TOSHIBA INFORMATION EQUIPMENT (PHILS.) INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY TOSHIBA INFORMATION EQUIPMENT (PHILS.) INC., Petitioner, -versus- C.T.A. CASE NO. 5593 COMMISSIONER OF INTERNAL Promulgated: REVENUE, MAR 1 0 200't0/;c tJ" Respondent. X--------------- - --- - ------------------------- - ----- - - - -----X DECISION This is a petition seeking for the refund or issuance of a tax credit certificate in the amount of P l 9, 338,422.07, representing wmtilized input taxes paid by Petitioner on its local purchases of capital goods and services for the first and second quarters of 1996. Petitioner is a domestic corporation duly organized and existing under and by vit1ue of Philippine laws, with principal office at 103 East Main Ave. Extension, SEPZ, Phase III, Laguna Technopark, Bifian, Laguna (Exh. A). It is registered with the Philippine Economic Zone Authority (PEZA) as an Ecozone Export Enterprise under Cer1ificate of Registration No. 95-99 (Exh. B) as well as with the Bureau of Intemal Revenue (BIR) as a value-added tax (VAT) taxpayer under VAT Registration No. 95-570-001544 (Exh. C). Petitioner is principally engaged in the business of manufacturing and exporting electrical and mechanical machinery, equipment, systems, accessories, paris, components, materials and goods of all kinds, including without limitation to those relating to office automation and information technology and including all types of -

DECISION- CTA CASE NO. 5593 PAGE2 computer based equipment and systems, computer hardware and software of all kinds, including but not limited to HDD, CD-ROM and personal computer printed circuit board. For the period January 1, 1996 to June 30, 1996, Petitioner filed its first and second quarter VAT returns, reflecting input taxes amounting to P13,118,542.00 and P5,128,761.94, respectively, or a total ofP18,247,303.94. AsPetitioner allegedly has not yet engaged in any business activity or transaction for which it may be liable for output VAT, the input taxes during the aforesaid period were not utilized as there is no output VAT against which the same may be credited. Thus, on March 27, 1998, in accordance with Section 112 (b) (formerly Sec. 106(b)] of the Tax Code, which provides: "Sec. 112 XXX (b) Capital goods. - A VAT-registered person may apply for the issuance of a tax credit certificate or refund of input taxes paid on capital goods imported or locally purchased, to the extent that such input taxes have not been applied against output taxes. The application may be made only within two (2) years after the close of the taxable quarter when the importation or purchase was made," and pursuant to Revenue Audit Memorandum Order No. 2-93,Petitioner filed with the One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance (CENTER-DOF) two separate applications for tax credit/refund of its unutilized VAT input payments: the first, from January l, 1996 to March 31, 1996 in the amount ofP14,176,601.28 (Exhs. L, M) and the second, from April 1, 1996 to June 30, 1996 an1ounting toP5,161,820.79 (Exhs. N, 0), or a total ofP19,338,442.07. As there was no immediate action on the part of CENTER-DOF and the two-year prescriptive period under Sec. 230 of the Tax Code was about to lapse, the instant petition

