CTA Case No. 2821 (Decision)

It Er t l lH.t r OF 1 n ;: l'llJ U J>P INlt n COURT ~ i: TA:~ APPEALS O L' EZO N CIT Y AUGUSTO L. GUANZON, Petitioner, - .versus - C. T.A. CASE NO. 2821 EFREN I o PLANA, COMMISS I ONER OF INTERNAL REVENUE, Respondent. X- - - - - - - - - - -X DE C I S I 0 N From the decision of respondent Commissioner of Internal Revenue dated July 7, 1976 demanding payment of the sum o f ~26,148 o 90 as defic i ency income tax for the y~ ar 1966 including i nterest, petitioner Au~usto L. ~uan z on appealed to this Court. As borne out by the records, petitioner filed h is income t ax return on accrual basis f~r the year 1966 on April �17, 1967, r eporting a net income of P40,338.92 on which he paid an income tax of P9,122.00. At that t i me, he was a real estate dealer, engaged in the business of renting apartments and houses, as well as selling lots; an agr i culturist, owning �two plant- . ations, one i n Bancua, Moun t ain Province, and anothe r in Mauban, Quezon Prov inc e ; a nd al s o the president of Guanzon Lime Development Co., Inc., a domestic corpo- ration engaged in the manufacture of lime. In the early part of 1972, an examiner of the Bureau of Internal Revenue examined the books of

DECISION - CTA CASE NO. 2821 �. 2 - accounts of petitioner, and in a letter dated February 29, 1972 respondent demanded from him the payment of the sum of ~762,847.68 as alleged defi- ciency income tax, surcharge and interest for the year 1966. Not convinced of the legality of the assessment, petitioner protested the same with respon- dent on March 20, 1972 with the request that it be countermanded. In a letter dated January 20, 1975, however, respondent requested petitioner to execute a waiver of the running of the prescriptive period of the statute of limitations up to June 30, 1980~ which the latter agreed up to March 14, 1975, but "' eventually was extended to February 28, 1978o Meanwhile, in a letter dated September 12, 1975 respondent suggested to petitioner the availment of the benefits of Letter of Instructions No. 308. How- ever, on December 22, 1975 petitioner offered respondent the payment of only the amount of P867o00 as 15% of his alleged legal liability in accordance with said Letter of Instructions No. 308 o On July 7, 1976, after study of the case, respon- . dent reduced the assessment of ~762,847o68 as deficiency income tax, inclusive of surcharge and interest for 1966 to P26,148.90 arrived at as follows:

DECISION - CTA CASE NO. 2821 -3 - Net income per return o�ooooooo .. oooooooo�o� P 40,338o92 Add: Unallowable deductions: 1 .. Rental deposit~:-:-:-:-~:-. P 1,440.00 2~ Salaries and wages p~id in connection with farming business oo����� oo 10,983.90 3o Salaries paid to Mro Francisco Reyes ��o�o�o��� 500.00 4o Salaries & wages accrued o 13,508.10 5o Bonus payable ��� oo���� o��� 15,600o00 6. Repairs and maintenance�� 1,249.84 7 o Transportation expense o� 5,613.25 8o Light and water ooo�� o�o��o 251.30 9. Taxes and licenses o. .. .... 30.50 lOo Development cost written- off ������o � ��o� ooq oooooo�� 1,989.00 51J.l65 o29 Net income per investigation o...... ".. u ��� _p_9_31. .,_5,_o0qo4..o2o1 Less: Personal exemption ��ooooo <> �������� oo Net taxable income � o��oo���� o<>u oo��o��� o�o� lP 88,504o21 Income tax due thereon o��o�o .... o�� o.. .. .. .. o. ~ 31,282.00 Less: Amount paid oooooooo o��� oo ���o����o� o� 9,122o00 Balance of tax due �oo��o��� o��o����o�� ooo�� p! 22,160.00 Add: 18 % maximum in terest ���� o�o��� o������ 3,988.90 TOTAL AMOUNT DUE AND COLLECTIBLE p 26,148.90 As regprds the offer of petitioner of 15 % of P5,783.00, the amount claimed as due from him, representing compro- mise under Letter of Instructions No. ~08, respondent informed petitioner that inasmuch as the assessment of P26,148.90 was issued only on July 7, 1976, such assess- ment could not be the subject of a compromise under said Letter of Instructions since only delinquent accounts assessed on or before December 31, 1974 may be the sub- ject of a compromise thereundero Petitioner was there- fore urged to pay the said amount of P26,148o90, but if he is not agreeable . thereto, he could file a ~etition

