AYALA CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION AYALA CORPORATION, CTA CASE NO. 10056 Petitioner, Members: -versus- DEL ROSARIO , P.J. , Chairperson , MANAHAN, and, REYES-FAJARDO, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DE CISlO DEL ROSARIO, P.J. : Before the Court is the Petition for Review1 filed by Ayala Corporation on April 3, 2019, praying that judgment be rendered ordering the Commissioner of Internal Revenue to issue a tax credit certificate in its favor in the total amount of P212,931 ,584.00 representing its unutilized creditable withholding taxes for calendar years 2016 and 2017.2 PARTIES Petitioner Ayala Corporation is a domestic corporation duly organized and existing under Philippine laws with principal place of business at the 33rd Floor, Tower One & Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City.3 It is registered with the BIR as a Large Taxpayer with Tax Identification Number 000-153-610-000.4 1 Docket, Vol. I, pp. 10-101 . 2 ld. at 16. 3 ld. at 260. 4 1d. at 21 ; Exhibits "P-1" and " P-2" ~

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 Page 2 of33 Respondent Commissioner of Internal Revenue (CIR)5 is the duly appointed Commissioner of the Bureau of Internal Revenue (BIR) vested with the authority to act as such, including the power to decide, approve and grant claims for refund or issuance of a tax credit certificate (TCC) pertaining to any excess or overpaid internal revenue taxes under the National Internal Revenue Code of 1997 (NIRC), as amended .6 FACTS On April 6, 2017, petitioner filed its Annual Income Tax Return (ITR) for calendar year (CY) ended December 31 , 2016 through the Electronic Filing and Payment System (eFPS) showing an overpayment of income tax amounting to P197,647,413.00. 7 For CY ended December 31, 2017, petitioner filed through the eFPS its Annual ITR on April 10, 2018, showing an overpayment of income tax amounting to P207,248,205.00. 8 On March 28, 2019, petitioner filed a claim for issuance of a TCC for its unutilized creditable withholding taxes (CWTs) for CYs 2016 and 2017 in the amount of P212,931 ,584.00, detailed below:9 CY Excess unutilized CWTs 2016 p 95,994,335.00 2017 Total Claim for Issuance of TCC 116,937,249.00 p 212,931 ,584.00 Without waiting for respondent's action on its administrative claim , petitioner filed the present Petition for Review on April 3, 2019. Summonses were served upon respondent and the Office of the Solicitor General on May 9, 2019 and May 14, 2019, respectively. 10 On June 17, 2019, respondent filed a Motion to Admit Attached Answer,11 which the Court granted in its Resolution dated August 30, s The incumbent CIR is Hon. Romeo D. Lumagui, Jr. 6 Docket, Vol. I, p. 260. 7 Docket, Vol. IV, pp. 1438-1453; Exhibit "P-12-12". 8 Docket, Vol. I, p. 12; Exhibit "P-12-13" . 9 1d. at 71; Exhibits "P-7" and "P-7-1". 10 ld. at 102-104. 11 ld. at 105-11 9.~

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 2019 ,12 thereby admitting the Answer as part of the records of the case. In his Answer, respondent prayed that the present Petition for Review be dismissed for lack of jurisdiction or, in the alternative, be denied for utter lack of merit, and, raised as special and affirmative defenses that: i) petitioner failed to exhaust administrative remedies before elevating the case to the Court given that respondent barely had six (6) days to review petitioner's refund application from the filing of its administrative claim for refund on March 28, 2019 before it was elevated to the Court on April 3, 2019; and, ii) petitioner is not entitled to the claim for refund of CWTs for failure to (a) submit proof that the income from which the CWTs being claimed was declared in its AnnuaiiTR, (b) prove that the CWTs were actually remitted to the BIR, and (c) comply with Revenue Memorandum Order (RMO) No. 53-9813 and Revenue Regulations (RR) No. 2-2006.14 The Pre-Trial Conference was set on October 24, 2019.15 Respondent filed his Pre-Trial Brief16 on October 16, 2019, while petitioner filed its Pre-Trial Brief17 on October 18, 2016. The Pre-Trial Conference proceeded as scheduled. The parties were granted until November 8, 2019 to file their Joint Stipulation of Facts and Issues (JSFI).18 1n compliance therewith, they filed their JSFI on November 8, 2019,19 which was approved by the Court in its Resolution dated November 15, 2019.20 In the same Resolution, the Court terminated the Pre-Trial and directed the issuance of a Pre-Trial Order.21 On November 8, 2019, petitioner filed its Motion to Commission an Independent Certified Public Accountant,22 which the Court granted in the January 30, 2020 Hearing where Madonna Mia S. Dayego was 12 1d. at 133-134. 13 Subject: Checklist of Documents to be Submitted by a Taxpayer upon Audit of [his/her] Tax Liabilities as well as of the Mandatory Reporting Requirements to be Prepared by a Revenue Officer, all of which Comprise a Complete Tax Docket 14 Subject: Mandatory Attachments of the Summary Alphalist of Withholding Agents of Income Payments Subjected to Tax Withheld at Sou rce (SAWT) to Tax Returns With Claimed Tax Credits due to Creditable Tax Withheld At Source and of the Monthly Alphalist of Payees (MAP) Whose Income Received Have Been Subjected to Withholding Tax to the Withholding Tax Remittance Return Filed by the Withholding Agent/Payor of Income Payments 15 ld. at 138-139 . 16 ld. at 140-143. 11 ld . at 148-160. 18 1d. at 166-171. 19 ld. at 183-191. 20 ld. at 194. 21 ld. " ld . at 172-182~

,' DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 commissioned as an Independent Certified Public Accountant (ICPA). 23 On December 6, 2019, the parties filed their Joint Motion to Admit Amended Stipulation of Facts and lssues,24 which the Court granted in the Resolution dated December 19, 2019 and directed the issuance of a Pre-Trial Order.25 On January 22 , 2020, the Court issued the Pre-Trial Order.26 During trial , petitioner presented testimonial and documentary evidence. It presented as witnesses: Maria Susana C. Babies, its Associate Director for Corporate Accounting Unit;27 and, Madonna Mia S. Dayego, the Court-commissioned ICPA.28 In the July 13, 2021 Hearing,29 the Court granted petitioner until August 18, 2021 to file its Formal Offer of Evidence (FOE). Respondent was given ten (10) days from receipt of the FOE to comment thereon . Respondent's counsel manifested that he will not present any evidence. Thus, the Court directed the parties to submit their respective memoranda within a non-extendible period of thirty (30) days from receipt of the Court's resolution on petitioner's FOE. On August 25, 2021 , petitioner filed through email its FOE30 while respondent filed his comment31 thereon on October 26, 2021. 32 In the Resolution dated March 29, 2022,33 the Court admitted in evidence petitioner's offered exhibits except Exhibits "P-12-6", "P-31- 62", "P-31-130", and "P-49-1", for not being found in the records of the case, and Exhibit "P-5-5", for not being identified in Court, and noted observations on certain exhibits admitted in evidence. 23 ld . at 298-302. 24 ld. at 202-213. 25 ld. at 252. 26 ld. at 259-269. 27 ld. at 216-249; Docket, Vol. II , pp. 429-785; Docket, Vol. Ill, pp. 786-1028, 1126-11 30 . 28 Docket, Vol. I, pp. 415-426; Docket Vol. Ill, pp. 1126-1130. 29 1d. at 1126-1130. 30 Docket, Vol. Ill, 11 38-1181 31 ld. at 1228-1230. 32 The Court of Tax Appeals (CTA) was physically closed on August 2, 2021 and the filing of court- bound docu ments was suspended pursuant to Supreme Court Administrative Circular No. 56-2021 . The filing of court-bound documents resumed seven (7) calendar days from the CTA's re-opening on October 20, 2021 . 33 1d . at 1282- 1286 .~

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 On May 4, 2022, respondent filed his Memorandum. 34 On May 6, 2022, petitioner filed an Urgent Motion for Partial Reconsideration of the Resolution dated March 29, 2022. 35 In the Resolution dated August 4, 2022,36 the Court granted petitioner's prayer in its Urgent Motion to submiUre-submit certain exhibits and submitted for resolution the Urgent Motion upon submission of the exhibits. In compliance with the Resolution dated August 4, 2022 , petitioner filed its Compliance and Manifestation, with Amended FOE,37 on August 22, 2022. In the Resolution dated October 13, 2022,38 the Court granted petitioner's Urgent Motion for Partial Reconsideration admitting in evidence all of petitioner's previously denied exhibits and gave petitioner a period of thirty (30) days from receipt thereof to file its memorandum. On November 16, 2022, petitioner filed its Memorandum. 39 Thus, on January 11 , 2023, the present case was submitted for decision.40 ISSUE The parties stipulated on the following issue: Whether petitioner is entitled to the issuance of a TCC in the sum of P212,931 ,584, pertaining to its alleged excess and unutilized CWTs amounting to ~95 , 994 , 335 . 00 and P116,937,249.99, which were generated in CYs 2016 and 2017, respectively. 41 PARTIES' ARGUMENTS Petitioner asserts that it is entitled to the issuance of TCC in the amount of P212,931 ,584.00 because: 34 1d. 1287-1301 . 3s ld . at 1302-1312. 36 1d. at 1319-1321. ~ ld. at1323-1558. 38 ld. at 1562-1568. 39 Docket, Vol. IV, pp.1569-1595. (J'l 40 ld. at 1596. 41 Docket, Vol. I, at 260.

DECISION .. Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 ~ 1. Its unutilized CWTs for CYs 2016 and 2017 were not carried over to CY 2018; 2. The source and documentations of its prior year's excess credits appearing in its CYs 2016 and 2017 Annual ITRs were duly proven during trial; 3. The ICPA conducted a thorough review and verification of its documentary evidence and found no material discrepancies therein ; 4. It substantially met the three (3) basic requirements for a claim for refund to prosper; 5. The Court has previously granted petitioner's similar claims in CTA Case Nos. 8262, 8629, and 9024 ; and , 6. Respondent did not present any controverting evidence to dispute its testimonial and documentary evidence which prove the validity of its claim for issuance of TCC.42 On the other hand, respondent counters that petitioner is not entitled to the issuance of a TCC since: 1. Petitioner violated the substance of exhaustion of administrative remedies when it did not give respondent ample to time to ascertain the veracity and validity of its claim , having given respondent only six (6) days from filing of the administrative claim on March 28, 2019 until April 3, 2019 to act on it; 2. In Philippine Airlines, Inc. vs. Commissioner of Internal Revenue ,43 the Court of Tax Appeals (CTA) ruled that the filing of the administrative claim one (1) day before the lapse of the period to file the same deprives the administrative agency of the chance to go over the claim filed before it; 3. Absent a denial of petitioner's claim or inaction on the part of respondent, the filing of the judicial claim becomes an attempt to circumvent the role and duties of the CIR in evaluating a taxpayer's claim for refund ; and, 42 Docket, Vol. IV, pp. 1576-1594. " CTA Case No. 9990, October 21, 2021 .GJ/