DECISION- CTA CASE NO. 5593 PAGE3 for review was filed on March 31, 1998 and subsequently amended on November 24, 1998 in order to conform to the evidence presented. In his answer, Respondent raised the following Special and Affirmative D efenses: "5. Assuming without admitting that petitioner filed a claim for refund/tax credit, the same is subject to investigation by the Bureau of Internal Revenue. ' 6. Taxes are presumed to have been collected in accordance with law. Hence, petitioner must prove that the taxes sought to be refunded were eiToneously or illegally collected. 7. Petitioner must prove the allegations supporting its entitlement to a refund. 8. Petitioner must show that it has complied with the provisions of Sections 204(c) and 229 of the 1997 Tax Code on the filing of a written claim for refund within two (2) years from the date of payment of the tax. 9. Claims for refund of taxes are construed strictly against claimants, the same being in the nature of an exemption from taxation." The sole issue We are tasked to resolve is whether or not Petitioner is entitled to the relief sought on the basis of the evidence presented. To support its claim, Petitioner offered as evidence the following exhibits: Exhibits Description A 13-page copy of SEC Reg. No. AS095- 006536 issued to Toshiba Information Equipment (Phils.), Inc. including its Articles of Incorporation. B PEZA Certificate of Registration No. 95-99 issued� to Toshiba Information Equipment (Phils.), Inc. c BIR Certificate of Registration No. 95-570- 001544 dated Dec. 29, 1995 issued to Toshiba Information Equipment (Phils.), Inc. 'I d1 0t

DECISION- Value-Added Tax Returns for the first, CTA CASE NO. 5593 second, third and fourth quarters of 1996 PAGE4 filed by Petitioner on April 22, 1996, July 22, 1996, October 21, 1996 and January 20, D,E,F,G 1997, respectively H, I,J,K Value -Added Tax Returns for the first, second, third and fourth quarters of 1997 L filed by Petitioner on f.p. ril 14, 1997, July nl 21, 1997, October 20, 1997 and January 20, N 1998, respectively 0 p DOF Claimant Information Sheet No. 28320 for the first quarter of 1996 Q Application for Tax Credit/Refund of Value R Added Tax filed by Petitioner for the first s quarter of 1996 DOF Claimant Information Sheet No. 28319 for the second quarter of 1996 Application for Tax Credit/Refund of Value Added Tax filed by Petitioner for the second quarter of 1996 Amended Value-Added Tax Return for the first quarter of 1998 filed by Petitioner on July 20, 1998 Amended Monthly VAT Declaration for April 1998 filed by Petitioner on July 20, 1998 Amended Monthly VAT Declaration for May 1998 filed by Petitioner on July 20, 1998 Report on the results of procedures performed by SGV & Co. on input tax claims for the first and second quarters of 1996

DECISION- Schedule of input laxes together with the CTA CASE NO. 5593 official receipts and invoices for the period PAGES January 1 to March 31, 1996 issued by Petitioner's suppliers of goods and services T-111 to T-74/3 Schedule of input taxes together with the U-111 to U-126 official receipts and invoices for the period April 1, to June 30, 1996 issued by Petitioner's suppliers of_goods and services Respondent, on his part, manifested during the hearing of May 27, 1999, that since there is no report of investigation from the One-Stop-Shop of the Department of Finance, he is submitting the case for decision without presenting any evidence (p. 124 CTA Records). Thus, after a careful evaluation of the evidence submitted by Petitioner, We rule in its