234 P4,300,000.00 "P-33-2(11 /12)" 11/ 08/ 2017 OR-00000160 P4,300,000.00 Monica Zobel de Ayala p 300,000.00 p 300,000.00 "P-35-22" 04/ 20/ 2017 01211 300,000.00 "P-33-2(4/ 12)" 04/ 24/ 2017 OR-00000137 300,000.00 "P-35-23" 11/ 08/ 2017 01236 P600,000.00 "P-33-2(11 / 12)" 11/ 08/ 201 7 OR-00000161 P600,000.00 " P-35-24" 12/ 28/ 2017 01246 p 1,000,000.00 "P-33-2(12/ 12)" 12/ 28/ 2017 OR-00000171 p 1,000,000.00 Patricia Zobel de Ayala 500,000 .00 500,000.00 " P-35-25" 04/ 21 / 2017 01213 160,000.00 " P-33-2(4 / 1 2)" 04/ 21/ 2017 OR-00000139 160,000.00 " P-35-26" 11/ 08/ 2017 01237 P1,660,000.00 "P-33-2(11/ 12)" 11/ 08/ 2017 OR-000001 62 Pl,660,000.00 " P-35-27" 12/ 28/ 2017 01247 p 1,000,000.00 "P-33-2(12/ 12)" 12/ 28/ 2017 OR-000001 72 p 1,000,000.00 Sofia Zobel Elizalde 500,000 .00 500,000.00 " P-35-28" 01/ 10/ 2017 01199 200,000.00 "P-33-2(1 / 12)" 01 / 10/ 2017 OR-00000125 200,000.00 "P-35-29" 07/26/ 2017 01223 Pl,700,000.00 "P-33-2(7/ 12)" 07/ 26/ 2017 OR-00000149 P1,700,000.00 Steps Dance Studio Scholarship p 100,000.00 p 100,000.00 100,000.00 TOTAL 100,000.00 TOTAL P200,000.00 P200,000.00 P24,120,000.00 P24,120,000.00 In sum, petitioner has sufficiently proven its entitlement to a refund of or issuance of TCC in the amount of P5,437,000.00 representing unutilized CWTs for CY 2017. WHEREFORE, the Petition for Review is GRANTED. Accordingly, respondent is ORDERED to REFUND, or ISSUE A TAX CREDIT CERTIFICATE in the amount of P5,437,000.00, in favor of petitioner, representing its excess and unutilized CWTs for CY 2017. SO ORDERED. ~~/i~-tcy~ MARIAN IViJF. REYES-FAJARDO Associate Justice

CTA Case No. 10272 Sonoma Services, Inc. v. Commissioner of Internal Revenue We Concur: Presiding Justice /~T aTHERINE T. MANAHAN Associate Justice CERTIFICATION Pursuant to Section 13 of Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. Presiding Justice