f DECISION Ayala Corporation vs. Commissioner of Internal Revenue -- �� ' CTA Case No. 10056 4 . Petitioner failed to comply with RMO No. 53-98 and RR No. 2- 2006.44 COURT'S RULING The present Petition for Review is impressed with merit. The inaction of respondent on petitioner's claim for refund of its excess and unutilized CWTs for CYs 2016 and 2017 prompted the filing of the present petition. Section 7(a)(2) of Republic Act (RA) No. 1125, as amended by RA No. 928245 vests the CTA of exclusive appellate jurisdiction to review the inaction of respondent in cases involving refunds of internal revenue taxes. Hence, the Court may take cognizance of the present petition. As laid down by jurisprudence, a taxpayer who seeks a refund of excess and unutilized CWT must: 1. File the claim with the CIR within the two-year period from the date of payment of the tax and the date of filing of the annual ITR�, 2. Establish the fact of withholding by a copy of a statement duly issued by the payor to the payee showing the amount paid and the amount of tax withheld; and, 3. Show on the return that the income received was declared as part of the gross income.46 In addition, the taxpayer must also show that it validly exercised the refund option in its Annual ITR under Section 76 of the NIRC, as amended. 44 Docket, Vol. IV, pp. 128 45 "SEC. 7. Jurisdiction.- The CTA shall exercise: (a) Exclusive appellate j urisdiction to review by appeal, as herein provided: XXX (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 laws administered by the Bu reau of Internal Revenue, where the National Internal Revenue Code provides a specific period for action, in which case the inaction shall be deemed a denial; XXX 46 Commissioner of Internal Revenue vs. Univation Motor Philippines, Inc. (Formerly Nissan Motor Philippines, Inc.), G.R. No. 231581 , April 10, 2019 ~

.- DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 Petitioner opted to be refunded Section 76 of the NIRC, as amended, 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 therefor." Pursuant thereto, a corporation entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, essentially, has two (2) options, either: (1) to carry-over the excess credit and apply the same against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable year; or (2) to apply for a cash refund or issuance of a TCC within the prescribed period.47 If the carry-over option is selected, such is irrevocable for that taxable period and no application for cash refund or issuance of tax credit certificate shall be allowed therefor. In exercising its option, the corporation must signify in its Annual ITR (by marking the option box provided therein) its intention , either to carry over the excess credit or to claim a refund. 48 To ease the administration of tax collection, these remedies are in the alternative, and the choice of one precludes the other.49 47 University Physicians Services Inc.-Management, Inc. vs. Commissioner of Internal Revenue, G.R. No. 205955, March 7, 2018. 48 Systra Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 176290, September 2 1, 2007. 49 Philippine Bank of Communications vs. Commissioner of Internal Revenue, et at., G. R. No. 112024, January 28, 1999. ~

... DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 An examination of petitioner's Annual ITRs for CYs 201650 and 201751 shows that petitioner chose the option to be refunded. Further examination of its Annual ITRs for CYs 2016 and 2017 reveal that for CY 2016, petitioner reported an income tax overpayment amounting to P197,647,413.00 and income tax credits amounting to P207,798,367.00 which consist of prior year's excess credit other than the minimum corporate income tax (MCIT) and CWTs for CY 2016. And, for CY 2017, petitioner reported an income tax overpayment amounting to P207,248,205.00 and income tax credits amounting to P218,590,327.00 which consist of prior year's excess credit other than MCIT and CWTs for CY 2017, as shown below: CY 2016 CY 2017 Sales/Revenues/Receipts/Fees p 990,360,225.00 p 1' 177,582,51 0.00 Less: Cost of Sales/Services Gross Income from Operation 602,244,210.00 707,081 ,181.00 Add: Non-Operating & Other 388 ,116,015.00 470 ,501,329.00 Taxable Income Not Subject to Final Tax 119,431,670.00 96,604,767.00 Total Gross Income 507 ,547 ,685.00 567' 106,096.00 Less: Deductions 5,035,353,781.00 4,863,187,491 .00 Net Taxable Income1Lossl (P 4,527,806,096.00) (P 4,296,081 ,395.00) RCIT (30%) - - MCIT (2% of gross income) Income Tax Due p 10,150,954.00 p 11 ,342,122.00 Less: Tax Credits/Payments p 10,150,954.00 11 ,342,122.00 Prior Year's Excess Tax Credits 111 ,804,032.00 101 ,653,078.00 Creditable Tax Withheld for the First Three Quarters 30 ,653,480 .00 32,925 ,320 .00 Creditable Tax Withheld for 65,340,855 .00 84,011 ,929.00 the Fourth Quarter 207,798 ,367 .00 218,590,327.00 Total Tax Credits Tax Overpayment (P 197,647,413.00) (P 207,248,205.00) The "Prior Year's Excess Credits Other Than MCIT" in petitioner's Annual ITR for CY 2017 shows the amount of P1 01 ,653,078.00. This amount reflects the excess credits of petitioner from years prior to CY 2016 amounting to P111 ,804,032.00 less the MCIT due for CY 2016 amounting to P10, 150,954 .00. Similarly, the "Prior Year's Excess Credits Other Than MCIT" in petitioner's Annual ITR for CY 2018 shows the amount of P90,31 0,956.00. This amount reflects the excess credits of petitioner from years prior to CY 2017 5o Line 21, Exhibit "P-12- 12". 51 Line 21, Exhibit "P-12- 13'(11

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 amounting to P101 ,653,078.00 less the MCIT due for CY 2017 amounting to P11 ,342, 122.00. Furthemore, perusal of petitioner's Annual ITRs for CY 2017 and CY 201852 as well as its Quarterly ITRs53 prove that the alleged unutilized CWT in the amounts of P95,994,335.00 and P116,937,249.00 were not carried over to the succeeding taxable periods, as claimed by petitioner.54 Clearly, the amounts prayed to be refunded in this case had not been carried over to the succeeding taxable periods. The unutilized CWTs for CY 2016 and CY 2017 amounting to P212,931 ,584.00 may accordingly be the subject of a claim for refund. First requisite: Administrative and judicial claims for refund were timely filed Sections 204(C) and 229 of the NIRC, as amended, provides the prescriptive period for the filing of the administrative and judicial claims for refund or recovery of tax erroneously or illegally collected , to wit: "SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. -The Commissioner may- XXX XXX XXX (C) Credit or refund taxes erroneously or illegally received 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. XXX XXX XXX SEC. 229. Recovery of Tax Erroneously or Illegally Collected. - No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to 52 Exhibit "P-12-1 7". 53 Exhibits "P-12-18" to "P12-20". 54 Docket, Vol. I, p. 13; Docket, Vol. IV, pp. 1571-1573~