DECISION - CTA CASE NO. 2821 - 4- for review wi t h this Court. Hence, the present appeal. In his a nswer to the petition _for review, respon- dent admits that the basis for the amended assessment was the disallowance of the following items , to wit: Rental de posit � o � � � � � � o � o .~ 1,440.00 Salaries and wages paid in connec tion with farming business � � � � � � � � � o ��� 10,983.90 Salaries paid to Mr. Francisco Reyes � 500.00 Salarie s and Wages Accrued � o � � � � 13,508.10 Bonus Payable � � � � o � � � � � a � 15,600o00 Repairs & Maintenance ��� o �� a o 1,249o84 Transportation expenses .� � ����� 5,613.25 Light & Water o � � � � � � � � o � � 251.30 Taxes & Licenses � � � � � � � � � � � 30.50 Development Cost written off � � � � � 1,989.00 And respondent states by way of special and affirmative defense that "The disallowancesof the above-~entioned items were proper since in an administrative hearing conducted on March 21, 1973, petitioner f a iled to sub- stantiate or justify the aforementioned deductions and/or exclusions in its income tax return for 1966." (Par. 6, Answer, Po 33, CTA records.) . So that if peti- tioner was able to substantiate or justify any or all the above deductions and/or exclusions in the hearing before this Court , it follows that the assessment under review s hould be cancelled or modified as the case may beo Has peti t ioner been able to substantiate by adequate evidence the above -~ention ed deductions which he claimed in his 1966 income tax return? ,, ~ r~ ~iU

DECISION - CTA CASE NO. 2821 - 5- At the outset, it should be stated that tax assessments are presumed to be cor~ect unless the contrary is shown, and the burden of proof rests upon the taxpayer to overcome this presumption. The deter- mination, however, of a deficiency by the Government i s only prima facie correct. (Gutierrez vs o Collector of Internal Revenue, L-~9537, May 20, 1967, 14 SCRA 33; Tan Guan vs . Court of Tax Appe als, L-~3676, April 27, 1967, 19 SCRA 903; Repu blic vs o Philippine Rabbit Bus� Lines, Inc., L-26862, March 30, 1 970, 32 SCRA 211.) In light of t h is legal presumption and the special and affirmative defense of respondent that the above-~entioned items were disallowed because in the administrative hearing conducted by his office, petitioner failed to substantiate or justify the afore-mentioned deductions and/or exclu s ions, we will now proc~ed to examine the evidence of t he parties presented not only in the hearing befor e the appellate division of the Bureau of Internal Re venue but more particularly before this Court and determine whether petitioner has properly substantiated his claimed deductions in his 1966 income tax return t o be entitled to deduct the same. After all the hearing before this Court partakes of a trial de ~ and the Court is authorized to receive evidence, summon witnesses, and give both parties, the Government and the taxpayer, opportunity to present and argue their

DECISION - CTA CASE NO. 2821 - .6 - sides, so that the true and correct amount of the tax to be collected may be determined ~nd decided. (Collec- tor of Internal Revenue vs. Batangas Transportation Company & Laguna-~ayabas Bus Company, L-9692, January 6, 1958, 102 Phil . 822.) We will now discuss the disallowed deductions in seriatim in the order listed by respondent in his decision appealed from and ascertain whether or not petitioner is entitled to his claimed deductions. For better understanding of the case and easier appraisal of the evidence presented, attached hereto and made an integral part of this decision are Annexes which consist of lists of the exhibits proffered by petitioner to substantiate his claimed deductions to which refe- renee will be made in the discussion of each item. 1. Rental Deposits - ~1,440.00 Respondent considered as undeclared income these rental deposits in the amount of ~1,440o00 reflected in the books of petitioner as of December 31, 1966, ~lleging that they are not liabilities as contended by petitioner because it is arnual practice in the leasing business to require the tenant a deposit equi- valent to two (2) ~onths at the time of occupancy; hence, they should be treated as income in the year they were received. As authority thereof, respondent cites Merten'~ Law of Federal Income Taxation to the ') r-; 0 N 4 !_)

DECISION - CTA CASE NO. 2821 - 7- effect that "rents received on either cash or accrual basis by taxpayers under a claim of right without res- trictions, contractual or otherwise, constitute income in the year of receipt." (Vol. 2, Chapter 12, p. 86, par. 12.30; Respondent'~ memorandum, p. 90, CTA records.) On the other hand, petitioner maintains that it is customary business practice to require the tenant to put up a deposit equivalent to one or two months as security for unpaid rentals or any damage on the leased property during the tenant's occupancy. This rental deposit is set up in the books of accounts as an obli- gation to the tenants. When he vacates the premises and he does not have any rentals in arrears, this deposit is returned to himo If he leaves the leased property with an unpaid rental , the deposit is applied and set up as rental incomeo (t.s.n., p. 6, hearing on August 31, 1977.) . To prove this, petitioner pre- sented Exhibits "B" and "B-1.'' to "B-8", consisting of the rental deposit schedule and analysis , and the supporting official receipts and cash vouchers showing the subsequent refund or application of these deposits j to rental income. (t.s.n., pp. 42-4.9, hearing on J September 31, 1977; Annex 1 of Decision.). No proof was presented by respondent to controvert or dispute these evidence of petiti oner.