favor. Being a 100% export seller duly registered with the Philippine Economic Zone Authority (PEZA) and with the Bureau of Internal Revenue (BIR) as a value-added taxpayer, this Comi is convinced that Petitioner is legally entitled to apply for the refund or issuance of a tax credit certificate of its unutilized VAT input payments (Exhibits B and C). Likewise, Petitioner's claim for refund filed with the Department of Finance One- Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center on March 27, 1998 as well as with this Court on March 31, 1998 are both well within the two year period from the dates of the filing of Petitioner's first and second qumterly returns which are April 22, 1996 and July 22, 1996, respectively.

DECISION- CTA CASE NO. 5593 PAGE6 Furthermore, to prove that Petitioner carried over its input taxes for the first two quarters of 1996 only until the final quarier of 1997 after which it already opted to file a claim for refund on March 27, 1998. Petitioner presented all its quarterly value-added tax returns up to the first quarter of 1998 and its monthly VAT declaration for April and May of 1998 (Exhibits D to K, P, Q and R). i' Finally, Petitioner submitted the invoices/official rece pts evidencing the input tax payments made during the period covered. However, an examination of the said invoices ar1d receipts showed that not all could qualify as valid invoices and receipts for the refund of input VAT payments. Consequently, the Court was constrained to reduce the amount claimed for the reasons stated hereunder: Per Claim Per Return Should be Subject of the Claim 1st Quarter 1996 (Exhs. L, M, & D ) p 14,176,601.28 p 13,118,542.00 p 13,118,542.00 2"d Quarter 1996 (Exhs. N, 0 & E) 5,161,820.79 5,128,761.94 5,128,761.94 p 19,338,422.07 p 18,247,303.94 p 18,247,303.94 Less: Disallowances per Court's Findings (Annex A) 1.) Purchases supported by invoices/official receipts without TIN-V or TIN-VAT P 271,779.70 25,339.85 2.) Purchases supported by stamped TIN-V or 12,962.99 TIN-VAT invoices/official receipts 267,000.52 3.) Purchases of VAT-exempt goods/services 3,112.65 43,765.46 4.) Purchases without TIN-V or TIN-VAT 81,272.11 invoices/official receipts but supported only 56,363.64 182,128.60 by documents such as check vouchers, provisional receipts, acknowledgment receipts, deposit slips, etc. ( 5.) Purchases with invoices/official receipts not in the name of Toshiba Info. Equip. Phils.) 6.) Purchases reported twice 7.) Purchases without supporting documents 8.) Purchase of motor vehicle with engine displacement of 2000 cc or more not allowable as tax credit in accordance with Section 104(a)(1)(E) of the Tax Code 9.) Purchases not related to capital goods .J4u

DECISION- 1,115,532.93 2. )5g,258.50 CTA CASE NO. 5593 PAGE 7 p 16,188.045.44 10.) Purchases of capital goods with incorrect computation of input tax Amount Refundable WHEREFORE, in view of all the foregoing, the Court finds the instant petition meritorious and in accordance with law. Accordingly, RESPONDENT is hereby ORDERED to REFUND or in the alternative, ISSUE A TAX CREDIT CERTIFICATE to Petitioner in the reduced amount of Pl6,188,045.44, representing unutilized input value-added tax payments for the first and second quarters of 1996. SO ORDERED. WE CONCUR: G- ERNESTO D. ACOSTA P esiding Judge I iI I . �, .. . q J..

DECISION- CTA CASE NO. 5593 PAGE8 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. o. ERNESTO D. ACOSTA Presiding Judge '4 'l. (.I.