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 have been erroneously 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 wrongfully collected , until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum 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 the 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 erroneously paid ." Section 204(C) of the NIRC, as amended , applies to administrative claims for refund, while Section 229 thereof pertains to judicial claims for refund . A claimant for refund must first file an administrative claim for refund before the CIR, prior to filing a judicial claim before the CTA. Both the administrative and judicial claims for refund should be filed within the two (2)-year prescriptive period indicated therein , and that the claimant is allowed to file the latter even without waiting for the resolution of the former in order to prevent the forfeiture of its claim through prescription . The primary purpose of filing an administrative claim is to serve as a notice or warning to the CIR that court action would follow unless the tax or penalty alleged to have been collected erroneously or illegally is refunded. While the law provides that the two (2)-year period is counted from the date of payment of the tax, the Supreme Court enunciated in Commissioner of Internal Revenue vs. Univation Motor Philippines, Inc. (formerly Nissan Motor Philippines, Inc.),55 that "the two-year prescriptive period to claim a refund actually commences to run, at the earliest, on the date of the filing of the adjusted final tax return because this is where the figures of the gross receipts and deductions have been audited and adjusted, reflective of the results of the operations of a business enterprise. 'Thus, it is only when the Adjustment Return covering the whole year is filed that the taxpayer would know whether a tax is still due or a refund can be claimed based on the adjusted and audited figures.'" In this case, the relevant dates and periods are tabulated below: ()'1 ss G.R. No. 231581 , April10, 2019.

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 CY Filing Date of End of 2-year End of 2-year Filing of Filing of AnnuaiiTR period to file period to file Administrative Judicial 2016 administrative judicial claim 2017 April 6, 2017 Claim for Claim April10, 2018 claim Issuance of April 3, 2019 April 8, 2019 TCC *April 6, 2019 was a Saturday, the next March 28, 2019 business dav was Aoril8, 2019, Mondav June 14, 2020 July 1, 2020 *the original deadline *the period of filing of April 10, 2020 was petitions falling due extended by RR Nos. from March 15 - 10-2020 (until May 31, April 15, 2020 was 2020) and 11-2020 extended by (until June 14, 2020) Supreme Court Administrative Circular (AC) No. 31 -2020 for 30 days counted from April 16, 2020 and further extended for 30 days from June 1' 2020 by Supreme Court AC No. 39-2020. Plainly, petitioner's administrative claim filed on March 28, 2019 and judicial claim filed on April 3, 2019 were made within the two (2)- year prescriptive period in accordance with Sections 204(C) and 229 of the NIRC, as amended . Hence, petitioner satisfied the first requisite for claims for issuance of TCC. Respondent's assertion that petitioner failed to exhaust administrative remedies since he was not given ample time to review the subject refund application deserve scant consideration . The Supreme Court has previously rejected such assertion and noted that the controversy is a result of the silence or insufficiency of Section 229 of the NIRC, as amended, on the period for the CIR to decide refund claims, which can only be addressed by appropriate legislation . In Commissioner of Internal Revenue vs. Carrier Air Conditioning Philippines, Inc. (Carrier Air Conditioning) ,56 reiterating the pronouncements in CBK Power Company Limited vs. Commissioner of Internal Revenue (CBK Power Company),57 the Supreme Court En Bane rejected the CIR's submission that the doctrine of exhaustion of administrative remedies was violated when it had barely ten (10) days to review the taxpayer's application for refund prior to the filing of its judicial claim for refund . The Supreme Court categorically held that from the plain language of Section 229 of the NIRC , as amended, it does not matter how far apart the administrative and judicial claims ss G.R. No . 226592, July 27, 2021 . " G.R. Nos. 193383-84 and 193407-08, January 14, 2015~

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 were filed, or whether the CIR was actually able to rule on the administrative claim, so long as both claims were filed within the two (2)-year prescriptive period . The Supreme also stated that the CIR's plea for ample time to decide refund claims cannot be addressed by judicial pronouncement but by an appropriate legislation, viz .: "The sole issue for this Court's resolution is whether or not the Court of Tax Appeals erred in granting respondent Carrier Air Conditioning Philippines, Inc.'s judicial claim, instead of dismissing the Petition on the grounds of violation of the doctrine of exhaustion of administrative remedies and lack of cause of action. XXX XXX XXX Hence, applying the ruling in CBK Power Company, this Court finds proper respondent's filing of judicial claim 10 days after it had filed its administrative claim, even without petitioner's ruling. The judicial claim was timely filed within the two-year prescriptive period based on the plain language of Section 229 of the 1997 National Internal Revenue Code. Ill A closer reading of Sections 204 and 229 of the 1997 National Internal Revenue Code, in conjunction with Section 7 of Republic Act No. 9282, reveals a problem of what is considered a "reasonable period" for the Commissioner of Internal Revenue to act on a claim for refund of taxes. Section 229, which requires a prior administrative claim before a judicial claim is filed , recognizes the Commissioner of Internal Revenue's primary jurisdiction to decide refunds of internal revenue taxes. It gives the Commissioner "an opportunity to consider [their] mistake, if mistake has been committed, " or to investigate and ascertain the veracity of the claim, before they are sued . This Court in CBK Power Company, citing P.J. Kiener, held that the primary purpose of filing an administrative claim is to serve as a notice or warning to the Commissioner that court action would follow unless the tax or penalty is refunded . This necessarily implies that the Commissioner has sufficient time to examine, evaluate, and act on the matter within their jurisdiction. On the other hand , Section 7 of Republic Act No. 9282 grants the Court of Tax Appeals exclusive appellate jurisdiction over a decision or "inaction deemed denial" of the Commissioner in a claim for refund. Under its clear wording , the Court of Tax Appeals can take cognizance of appeals in cases of the Commissioner's "inaction" only where the 1997 National Internal Revenue Code specifically provides a period for the Commissioner to act on a claim for refund. However, unlike in claims for refund of input value-added tax, the 1997 National Internal Revenue Code does not prescribe a specific ()!