DECISION CTA CASE NO. 28 21 - 8- Judging f rom the foregoing, it is qui t e apparent that the nature of the disputed re~tal deposits is more of a security fo~ the lessee'~ performance than a pre-payment of rent, t here being no written agreement regarding the disposition of these rental deposits. (p. 144, Vol. II, BIR records~ pp. 400-~01, Vol. II, BIR records.) In the case of rental deposits, it has been held that: "If, however, payment is made t~ secure the lessee'~ per f ormance under the lease it is not taxable inc ome even though the fund is deposited with the lessor instead of in escrow and the lessor has temporary use of the money. Since in some instances the payment s e rv e s as security for the lessee'~ perfor- mance and, in addition, maybe applied to rent, it fre- quently becomes necessary to determine whether the deposit was primarily a security payment or a prepayment of rent." (Merten's. Law of Federal Income Taxati.on, par. 12.30, vol. 2, chapter 12, p. 87-~8.) Clearly, therefore, the rental deposits in the amount of ~1,440.00 do not constitute taxable income for the year 1966. 2. S alar ~ es And Wages Paid In Connection With Farming Busine ss - ~10,983.90 The salaries and wages in the amount of ~10,983.90 paid by petitioner to his employees and farmhands at

DECISION - CTA CASE NO. 2821 - 9- his Liwayway Plantation at Mauban, Quezon Province, were disallowed by respondent because they were not substantiated. Respondent'~ examiner'~ main reason for the disallowance was that no payroll sheets or other documents or papers were presented.for verifi- cation to prove that the total amount of Pll,914.90 (reduced to Pl0,983.90) .was actually paid and received by the employees and/or laborers of said plantation. (Examiner'~ report, PPo 130-~33, Vol. II, BIR records.) During the hearing of the case before this Court, how- ever, petitioner introduced as evidence the cash vouchers (Exhibits ''C", "C-~" to "C-~" and "C-4" to "C-~8") ~ith signed payrolls and receipts attached thereto to justify the deduction of the above wages. (See Annex 2 of Decision.) Having met the condition required by respondent for the allowance of this claimed deduction, it follows that petitioner is entitled to deduct from his gross income the above salaries and wages in the amount of Pl0,983.90o 3o Salaries Paid To Mr o F . Reyes - P500.00 Payment of this expense in the amount of P500.00 was made per Cash Voucher No. 3629 (Exhibit "F") ~ated April 13, 1966 by PBTC Check Noo 786839 to taxpayer Augusto L. Guanzon to reimburse him for the amount he paid to Atty. Francisco Reyes for services allegedly

DECISION - CTA CASE NO . 2821 - 10 - re ndered to Ao L. Guanzon Real Estateo Upon veri fi- cat ion b y respondent'~ examiner, P~TC Check No. 7 86 839 was found to be payable to Augusto L. Guanzon a nd depos ited in h is account. {p. 130, Vol. II , BIR records.) , The re were no supporting papers showing that payme nt was previou sly made to Attyo Francisco Reyes and the natur e , exte nt and value of the service s h e wa s being compe n sated for . Pet it ioner having failed to justify and substan- tiate the d eductibility of this expense, the same should be disallowed. 4. Salaries a nd Wages Accru e d - ~13,508.10 Su Bonus Pa~able - ~15,600 .00 Both the accrued salaries and wages in the amount o f Pl3, 508.10 and the bonus payable in the sum of Pl5,600.00 were disallowed by respondent for the same reason; namely , they were entered in the books of acc ounts o� p etitioner as expense accounts and claimed as deductions fr om gross income in 1966 without any supporting journal vouchers explaining the nature of said e xpense. (p. 129, Vol o II, BIR records .) And t hat no doc uments were ever presented to substantiate tax payer'~ claim of the above items as deductions from gross income despite verbal as well as written requests made to th is effect. ( Respondent'~ memorandum, p. 92, q .,_,. ') u 1-W 1-....1