ANNEXA TOSHIBA INFORMATION EQUIPMENT (PHILS.), INC. - versus COMMISSIONER OF INTERNAL REVENUE CTA CASE NO. 5593 COURT'S DISALLOWANCES ON CLAIMED INPUT VAT ON PURCHASES OF CAPITAL GOODS AND SERVICES 1ST & 2ND QUARTERS OF 1996 1.) Purchases supported by invoices/official receipts without TIN-V or TIN-VAT Input Tax Claimed- 1996 Total D isallowances Exh. Supplier Remarks Date 1st Qtr. 2nd qtr. T-13/1 to T-13/3 Seawind Realty & Devt. Rental - Office space 4-Mar-96 p 15,174.46 p 15,174.46 T-47/1 to T-47/3 Seawind Realty & Devt. Corp. Rental - Office space 21-Feb-96 30,348.92 10,017.00 U-22/1 to U-22/2 Seawind Realty & Devt. Corp. Rental - Office space 60,805.90 U-23/1 to U-23/2 2-Apr-96 45,523.38 p U-30/1 to U-30/2 Manila Bulletin Advertisement 12-Apr-96 5,008.50 U-47/1 20-Apr-96 60,038.00 U-70 Daniel Tan Condo unit rental 7-May-9,6 15,174.46 U-83/1 to U-83/2 28-May-96 60 038.00 U-126 Manila Bulletin Advertisement 226,256.32 Lease of Land 4-Jun-96 T & P Properties, Inc. Rental - Office space 29-Jun-96 Seawind Realty & Devt. Corp. Lease of Land subtotal p T & P Properties, Inc. p 271,779.70 2.) Purchases supported by stamped TIN-V or TIN-VAT invoices/official receipts pre-printed after July 31, 1991 T-24/1, T-25/2, T-32/2 L.D. Buenaventura Trading Letterhead/envelopes 29-1 Aar-96 p 236.36 p Letter envelopes 23-f'eb-96 68.18 T-54/1 to T-54/3 L.D. Buenaventura Trading Emp'ee Handbook 22-Jan-96 Letterhead/envelopes 27-Jan-96 7,500.00 T-68/1 to T-68/3 Corporate Resources Grp Seminar 236.36 Advertisement 1-Apr-96 T-69/1 to T-69/3 L.D. Buenaventura Trading Letterhead/calling cards 26-Apr-96 8 040.90 p Entertainment exp. 20-L1ay-96 U-19/1 to U-19/2 Corp. Resources Grp Seminar fee 14-Jun-96 1,150.00 Prof. Services 20-Jun-96 5,008.50 U-36 Manila Bulletin Entertainment exp. 20-Jun-96 27-Jun-96 577.27 U-57/1 to U-57/2 L.D. Buenaventura Trading subtotal p 235.00 1,350.00 U-96 H. Sycip &,818.18 160.00 U-107/1 to U-107/2 Corporate Resources Grp 17 298.95 U-108/1 to U-108/2 Corporate Resources Grp U-123/1 H. Sycip 3.) Purchases of VAT-exempt goods/services 25,339.85 12,962.99 T-14/12 Motorists House, Inc. Gasoline expenses 7-Mar-96 p 27.27 p 178.00 T-14/11 Motorists House, Inc. Gasoline expenses 7-Mar-96 31.82 331.55 T-14/9 Motorists House, Inc. Gasoline expenses 7-Mar-96 27.27 265.10 T-14/8 Motorists House, Inc. Gasoline expenses 7-IJlar-96 40.91 441.34 T-14/7 Motorists House, Inc. Gasoline expenses 7-Mar-96 36.36 491.91 T-14/6 Motorists House, Inc. Gasoline expenses 7-tAar-96 30.00 1 707.90 T-17/5 Motorists House, Inc. Gasoline expenses 22-IAar-96 27.27 T-17/8 Motorists House, Inc. Gasoline expenses 22-lllar-96 27.27 T-29/1 to T-29/4 Motorists House, Inc. Gasoline expenses 29-IJlar-96 133.83 T-56/1 to T-56/6 Motorists House, Inc. Gasoline expenses 26-f'eb-96 100.36 T-65/1 to T-65/2 Motorists House, Inc. Fuei/TBA expenses 22-Jan-96 1,090.91 T-23/2 to T-23/5 SGV & Co. Tax services 27-IlJ ar-96 9,681.82 U-38 Motorists House, Inc. Gasoline expenses 30-Apr-96 U-55 Motorists House, Inc. Gasoline expenses 16-l'vlay-96 11 255.09 p U-76/1 to U-76/2 Motorists House, Inc. Gasoline expenses 31-1\lay-96 U-98 Motorists House, Inc. Gasoline expenses 14-Jun-96 U-119/1 to U-119/2 Motorists House, Inc. Gasoline expenses 26-Jun-96 subtotal p 4.) Purchases without TIN-V or TIN-VAT invoices/official receipts but supported only by documents such as check vouchers, provisional receipts, acknow- ledgment receipts, deposit slips, etc. T-16/1 to T-16/3 T & P Properties, Inc. Lease of Land 13-IJlar-96 P 60,038.00 p T-21/1 to T-21/3 Manforce, Inc. Background Invest. 