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 period within which the Commissioner must resolve the claim for refund or credit of erroneously paid taxes. Sections 204 and 229 fixed the same period of two years for filing an administrative claim for refund before the Bureau of Internal Revenue and to sue before the Court of Tax Appeals. CBK Power Company explained that as long as these two acts fall within the two- year period , there is no legal impediment to the judicial claim for refund . Consequently, from the plain language of the law, it does not matter how far apart the administrative and judicial claims were filed, or whether the Commissioner of Internal Revenue was actually able to rule on the administrative claim, so long as both claims were filed within the two-year prescriptive period. Thus, in CBK Power Company, as with subsequent cases, this Court upheld the propriety of the taxpayer's judicial claim instituted as early as five and 13 days after the administrative claim had been filed , on the ground that both claims were filed within the two-year prescriptive period . The Court of Tax Appeals likewise allowed judicial claims filed simultaneously, or one to 28 days from the administrative claim's filing , on the same ground that both claims were filed within the two- year prescriptive period. In much earlier cases, however, it was the Commissioner who was considered long delayed in resolving the administrative claims. Hence, this Court has held that the taxpayer need not wait for the Commissioner's decision , and may file its judicial claim when the two-year prescriptive period is about to lapse. For instance, in P.J. Kiener, the taxpayer filed its administrative claim for refund four months after the last payment of the tax sought to be refunded . Yet, the then Collector of Internal Revenue took their time- more than two years-to decide on the claim, so much so that when the taxpayer filed its appeal, its action had already prescribed. This Court held : "Having filed his claim and the Collector of Internal Revenue having had ample time to study it, the claimant may, indeed should, within the statutory period of two years proceed with his suit without waiting for the Collector's decision ." In Collector of Internal Revenue v. Court of Tax Appeals and Hume Pipe & Asbestos Co., Inc. , this Court deemed two months as ample time for the Collector to have decided the claim for refund of overpaid income tax. Hence, in that case, it upheld the taxpayer's filing of a petition for review before the Court of Tax Appeals without waiting for the Collector's decision, since the two-year prescriptive period was already about to expire. In Commissioner of Customs and Commissioner of Internal Revenue v. The Honorable Court of Tax Appeals and Planters Products, Inc., eight months and 10 days had lapsed from the ~

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 taxpayer's filing of an administrative claim , but the Commissioner had not acted on it. Ruling in the taxpayer's favor, this Court, quoting a ruling of the tax court, said : The taxpayer need not wait indefinitely for a decision or ruling which may or may not be forthcoming and which he has no legal right to expect. It is disheartening enough to a taxpayer to keep him waiting for an indefinite period of time for a ruling or decision of the Collector [(now Commissioner)] of Internal Revenue on his claim for refund . It would make matters more exasperating for the taxpayer if we we re to close the doors of the courts of justice for such a relief until after the [Commissioner], would have, at his personal convenience, given his go signal. In these cases, the written claim for refund was duly filed at the administrative level, but the claim had not been acted upon by the Commissioner (then Collector) of Internal Revenue. Since the two-year period was about to lapse, the taxpayer was held justified in filing its judicial claim, without waiting for the Commissioner's decision, to protect its interest. Otherwise, should the Commissioner render an adverse decision after the two-year period , the taxpayer would be barred , to its prejudice, from pursuing its appeal to the Court of Tax Appeals. These cases show that the lack of a specific period fixed by the law within which the Commissioner must decide the claim has led to delays, to the taxpayer's prejudice. On the other hand, there were instances when the Commissioner was deprived of the opportunity to act on the matter within their jurisdiction because of the short interval between the filing of the administrative claim and the filing of the judicial claim. This is so because the law merely provides two years for a taxpayer to file the administrative claim and judicial claim, with the former required to be filed first. Nonetheless, the silence or insufficiency in the law on the reasonable period for the Commissioner's action is one that can be addressed not by judicial pronouncement, but by appropriate legislation." (Boldfacing added) Carrier Air Conditioning decidedly establish that Section 229 of the NIRC, as amended, does not require the CIR to resolve a claim for refund or credit of erroneously paid taxes within a specific period. It also does not matter how far apart the administrative and judicial claims were filed within the two (2)-year prescriptive period. In the case at bar, with respect to petitioner's refund claim covering CY 2016, had petitioner awaited the action of respondent/SIR ~

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 on its claim for refund prior to taking court action knowing fully well that the prescriptive period was about to end, it would have lost not only its right to seek judicial recourse but its right to recover its excess and unutilized CWTs erroneously paid to the government thereby suffering irreparable damage. For petitioner's refund claim covering CY 2017, that was to prescribe in 2020, while it may be argued that petitioner could have waited for the SIR to act on it, the Court cannot, on that basis alone, deny a legitimate claim timely filed in accordance with Section 229 of the NIRC, as amended. Applying Carrier Air Conditioning and the undisputed fact that petitioner filed its administrative claim before appealing to the CTA within the two (2)-year prescriptive period , the Court rules that petitioner did not violate the doctrine of exhaustion of administrative remedies. To give the CIR a period to decide the administrative claim for refund would go beyond the clear language of Section 229. This matter can be addressed by appropriate legislation , as prescribed by the Supreme Court in Carrier Air Conditioning. Second Requisite: Fact of withholding was established by copies of withholding statements duly issued by the payor As held by the Supreme Court in the case of Commissioner of Internal Revenue vs. Philippine National Bank (PNB), 58 the certificate of creditable tax withheld at source (CWT certificate) is the competent proof to establish the fact that taxes are withheld , and it is not even necessary for the person who executed and prepared the CWT certificate to be presented and to testify personally to prove the authenticity of the certificates. Contrary to respondent's argument that petitioner must prove the actual remittance of the taxes withheld , PNB categorically ruled that proof of actual remittance is not a condition to claim for refund of unutilized tax credits, viz .: sa G.R. No. 180290, September 29, 2014{JJ