DECIS I 0N - CTA CASE NO . 28 21 - 11 - C'I'A rec o rds. ) It should be stated that when the case was heard before this Court, petitioner, to establish the fact that these accruals were actually paid in the succeed- i ng years , pr e sented the cash vouchers (see Annex 3 of Decision; Exhibits "D", "D-1" to "D-1_4" and Exhibits "E", "E-1" to "E-6_") .issued in payment of the disp u ted accrued salaries and bonuses , s howing the payees and the corresponding explanation for each disbursement. (t.s.n., pp. 11-~1 , hearing on August 31, 1977.) . Except for Cas h Voucher No . 3941 in payment of an accru e d s alar y f or ~270.00 which was not submitted for verificati on, all the other vouchers were duly signed and r eceipt ed f or. Since respondent did not impugn or ' controve r t th e correctne s s of petitione r '~ suppo rting documents , re s pond e nt'~ disallowance of these disputed ite ms, with the e xception of the above-stated ~270 . 00, can not be sustained . 6. ~epairs And Ma inte- nance - Pl ,2 49 .84 Of th e a mount of ~2,329 . 84 representing repairs and mainte nance expenses disallowed by respondent's. examiner in the original investigation , ~1 , 180 .00 wa s considered as allowable deduction in the reinvestigation of this c a se~ The remaining ~1 , 24 9. 84 was disallowe d by the exami ner because it was not supported with '> :_;. f") ; ...., (..._ ) -...)

DECISION - CTA CASE NO. 2821 - 12 - receipts and invoices. (p. 396, Vol. III, BIR records.) A re-examination of the twenty-seven (27) ~ash vouchers presented by petitioner showing payments of these repairs will disclose that only ten (10) youchers are not supported with receipts nor signed by the payee~ Most of the ten (10) youchers are reimbursements of wages and are of insignificant amounts, the total of which adds up to only a little over ~200.00. (See Annex 4 of Decision; Exhibits "G", "G-1." to "G-26".). It is of common knowledge that for minimal repairs, evidencing payments to laborers are generally overlooked. And since the unsupported payments for repairs are not substantial nor unreasonable, the total amount of ~1,249.80 may be allowed. 7. Transportation Ex- pense - ~5,613.25 Transportation expenses in the amount of P5,613.25 were disallowed by respondent for lack of evidence showing that they were incurred and spent in connection with taxpayer'~ business. (Po 396, Vol. III, BIR recordso) The breakdown of the transportation expenses pre- pared by petitioner (petitioner'~ memorandum, p. 53, CTA records) .shows that it is composed mainly of three items, namely: transportation and meal allowances given to Mrs. Dolores A. Guanzon, assistant manager and cashier, covered by General Journal No. 21 in the amount of ' ) <;:. . ~ N ~-"" . .l

DECISION - CTA CASE NO. 2821 - 13 - ~1,402.05; expenses of ~4 , 200 . 00 per General Journal No. 24,and transportation expenses . paid to personnel per petty cash vouchers totalling ~11 . 20 . (Exhibits "H" & "H-1." to "H-3."; Annex 5 of Decision.) The details of General Journal No. 21 are reflected in the cash vouchers presented as Exhibits "H-4" to "H-8." (see Annex 5 o f Decision) .which are reimbursements made to Mrs. Dolores A. Guanzon in 1967 for transport- . ation and meal expenses incurred in inspecting ricelands at Lubao, Minalin and Macabebe , Pampanga, from June to December , 1966. However, aside from the Liwayway farms in Mauban, Quezon Province, it doe ~ not appear in the records that the ricelands at Lubao, Minalin and Macabebe, Pampanga, are income-producingo It is incumbent upon petitioner to establish that the expenses in these inspection trips were incurred in the pursuit of his t~ade or business; otherwise , said allowances can not be allowed as deduction . (Sec . 30(a5~ National Inter- nal Revenue Code . ) ~As ~y explained counsel for petitioner, the expenses in the amount of ~4,200o00 covered by General Journal Noo 24, which was not presented as evidence, consisted of electric bills paid to Gaudencio Manalac Electric for street lights at Florida Homesite Subdivision . (Petitioner's. memorandum, p . 53, CTA records o) .Clearly , said payments are not transportation and can not there-

DECISION - CTA CASE NO. 2821 - 14 - f ore be deductible as such. Of the three items enumerated, only those for transportation expenses paid to personnel in the total amount of ~ll o 20 should be allowed as deductible expenses since these were substantiated by petty cash vouchers and si gned by the payeeso (Exhibits "H" & "H-1" to "H-3."; Annex 5 of Decision.) 8. Light And Water - ~251.30 The electr ical cons umption for December, 1965, at Florida Hou sing Subdivision amounting to ~25l o 30 paid per Cash Voucher No . 3605 (Exhibit "H-9."; Annex 5 of Decision) _on March 17, 1966 was correctly disallowed by respondent as it should not have been taken up as an �expense in 1966 , but should have been accrued in 1965, petitioner being on the accrual basis. 9 . Taxes And Licenses - ~30.50 Petitioner claimed as deduction in 1966, taxes and licenses i n the amount of ~38 o 00 which consists of ~30.00 for occupation fees for the Liwayway Mining Claim for the years 1963, 1964, 1965 and 1966 and an additional charge of ~8.00. On the ground that the fees for the years 1963, 1964 and 1965 amounting to ~22.50 should have been accrued and deducted in said years and that the addi- tional ~8.00 charge was not evidenced by any receipt, G q ~. tV ._.,