25-Mar-96 2,350.00 T-32 29-Mar-96 T-60/1 to T-60/3 Tricorn Systems (Phils.), Inc. Lease of Land 29-f'eb-96 51,045.45 U-24/1 to U-24/2 T & P Properties, Inc. 15-Apr-96 60,038.00 U-28/1 to U-28/2 Universal Holidays, Inc. Airfare 18-Apr-96 U-31/1 Manforce, Inc. Background Invest. 25-i\pr-96 2,524.80 U-46/1 to U-46/2 T & P Properties, Inc. Lease of Land 4,393.30 U-61/1 to U-61/2 Seawind Realty & Devt. Corp. Rental - Office space 7-May-96 60,038.00 U-62 23-May-96 15,174.46 U-69 Manforce, Inc. Background Invest. 23-1'-.lay-96 7,141.97 Progress Home & Off. Furn. Executive table 28-lvlay-96 H. Sycip Entertainment exp. 845.45 690.00 '4 J ,_

ANNEXA TOSHIBA INFORMATION EQUIPMENT (PHILS.), INC. -versus COMMISSIONER OF INTERNAL REVENUE CTA CASE NO. 5593 COURT'S DISALLOWANCES ON CLAIMED INPUT VAT ON PURCHASES OF CAPITAL GOODS AND SERVICES 1ST & 2ND QUARTERS OF 1996 Input Tax Claimed- 1996 Total 1stQtr. Disallo wances U-106/1 to U-106/2 Universal Holidays, Inc. Airfare - employees 17 -Jun-96 2,539.27 267,000.52 U-114 517 Flower Co., Inc. Flower arrangement 20-Jun-96 -P=---1:7=3:-A:-7:::1-.:4-:5:--:P: :- - -: -9:3-,:-:15'::28'-': 91'..-08":27:- subtotal 5.) Purchases with invoices/official receipts not in the name of Toshiba Information Equipment (Phils.), Inc. U-113 PLOT Telephone charges 20-Jun-96 p p 3112.65 subtotal p p 3 112.65 3,112.65 8-May-96 P 43,765.46 6.) Purchases reported twice 11-May-96 14-May-96 U-48/1 Rest. & Banquet Operations Despedida Luncheon 15-May-96 p 510.35 U-50/1 to U-50/2 Janitorial services 16-May-96 U-51 TCS Manpower Services 16-May-96 395.77 U-52/1 U-Bix Corporation Tables & chairs 16-May-96 U-53/1 Ace Car Rentals, Inc. 16-May-96 23,573.70 U-54/1 Cauder Trading Car rental 16-May-96 U-55 Tricorn Dynamics, Inc. Bond paper 20-May-96 183.90 U-56/1 to U-56/2 Motorists House, Inc. Photocopying exp. 20-May-96 U-49 Micro-Distributing lnt'l. Gasoline expenses 213.64 U-57/1 Trident Electronics Etherlink-5 units subtotal p U-58/1 L.D. Buenaventura Trading Timekeeping System 704.34 Anzo Sales Letterhead/calling cards White board 331.55 2,727.27 1 1,293.12 577.27 254.55 p 41 765.46 7.) Purchases without supporting documents 15-i'eb-96 p 36,939.71 p 44 332.40 36,939.71 p First Lepanto Taisho 16-Apr-96 44,332.40 Pragmatic Devt & Const Corp subtotal p 8.) Purchase of motor vehicle with engine displacement of 2000 cc or more 81,272.11 56,363.64 not allowable as tax credit in accordance with Section 104(a)(1)(E) of the Tax Code (Section 4.104-1(a)(5) of Rev. Reg. 7-95) U-88 Mantrade Nissan Vanette, 2000 14-Jun-96 p 5o 363.64 subtotal p 5G1363.64 9.) Purchases not related to capital goods T-14/1 to T-14/5, T-14 Motorists House, Inc. Car wax 7-Mar-96 p 27.92 p T-15/1 to T-15/4 TCS Manpower Services Janilorial services 11-iv1ar-96 290.63 22-Mar-96 281.69 T-17/9 to T-17/11 Motorists House, Inc. Supplies-car maintenance 25-Mar-96 297.35 25-Mar-96 708.36 T-19/1 to T-19/4 TCS Manpower Services Janitorial services 26-1v1ar-96 459.09 29-Mar-96 243.22 T-20/1 to T-20/3 SM Appliance Center Rechargeable lanterns 29-rllar-96 1,747.60 236.25 T-22/1 to T-22/4 Eroann Corporation Business envelopes 5-Feb-96 1,190.00 7-Feb-96 1,531.00 T-27/1 to T-27/3 Technical House of Repair Repair-air conditioner 8-Feb-96 232.86 8-f'eb-96 912.70 T-28/1 to T-28/3 Savior Security Security services 8-Feb-96 3,999.09 14-Feb-96 763.64 T-34/1 to T-34/2 "K" Line Air Service Phils. Inc. Airline Fees 16-Feb-96 381.82 22-Mar-96 2,500.00 T-35/1 to T-35/3 Airfreight 2100, Inc. Custom Duties 21-Feb-96 5,832.00 22-Feb-96 5,040.00 T-37/1 to T-37/2 Brand Asia Limited Prep.