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 "Petitioner's posture that respondent is required to establish actual remittance to the Bureau of Internal Revenue deserves scant consideration . Proof of actual remittance is not a condition to claim for a refund of unutilized tax credits. Under Sections 57 and 58 of the 1997 National Internal Revenue Code, as amended , it is the payor-withholding agent, and not the payee-refund claimant such as respondent, who is vested with the responsibility of withholding and remitting income taxes. This court's ruling in Commissioner of Internal Revenue v. Asian Transmission Corporation, citing the Court of Tax Appeals' explanation, is instructive: ... proof of actual remittance by the respondent is not needed in order to prove withholding and remittance of taxes to petitioner. Section 2.58.3 (B) of Revenue Regulation No. 2-98 clearly provides that proof of remittance is the responsibility of the withholding agent and not of the taxpayer-refund claimant. It should be borne in mind by the petitioner that payers of withholding taxes are by themselves constituted as withholding agents of the BIR. The taxes they withhold are held in trust for the government. In the event that the withholding agents commit fraud against the government by not remitting the taxes so withheld, such act shou ld not prejudice herein respondent who has been duly withheld taxes by the withholding agents acting under government authority. Moreover, pursuant to Sections 57 and 58 of the NIRC of 1997, as amended , the withholding of income tax and the remittance thereof to the BIR is the responsibility of the payor and not the payee. Therefore, respondent .. . has no control over the remittance of the taxes withheld from its income by the withholding agent or payor who is the agent of the petitioner. The Certificates of Creditable Tax Withheld at Source issued by the withholding agents of the government are prima facie proof of actual payment by herein respondent- payee to the government itself through said agents." (Boldfacing added) To assist the Court in the validation of the CWT certificates offered in evidence by petitioner, the Court-commissioned ICPA examined such CWT certificates and was able to trace petitioner's revenues totalling P1,734,170,654.2459 which was subjected by its customers to CWT amounting to P212,931,583.21.60 The Court sustains the ICPA's findings, subject to the disallowances as discussed hereunder. 59 P765,114,105.05 for CY 201 6 (Exhibit P-15) +P969,056, 549 .19 for CY 201 7 (Exhibit P-16). so P95,994,334.66 for CY 2016 (Exhibit P-1 5) + P 11 6,937,248. 55 for CY 2017 (Exhibit P-16). rJ1

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 Upon further evaluation, the Court determined that the CWTs claimed by petitioner amounting to P503,853.50 were unsupported by CWT Certificates, as follows: CY 2016 Period Payor's Name CWT 2016 Directors' Fees 4th Quarter Ayala Land Inc. p 30,000.00 2nd Quarter Pilipinas Shell Petroleum Corporation 3,000.00 3rd Quarter Pilipinas Shell Petroleum Corporation 13,235.29 Subtotal- 2016 Directors' Fees p 46,235.29 2016 Other Income 3'd Quarter Asiacom Philippines Inc. p 81 .56 Subtotal- 2016 Other Income fD 81 .56 2016 Interest Income - Taxable- Miscellaneous 1st Quarter Honda Cars Makati, Inc. (AiabanQ Branch) fD 1,582.14 3rd Quarter Honda Cars Makati, Inc. (Aiabang Branch) 668.48 3rd Quarter Honda Cars Makati, Inc. (Aiabang Branch) 413.62 1st Quarter Honda Cars Makati, Inc. 993.79 2nd Quarter Honda Cars Makati, Inc. 1,199.92 2nd Quarter Honda Cars Makati, Inc. 1,220.43 2nd Quarter Honda Cars Makati, Inc. 999.64 3rd Quarter Honda Cars Makati, Inc. 841.00 3rd Quarter Honda Cars Makati, Inc. 674 .85 3rd Quarter Honda Cars Makati, Inc. 506.39 3rd Quarter Honda Cars Makati, Inc. 297.17 1st Quarter Honda Cars Makati, Inc. (PasiQ Branch) 1,296.72 2nd Quarter Honda Cars Makati, Inc. (Pasig Branch) 937.20 2nd Quarter Honda Cars Makati, Inc. (PasiQ Branch) 945 .88 2nd Quarter Honda Cars Makati, Inc. (Pasig Branch) 818.78 3rd Quarter Honda Cars Makati, Inc. (Pasig Branch) 978.02 3rd Quarter Honda Cars Makati, Inc. (Pasig Branch) 733.73 3rd Quarter Honda Cars Makati, Inc. (Pasig Branch) 555.91 3rd Quarter Honda Cars Makati , Inc. (Pasig Branch) ,,.. 362.39 16,026.06 Subtotal- 20161nterest Income- Taxable- Miscellaneous 62,342.91 Total Income Payments with no CWT Certificates- 2016 CY 2017 Peri od Payor's Name CWT 2017 Rent Income ,. 4th Quarter Globe Telecoms Inc. 6,234.47 3rd Quarter lsuzu Cebu Inc. - Mandaue Branch 118,581 .63 4th Quarter Premium Petrol 53,201 .66 Subtotal- 201 7 Rent Income p 178,017.76 2017 Directors' Fees