DECISION - CTA CASE NO. 2821 - 15 - bill or invoice, respondent disallowed the sum of ~30.50. (Examiner'~ report, p . 119, Vol. II, BIR records.) No evidence or explanation was offered by petitioner to refute this , hence, the disallowance should be sustained . 10. Development Cost Written Off - ~1,989 . 00 The development cost of petitioner's coffee, black pepper and cacao project, set up as capital expenditure prior to 1966, was written off as an expense in 1966, allegedly because it was found to be a failure . (Peti- tioner'~ memorandum , Po 55 , CTA records.) Aside from this bare statement , no adequate evidence was furnished by petitioner at any time during the administrative and court hearings of this case to prove his claim . For. . failure to substantiate or justify this claimed deduc- tion, the same should be disallowed. Prescription Not much need be said on petitioner ' ~ point that the r i ght of respondent to assess the tax in question has already prescribed. The situation here presented would not create prescription because, as stated earlier, petitioner signed a waiver of the statute of limitations whereby he agreed in writing to the assessment of his deficiency income tax for 1966 up to Fe�bruary 28, 1978o The final assessment was made by respondent on July 7 , ,,q...,., :\,.:; �7

DEC IS ION - CTA CASE NO. 2821 - 16 - 1976 which i s within the period agreed upon. Computation For all the f oregoing, the computation of the deficiency income tax liability of petitioner for the year 1966 is as fo llows: Net income per return � � � � o � � � P40,338 o92 Add: Unallowable deductions : Salari es paid to Mr �� F. Reyes � � � � � � � ~ 500.00 Salaries and wages accrued � � o � o � o 270 o00 Transportat ion expenses 5,602.05 Light and water � � � 251.30 Ta xes and licenses � o 30.50 Development cost written off o � 1,989e00 8,64.2. 85 Net income per decision � � � P48,981.77 Less: Personal exemption �� o 3,000.00 Net taxable income � o � � � o � ~45,98l o 77 Income tax due thereon � � � � � Pl2,473.00 Less: Amount paid � o �� o 9,122.00 Balance of tax due o � � � � � � ~ 3,351.00 Add: 18% maximum interest � � � 603.18 Total amount due and collectible ~ 3 u954ol8 Accordingly, petitioner Augusto Lo Guanzon is here- by ordered to pay the amount of ~3,954.18 to respondent Commissi oner of Internal Re venue as deficiency income tax and interest for the year 1966, plus the surcharges and inter est which have accrued thereon incident to delinquency, pursuant to Section 5l(e) of the National Internal Re ven ue Code, as amended. WHEREFORE, the decision appealed from is modified as indicated in the above opinion of the Court. With

DECISION - CTA CASE NO. 2821 - 17 - costs. SO ORDERED. Quezon City, Metro Manila, August 27, 1980o ~B:J Presiding Judge WE CONCUR: -� ROAQUIN ssociate Judge q u�... � .(._) 1-V

ANNEX 1 DECISION - CTA CASE NOo 2821 1. Rental Deposits - j1,440.00 Exhibit Date c.v. or Tenant Particulars Amount Findings No . o.R. No . B-3 -- - -- - ------ - - - - - - - - - �- - - - ------- B- 4 7-1-65 O.R. Perfex Engi- Deposit for jl 420.00 Applied to 3668 neering and bodega rent income per CoV. 4769 l1achinery (Exh. B-8) 7-S-66 o.R. Pablo s. Luna Deposit for 420 . 00 Applied t.o Rodolfo Luna's 4113 Enterprises bodega rent per O.R~ 5229 dated 5-31-79, (Exho B-7) B-5 5-11-66 o . R. Andres Deposit for Apt. 200 . 00 Applied to ren- 4053 Castillo tal income for Noo 744, 7th Gregorio Gonzales Avenue per G.J. Noo 15 dated 12-31-67 (Exh . B-2) Peti- tioner' s exhibits. B-6 8-25-66 o.R. Jemm Enter- Deposit for 640- 400o00 Applied to ren- 4165 prises 642 Magdalena tal income per Extension G. J . Noo 15 dated 12-3 1-67 (Exho B-2) Petitioner's exhib-its o T 0 TAL !!l~~~Q2.QQ -~--:--- - - - B-7 5-31-69 OoRo Rodolfo Luna March to May, (See Exhibit B-4) 5229 1969 rent paid for Bodega A less deposit per O. R. 4113 ~:!!~~~~~~ B- 8 9-4-69 o.R. Perfex Engi- Refund of bal- (See Exhibit B-3) 4769 neering and ance of rental Machinery deposit ;j:l:==3;:7==8=.5=1= n q e ,. � !(.J \ ��

ANNEX 2 DECISION - ~11 , 914.90 reduced CTA CASE NO. 2821 to i10,933.90 2. Salaries and Hages on Farm:i.n~ Business Exhibit Date Voucher P AR T I C UL AR S Amoun t - N-o-. - - - - - - - N-oo- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - c 1-11-66 351 5 Payroll of 7 fanru1 ands , 1 supervisor, 1 super- i 473.00 intendent at Hacienda Li~rayway, Mauban , Quezon for Deco 16-3 1, 1965 C-1 1-20-66 353 1 Payroll for Liwayway Farm for Jan. 1-15, 1966 448 o50 C-2 2-1 1-66 3568 Payroll for Liwayway Farm fo r Ja~. !6-31,1966 483 . 50 C-27 2-23-66 3580 Payroll for Liwayway Far m fo r Febo 1-15 , 1966 483.50 C-4 3-11-66 35 96 Payroll for Liwayway Farm for Feb . 16-28,1966 434.50 C-28 3-25-66 3612 Payroll for Liwayway Farm f or Mar . 1-15, 1966 483o50 c-5 3-25-66 36 13 James Manis, Bangcua Tuba Be nguet, Mt . Pro- vince for serv ices rende re d for l~rch 1966 135.00 C-6 4-13-66 3630 Payroll fo r Li>�myway Farro for ~r . 16-31,1966 508.00 C-23 4-25-66 3646 Payroll for Liwayway Farm f or Apr. 1-15, 1966 434.50 C-7 4-25-6 6 364 7 James Manis, Bangcua Tuba ~ Services rendered for April, 1966 135.00 C-8 5-17-66 3669 Payroll for Liwayway Farm for Apr . 16-30,1 966 473.00 C-25 5-31 - 66 3631 Payroll for Livmyway Farm f or ~y 1-15, 1966 459.00 C-9 6- 9-66 369 2 Payroll for Liwayway Farm for May 16-31, 1966 508.00 C-10 6-25-66 3705 Payroll f or Liwayway Farm for June 1-15, 1966 483.50 C-11 7-25-66 3722 Payrol l for Liwayway Farm for June 16-30,1966 483.50 C-26 7-25-66 3723 James Manis, services rende red for June, 1966 135.00 C-12 8-1-66 3735 Payroll for Liwa~ray Farm for July 1-15, 1966 459.00 C-24 8-11-66 3745 James Manis, services rendered for July, 1966 135.00 C-13 8-11 -�6,6 374'7 Payroll for Liwayway Farm f or July 16-31,1966 483.50 C-14 8-24-66 3759 Payroll for Liwayway Farm for Augo 1-15, 1966 442.50 C-15 9-2-66 3774 Jarues Manis, services rendered for Aug., 1966 135.00 C-16 9-1 4-66 3779 Payroll for Liwayway Farm for Aug . 16-31,1966 508.00 C-17 9-30-66 3798 Payroll for Livrayway Farm for Sept . 1-15, 1966 483.50 C-18 10-15-66 3112 Payroll for Liwayway Farm f or Sept.15-30, 1966 460 .50 C-19 11-8-66 3835 Payroll for Liwayway Farm for Oct. 1-15, 1966 510.00 C-20 11-15-66 3839 Payroll for Liwayway Farm for Oct. 16-31, 1966 507.50 C-21 11-15-6Q 3840 James Manis, services rendered for Sept. and 270.00 Oct., 1966 C-22 11-23-66 3851 Payroll for Liwayway Farm for Nov. 1-15, 1966 466.00 Co rrect Total NOTE: All payrol ls were signed by the payeesg