- Cons!. Ceremony 22-Feb-96 274.94 23-Feb-96 5,654.55 T-38/1 to T-38/3 TCS Manpower Services Janitorial services 26-Feb-96 10,000.00 26-Feb-96 1,763.64 T-39/1 to T-39/2 Tricorn Dynamics, Inc. Main!. fee-Copier 27-Feb-96 136.36 29-Feb-96 772.73 T-40/1 to T-40/5 Anson's Emporium ColorTVNHS 16-Jan-96 498.45 22-Jan-96 T-42/1 to T-42/3 Elarmo Enterprises Whiteboard/corkboard T-45/1 to T-46/3 Tricorn Dynamics, Inc. Photocopying exp. T-48/1 to T-48/3 Info. & Campaign Consult. Inc. Media/PR activities T-49/1 to T-49/2 Phil. Daily Inquirer Advertisement T-50/1 to T-50/2 Manila Bulletin Advertisement T-52/1 to T-52/3 TCS Manpower Services Janitorial services T-57/1 to T-57/3 Universal Holidays, Inc. Airfare T-58/1 to T-58/3 The Manila Southwoods Entrance fees T-59/1 to T-59/2 Savior Security Security services T-61/1 to T-61/3 Technical House of Repair Repair-air conditioner T-64/1 to T-64/3 Reliance Supp. Co., Inc. Fire extinguishers T-66/1 to T-66/3 Mr. Takeo Nagatomo Home appliances ._) 4 t

ANNEX A TOSHIBA INFORMATION EQUIPMENT (PHILS.), INC. - versus- COMMISSIONER OF INTERNAL REVENUE CTA CASE NO. 5593 COURT'S DISALLOWANCES ON CLAIMED INPUT VAT ON PURCHASES OF CAPITAL GOODS AND SERVICES 1ST & 2ND QUARTERS OF 1996 Input Tax Claimed - 1996 Total Disallowances Exh. Supplier Remarks Date 1st Qtr. 2nd Qtr. 182,128.60 T-67/1 to T-67/2 Office Bear Corp. Translation fee 22-Jan-96 1,700.00 T-70/1 to T-71/2 31-Jan-96 3,527.28 U-25/1 to U-25/3 Savior Security Security services 15-Apr-96 U-26/1 to U-26/2 15-Apr-96 51 003.17 p U-29/1 to U-29/2 RCPI Telegram 16-Apr-96 710.74 U-32/1 to U-32/2 25-Apr-!!6 363.03 U-33/1 to U-33/2 TCS Manpower Services Janitorial services 26-Apr-96 752.40 U-34/1 to U-34/2 Rest. & Banquet Operations Lunch-Job interview 26-Apr-96 276.09 U-35/1 26-Apr-96 U-37/1 to U-37/2 TCS Manpower Services Janitorial services 30-Apr-96 22.00 U-37/3 Rest. & Banquet Operations Food-Job interview 30-Apr-96 636.36 U-39/1 to U-39/2 30-Apr-96 738.73 U-40 Eroann Corporation Office supplies 16-Apr-96 1,763.64 U-41/1 to U-41/2 16-Apr-96 316.07 U-42/2 Speedway Electronics Office supplies 2-May-96 13,475.00 U-43/1 to U-43/2 7-May-96 11,083.10 U-44/1 Savior Security Security services 7-May-96 11,083.10 U-48/1 to U-48/2 8-May-96 200.00 U-50/1 to U-50/2 Pilipino Telephone Corp. Cellphone Charges 11<v1ay-96 10,779.50 U-52/1 to U-52/2 15-May-96 313.64 U-53/1 to U-53/2 Universal Holidays, Inc. Hotel Accomodation 16-May-96 510.35 U-54/1 to U-54/2 Pragmatic Devt & Cons! Corp Rental - Office space 16-May-96 395.77 U-58/1 to U-58/2 Pragmatic Devt & Cons! Corp Rental - Office space 20-May-96 183.90 U-59/1to U-59/3 21-May-96 213.64 U-60 to U-60/1 USA Trading Corporation Office supplies 21-May-96 704.34 U-63/1 TO U-63/3 24-May-96 254.55 U-64/1 to U-64/2 Universal Holidays, Inc. Airfare-Japan trainees 24-May-96 806.30 U-65/1 to U-65/2 24-May-96 336.40 U-66/1 to U-66/2 Microphase Laserprinter toner 24-May-96 629.72 U-67/1 ti U-67/2 Rest. & Banquet Despedida Luncheon 24-May-96 404.75 U-68 27-May-96 156.82 U-71/1 to U-71/2 TCS