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 2nd Quarter BPI Globe Banko Inc., A Savings Bank p 4,500.00 4th Quarter Pilipinas Shell Petroleum Corporation 11,250.00 4th Quarter Pilipinas Shell Petroleum Corporation 37 ,500.00 4th Quarter Pilipinas Shell Petroleum Corporation 45,000.00 4th Quarter Pilipinas Shell Petroleum Corporation 45 ,000.00 4th Quarter Pilipinas Shell Petroleum Corporation 30 ,000 .00 Subtotal- 2017 Directors' Fees p 173,250.00 2017 Other Income 4th Quarter AC Automotive Business Services p 2,544.48 4th Quarter AC Education Inc. 7,641 .22 4th Quarter AC Energy Holdings Inc. 67 ,119.83 4th Quarter Liveit Investments Ltd. - Philippine ROHQ 8,106.96 4th Quarter Sonoma Services Inc. 4 ,830.34 Subtotal- 2017 Other Income ,p . 90,242 .83 441,510.59 Total Income Payments with no CWT Certificates . 2017 Moreover, for CY 2016, the following CWTs from petitioner's customer "Bank of the Philippine Islands" were being erroneously claimed twice by petitioner: Period Payor's Name Income Payment CWT 2nd Quarter Bank of the Philippine Islands 2nd Quarter Bank of the Philippine Islands p 17,857.14 p 3,000.00 . 17 ,857 .14 3,000.00 35,714.28 Total Erroneous Double Claim p 6,000.00 The aforementioned CWTs were traced to Official Receipts (OR) marked as Exhibit Nos. "P-31-179", "P-31-180", "P-31-181 ", and "P-31- 182", and CWT Certificate marked as Exhibit "P-17-143", all showing payment by "South Luzon Thermal Energy Corporation". When traced to petitioner's General Ledger (GL) account, they were erroneously recorded therein as payments from "Bank of the Philippine Islands". Such amounts were already claimed by petitioner under "South Luzon Thermal Energy Corporation", as shown below: CY 2016 Period Payor's Name Income CWT Exhibit Payment 2nd Quarter South Luzon Thermal Energy Corporation p 8,928.57 p 1,500.00 "P-17-143" 2nd Quarter South Luzon Thermal Energy Corporation 8 ,928.57 1,500.00 "P-17-143" 1,500.00 "P-17-143" 2nd Quarter South Luzon Thermal Energy Corporation 8 ,928.57 1,500.00 "P-17-143" 2nd Quarter South Luzon Thermal Energy Corporation Total ,. 8,928.57 ,. 6,000.00 35,714.28

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 Additionally, it was also noted that the payee's TIN in the CWT certificate marked as Exhibit "P-17-196" was handwritten without authorized countersignature. Likewise, the payee's TIN in the CWT certificate marked as Exhibit "P-18-217" was not indicated: Exhibit I Customer CWT CWT certificate with payee's handwritten TIN without authorized countersionature (CY 2016) "P-17-196" I North Luzon Renewable Energy Corp. p 7,722.72 CWT certificate without payee's TIN (CY 2017) "P-18-217" I North Luzon Renewable Enerov Coro. 7,002.72 Total Invalid CWTs ~ 14,725.44 In sum, the total disallowances stand at P524,578.94 for CYs 2016 and 2017: Disallowances Amount Total Not supported by CWT CY 2016 CY 2017 certificates Erroneous double claim p 62,342.91 p 441,510 .5 9 p 503 ,853 .50 Invalid CWTs Total Disallowances 6,000 .0 0 - 6 ,000 .00 7,722.72 7 ,002 .72 14,725.44 ~ 76,065.63 ~ 448,513.31 ~ 524,578.94 Deducting the foregoing total disallowance from petitioner's claim leaves a balance of P212,407,005.06 for CYs 2016 and 2017, which may be refunded , viz .: Particulars Amount Total Petitioner's Claim CY 2016 CY 2017 p 212,931 ,584.00 Less: Court Disallowances 524,578.94 Total Valid Claim p 95,994,335.00 p 116,937,249.00 ~ 212,407,005.06 76 ,065 .6 3 448,513.31 ~ 95,918,269.37 ~ 116,488,735.69 Third Requisite: The income was received declared as part of the gross income The CWT certificates show that the claimed CWTs for CYs 2016 and 2017 were withheld on income payments of P765,114,1 05.05 and P969,056,549.19, respectively. These amounts were part of the gross sales/revenues/receipts reported by petitioner in its Annual ITRs for CYs 2016 and 2017 amounting to P991,933,606.00 and P1 ,177,582,51 0.00, respectively. (Jt1