ANNEX 3 DECISION - CTA CASE NO. 2821 4. Sal ar i es and Wages Accrued ~13,508.10 (Taken up as expens e s in 1966) Exhibit Cash Da t e PARTICULARS Rose- Dolores Antonio Others No. VouNchoe. r Paid Harie Guanzon Guanzon Guanzon -.- - - - - - - - - - - - - - - - - D 3967 2-23-67 Assistant to the Gen. l1anager , Administrator, Comptroller of A.L. Guanzon Rea l Estate, Ag riculturc & Florida Home site Subdv. Salary for Jan. to Mar. , 1965 ~1,800.00 D-1 3970 2-23-67 Cashier-Bookkeeper of A.L. Guanzon Real Est. Salary for Harch to July , 1966 @ 1!450.00 a month 1!2,250.00 D-2 4055 5-17-67 Cashier-Bookkeeper of A. L. Guanzon Real Est. Salary for August to December, 1966 2' 250.00 D-3 4064 5-19-67 Assistant to the Gen. Manager of Real Est . & Administrator of Liwayway Cacao , Black Pepper & Banana Plantation for Sept. 16 to Oct.15, 1966 ilOO .OO D-4 4079 6-9-67 Asst. to the Gen.Hanager of Real Est. & Adminis- trator of Liwayway Cacao, Black Pepper & Banana Pl antation for Oct. 16 to Nov . 15, 1966 100.00 100.00 D-5 L�095 7-10-67 Asst. to the Gen. Manager so.oo of Real Est. & Adminis- trator of Liwayway Cacao, Black Pepper and Banana Plantation for Nov. 16 to Deco 15, 1966 D-6 4122 7-28-67 Asst . to the Gen. l1anager of Real Est. & Adminis- trator of Liwayway Cacao, Black Pepper & Banana Plantation for Dec. 16 to 31, 1966 () q ') ""- c.i r<.tl

DECISION - ANNEX 3 continued CTA CASE NO. 2821 Rose- Dolores Antonio Others Exhibit Cash Date PARTICULARS 11arie Guanzon Guanzon No. Voucher Paid Guanzon No . D-7 4267 12- 5-67 Salary of R. Guanzon D-8 D-9 for April to July, 1966 D-10 @ i600.00/mo. i2,400.00 � D-11 D-12 4268 12-16-67 Salary of Ro Guanzon 600.00 D-13 for August, 1966 D-14 3898 1-4-67 Flora Ricafort services rendered to A.L. Guanzon for 1966 i100.00 3914 1-17-67 Farmhands (1 superinten- 483.50 dent, 1 field supervisor, 7 farmhands) payroll for Dec. 1-15, 1966 3934 2-7-67 Farmhands (1 superinten- dent, 1 field supervisor, 3920 7 farmhands) payroll for 504.50 4395 December 16-31, 1966 100.00 4396 3941 1-28-67 Atty. Pedro 11arbella, for 270o00 services rendered ~!!._;500~00 i350.00i1 , 458.00 4-17-68 Salary of R. Guanzon for September, October and November, 1966 i1,800 . 00 4-18-68 Salary of Ro Guanzon for December, 1966 600.00 Not presented by peti- tioner T 0 TAL i7,200.00 5 . Bonus Payable E 4090 6-30-67 Part payment of bonus to A. Guanzon ~5,600 . 00 E-1 4265 12-5-67 Full payment of 1966 1,600.00 bonus to 'A. Guanzon E-2 4290 12-29-67 Full payment of 1966 i!2,000.00 bonus to D. Guanzon E-3 4266 12-5-67 Part payment of 1966 1,600.00 bonus to D. Guanzon E-4 4335 2-19-68 Part payment of 1966 bonus to R. Guanzon i 800 . 00 E-5 4340 2-24-68 - do - 3,500.00 E-6 4341 2-28-68 Full payment of 1966 bonus to R. Guanzon i soo.oo T0 TAL i4,800 . 00 i!3,600.00 i7,200.00 NOTE: All vouchers were signed by the payeeso

--- --- ANNEX 4 DECISION - CTA CASE NO. 282 1 6. Repair s and Haint0. nance Exhibit Date Cash Payee PARTICULARS Amount � Findings No. Voucher No. G 1-5-66 3507 Cal oo can Plumb i ng materials' for Champion repair at 123 Floren- Lumber cio Street i 74.00 Receipt attached G-1 1-6-66 3508 J. B. Reno Electrical materials Enterpri- f or r epair at 123 ses Florencio Street 180.04 - do - G-2 1-15-66 PCV Lanuza & Materi als for repair 436 Co. at 128 Stao Lucia St. 36.00 - do - G-3 1-25-55 3542 A. Guanzon For r e imbursement for payment made f or repair of wate r pipes at 1239 Lorcucia Street 50.00 Reimbursement G- 4 2-2-66 PCV Ro sauro Payment of carpenters 10.00 Signed by payee 457 Pineda for r epair in 7t h Ave. Domi na dor Apar t ment Bal angit G-5 2-23-66 PCV Pedro Reimbursement for 472 Hacdon elec t rical materials by D. for r epair at 123 Guanzon Florene io Street 15.50 Reimbursement G-6 2-26-66 D.Guanzon - do - s.oo - do - G-7 2-26-66 PCV - do - - do - . 15.00 - do - 475 G- 8 4-30-66 cv A. Guanzon Reimbursement for 3654 electrical repairs at 744 A.& B. 82.00 - do - G-9 4-25-66 PCV 517 A.Guanzon Reimbursement for repairs as per attached invoice 52.85 Invoice attached G-10 5-27-66 PCV Glomera Expenses for cleaning 19.00 Receipt attached 547 G- 11 6- 11-66 PCV D.Guanzon Reimbursement for repairs 558 at Florida Blanca Home- site and Inspection trip 24.60 Expenses itemized "q" f..) ''1