Manpower Services Janitorial services 28-May-96 1,315.00 U-72/1 to U-72/2 28-May-96 1 0 ,410.00 U-73 Ace Car Rentals, Inc. Car rental 28-May-96 183.90 U-74 31-May-96 1,763.64 U-75 Cauder Trading Bond paper 31-May-96 595.45 U-77/1 to U-77/2 31-May-96 224.55 U-82/1 to U-82/2 Tricorn Dynamics, Inc. Photocopying exp. 3,942.64 U-84/1 to U-84/2 4-Jun-96 179.85 U-85/1 to U-85/2 Anzo Sales Whiteboard 4-Jun-96 727.06 U-87 Rest. & Banquet Operations Despedida Luncheon 4-Jun-96 U-90 11-Jun-96 63.64 U-91/1 to U-91/2 TCS Manpower Services Manpower services 11-Jun-96 122.33 U-93/1 to U-93/2 11-Jun-96 '2,727.27 U-94/1 to U-94/2 Globe Telecom Cellphone Charges 11-Jun-96 327.27 U-95 14-Jun-96 386.72 U-97/1 to U-97/2 RCPI Telegram 18-Jun-96 169.80 U-100/1 to U-100/2 14-Jun-96 5,270.18 U-101/1 Cauder Trading Bond paper/bookpaper 14-Jun-96 149.45 U-102/2 14-Jun-96 584.90 U-103 Universal Holidays, Inc. Airfare 17-Jun-96 397.27 U-104/1 to U-104/2 17-Jun-96 500.23 U-105 Universal Holidays, Inc. Airfare - Japan trainees 17-Jun-96 821.82 U-11 0/1 17-Jun-96 136.36 U-112/1 to U-112/2 Ace Car Rentals, Inc. Car rental 20-Jun-96 850.44 U-115/1 to U-115/2 20-Jun-96 667.80 U-116 Savior Security Security services 24-Jun-96 113,784.18 U-117/1 to U-117/2 20-Jun-96 872.73 U-118/1 to U-118/2 Tricorn Dynamics, Inc. Toner 24-Jun-96 701.45 U-120 24-Jun-96 307.83 U-121/1 to U-122/2 Alta Printing Services Calling cards 26- Jun-96 595.45 U-123/2, U-124 27-Jun-96 1i),346.00 U-125/1 to U-125/2 Universal Holidays, Inc. Bus. Trip-Mr. Nagatomo 27-Jun-96 1,317.55 27-Jun-96 272.73 Pilipino Telephone Corp. Cellphone Charges subtotal p 227.27 309.09 RCPI Telegram 1 763.64 131 '125.43 Cauder Trading Office supplies Globe Telecom Cellphone Charges Takezawa Tech Transfer Consultation fee Microphase Enterprises Laserprinter toner TCS Manpower Services Manpower services Tricorn Dynamics, Inc. Photocopying exp. Universal Holidays, Inc. Airfare-Japan trainees Cauder Trading Office supplies Mayland Gen. Merchandise Office supplies Alta Printing Services Calling cards Cauder Trading Office supplies Cauder Trading Office supplies Technical House of Repair Repair-air conditioner Tricorn Dynamics, Inc. Photocopying exp. Rest. & Banquet Operations Despedida party-trainees Universal Holidays, Inc. Airfare - Japan trainees USA Trading Corporation Calculators Cauder Trading Office supplies TCS Manpower Services Manpower services Tricorn Dynamics, Inc. Toner Oracle Systems Phils Inc. Reference Manuals Universal Holidays, Inc. Airfare Eroann Corporation Calendars Flower Express Flower arrangement L.D. Buenaventura Trading Window envelopes/I.D.'s Savior Security Security services tr-):" page 3 of 4 q . ,

ANNEX A TOSHIBA INFORMATION EQUIPMENT (PHILS.}, INC. -versus COMMISSIONER OF INTERNAL REVENUE CTA CASE NO. 5593 COURT'S DISALLOWANCES ON CLAIMED INPUT VAT ON PURCHASES OF CAPITAL GOODS AND SERVICES 1ST & 2ND QUARTERS OF 1996 10.) Purchases of capital goods with incorrect computation of input tax Input Tax Clai med � 1996 Total Disallowances Exh. Supplier Remarks Date 1st Qtr. 2nd Qtr. T-74/1 to T-74/3 SNK Philippines. Inc. 1,115,532.98 Bldg cons!. costs 31-Jan-96 p 2,059,258.50 U-51 U-Bix Corp. Per Claim p 2,665,125.00 Should be 1,564,207.55 p 1 100 917.45 21),573.70 Disallowance 11 958.17 Various chairs/tables 14-May-96 14 615.53 p Per Claim 14,615.53 Should be p Disallowance p 1,100,917.45 p subtotal Total Disallowances ;4o page 4 of 4