ANNEX 4 continued DECISION - CTA CASE NO. 2821 Exhibit Date Cash Payee PARTICULARS Amount Findings No. Voucher - --- No. - - - - - - - - - - - - - - - - G-12 3-5-66 PCV Repairmen General cleaning and 482 repair of typewriters i! 5.00 Signed by payee G-13 6-28-66 cv A.Tibayan Repainting of 640-642 3728 Rizal Avenue Ext. 400o00 Signed by payee G-14 8-23-66 PCV So Santos Advance for 5 pieces 627 G.I. Gutters 10.00 Signed by payee G-15 9-1-66 PCV R.Guanzon Reimbursement for ser- 642 vices rendered on electrical installation at 7th Avenue 10.00 Reimbursement G-16 10-7-66 PCV l'iacdon Repair of aircon 30o00 Signed by payee 682 G-17 10-10-66 PCV RoGuanzon Reimbursement for repair 685 of aircon at 123 Floren- cio Street 15.75 Reimbursement G-18 10-19-66 PCV D.Guanzon Reimbursement for repair 006 of electrical connections at 123 Florencio Street 23.20 Reimbursement G-19 12-7-66 cv Macdon Repair and cleaning of 3869 jetmatic pump at Florida Homesite Subdv. 50.00 Signed by payee G-20 12-2-66 cv D.Gu.anzon Cost of bamboo poles and Receipt attached & 3877 rope 21.90 Signed by payee G-21 12-21-66 cv Abellera Labor for repainting 3887 Guanzon Lime Bldg. 42.00 See Exh. "G-22" G-22 12-27-66 3888 R.Guanzon Paints per invoices 51.00 Receipt not attached (not attached G-23 12-15-66 PCV Abellera Advances for repainting 092 Guanzon Bldg. 5.00 Signed by payee G-24 12-16-66 PCV Songco Jetmatic pump install- 5.00 Signed by payee 093 ation �G-25 5-20-66 PCV DoBalangit Extra labor (painting 540 R. Pineda of 7th Ave. Apt. on 12.00 Reimbursement S~nday G-26 8-31-66 639 A.Guanzon Reimbursement for service rendered by Mejia 2.00 Reimbursement T 0 TAL I . i;:!:=l-~=2=4=9;.::8=4= r

ANNEX 5 DECISION - CTA CASE NO. 2821 7. Tr ans�ortation and Trave ll ing P5,613.25 Exhibit Date Cash Payee PARTICULARS Amount Findings No. Voucher Signed by payee Signed by payee ----- Noo Signed by payee Signed by payee H 2-1~66 PCV Eddie Transpor tation for long 456 Songco distance call ~ 3.50 H-1 2-11-66 PCV s igned butTransportation and meal 4.00 460 illegible to bring price list H-2 9-1-66 PCV - do - Transportat i on from 3.50 Florida Homesite Subdv. 6/;1 H-3 12-!9-66 095 Pineda Transportation for pur- chases from drugstore o20 T 0 T AL ~ 11 . 20 :::~;:::==== G-J No e 2 1 covering the follovting Cash Vouchers H-4 1- 4-67 3897 A. Guanzon Reimbursemen t for trans- portation and meals to i nspect ricelands at Lubao, Minalin , Macabebe , Pampanga for June, 1966 ~200.00 Signed by payee H-5 1-31-67 3922 - do - - do - for July and part of Aug.� , 1966 300.00 Signed by payee H-6 2-3-67 3927 - do - - do - f or August & Sept . 1966 300.00 Signed by payee H-7 2-7-67 3942 - do - - do - for Oct o & part: of Nov . 300.00 Signed by payee 1966 H- 8 2-22-67 3966 - do :- - do - for Oct., Nov. & Dec. 1966 300.00 Signed by payee T 0 TAL ~='=~~~~~~~ G-J No. 24 According t.o petitioner, the item covered consists of electric bills paid to Gaudencio Manalac" Electric for street lights at Florida Homesite Subdv. ~4,200.00 Not presented H-9 3-17-66 cv G.s. Mana-For electricity con- 3605 lac sumed at FHS Dec.'65 251.30 For Dec . '65 251.30 no receipt attached Electric and Receipts for For electricity con- Jan. '66 attached sumed at FHS Jan. 169 T0 TAL