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 The revenue sections in the Statements of Comprehensive Income of petitioner's Audited Financial Statements for CYs 201661 and 201762 show the breakdown of sales/revenue/receipts/fees reflected in its CYs 2016 and 2017 Annuai iTRs, as follows: Particulars p ,. CY 2016 CY 2017 (1) Sale of Goods/Properties 4,944,491 .00 5,874 .845.00 Sale of Services: Toll Reven ues 148 ,971,7 13.00 178,464,133.00 (2) Director's Fees 37,186 ,817.00 39 ,022 ,321.00 (3) Other Income 6 15 ,294 ,020 .0 0 682 566 ,857.00 (4) Lease of Properties 183 ,963, 183 .0 0 271 ,654 ,353.00 (5) Interest Income not subjected to 1,573 ,382 .00 - Final Withholding Tax ~ 991 ,933,606.00 Total ~ 1 177,582 510.00 The relevant income payments for CYs 2016 and 2017 amounted to P765,114,105.05 and P969,056,549.19. Said amounts are claimed to be part of the revenues from : (1) Sale of Goods/Properties; (2) Director's Fees; (3) Other Income; (4 ) Lease of Properties; and (5) Interest Income, in the total amount of P842 ,961 ,893.00 and P999,118,183.76, for CYs 2016 and 2017, respectively. To prove that the income payments were part of the P842,961 ,893.00 and P999,118,183.76 reported income for CYs 2016 and 2017, respectively, petitioner submitted its Gls for Rental lncome63, Director's Fees64, Other lncome65, and Proceeds of Sale of Other Assets66 for CYs 2016 and 2017, and Interest lncome-Taxable- Miscellaneous67 and Proceeds of Sale of Land68 for CYs 2016 and 2017, respectively. Upon evaluation of the aforementioned Gls, the Court has determined that petitioner sufficiently showed that the income payments upon which the claimed CWTs were based were reported as part of the gross income in its ITRs. The Court, however, noted that the CWTs in the total amount of P29,037,457.5269 were erroneously computed based on income 61 Exhibit "P-33". 62 Exhibit "P-34". 63 Exhibit "P-19" and "P-24" for CYs 2016 and 2017. 64 Exhibit "P-20" and "P-25" for CYs 2016 and 2017. 65 Exhibit "P-21 " and "P-26" for CYs 2016 and 2017. 66 Exhibit "P-22" and "P-28" for CYs 2016 and 2017. 67 Exhibit "P-23" for CY 2016. 6s Exhibit "P-27" for CY 2017. 69 P21 ,537,619.07 for CY 2016 + f!t7,499,838.45 for CY 201 7.(11

DECIS ION Ayala Corporation vs. Commissioner of Internal Revenue ,_ CTA Case No. 10056 payments inclusive of VAT, thus, the CWTs are overstated . As such, the corresponding CWTs shall be reduced by P3,111 ,447.10,70 us1ng the correct tax base for withholding, computed as follows: CY 2016 Exhibit No. Payor's per CWT Income Payment Difference per CWT CWT Difference Name Ce r ti f i c a t e pe r G L Certificate per G L71 2016 Director's Fees ~ 15,000.00 ~ 13,392.86 ~ 1,607.14 ~ 2,250.00 ~ 2,008.93 ,. ALFM Dollar 241 .07 Bond Fund 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.71 P-17-50 Inc. 5,000.00 8,928.57 (3,928.57) 750.00 ALFM Dollar 4,464.29 1,339.29 -589.29 Bond Fund 10,000.00 5,535.71 1,500.00 669.64 830.36 P-17-51 Inc. ALFM Dollar 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.71 Bond Fund 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.7 1 P-17-52 Inc. ALFM Dollar 7,500.00 6,696.43 803.57 1' 125.00 1,004.46 120.54 Bond Fund 2,500.00 2 232.14 267.86 375.00 334.82 40.18 P-17-53 Inc. ALFM Dollar 5,000.00 4,464 .29 535.71 750.00 669.64 80.36 Bond Fund 15,000.00 13,392 .86 1,607.14 2,250.00 2 ,008 .93 241.07 10,000.00 1,071.43 1,500.00 1,339.29 160 .7 1 P-17-54 Inc. 8,928.57 5,000.00 4,464.29 535.71 750 .0 0 669.64 80.36 ALFM Dollar 10,000.00 8 ,928 .57 1,071.43 1,500 .0 0 1,339.29 160.71 Bond Fund 10,000.00 8 ,928 .57 1,071.43 1 500.00 1,339 .29 160.71 P-17-55 Inc. 10,000.00 8 928.57 1,071.43 1,500.00 1,339 .29 160.71 ALFM Euro 7 ,500 .0 0 6 ,696.43 803.57 1,125.00 1,004.46 120.54 Bond Fund P-17-56 Inc. 2 .500 .0 0 2,232 .14 267 .86 375.00 334.82 40.18 5,000.00 4,464.29 535.71 750.00 A LFM Euro 45,000.00 40,178.57 4,82 1.43 6,750.00 669.64 80.36 Bond Fund 30,000.00 26,785.71 3 ,214 .2 9 4,500.00 P-17-57 Inc. 6,026.79 723.21 ALFM Euro Bond Fund 4 ,0 17.86 482 .14 P-17-58 Inc. ALFM Growth P-17-59 Fund Inc. ALFM Growth P-17-60 Fund Inc. ALFM Growth P-17-61 Fund Inc. ALFM Growth P-17-62 Fund Inc. ALFM Growth P-17-63 Fund Inc. ALFM Growth P-17-64 Fund Inc. ALFM Money Market Fund P-17-65 Inc. ALFM Money Market Fund P-17-66 Inc. ALFM Money Market Fund P-17-67 Inc. ALFM Peso Bond Fund P-17-68 Inc. ALFM Peso Bond Fund P-17-69 Inc. elf 70 P2,307,892.97 for CY 2016 + P803,554.13 for CY 2017. 71 Court's own computation .

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 P-17-70 ALFM Peso 15,000.00 13,392.86 1,607 .14 2 ,250 .0 0 2,008 .9 3 241 .07 Bond Fund P-17-7 1 Inc. 30,000.00 26 785.71 3 ,214 .29 4 ,500.00 4 ,0 17.86 482.14 P-17-72 ALFM Peso 30,000.00 26,785.71 3,214.29 4 ,500.00 4 ,0 17 .86 482 . 14 P-17-73 Bond Fund P-17-74 Inc. 30,000.00 26,785.71 3,2 14.29 4 ,500.00 4 ,017 .8 6 482.1 4 P-17-75 600,000.00 535,71 4.29 64,285.71 90,000.00 8 0 ,357 .14 9 ,642 .86 P-17-76 ALFM Peso 3,000,000.00 2,678,571.43 321,428.57 450 ,000 .0 0 4 0 1,785 .7 1 48,214.29 P-17-77 Bond Fund 600,000.00 535 ,714 .2 9 64,285.71 90,000.00 80,357.14 9 ,642 .86 P-17-78 Inc. 600,000.00 535,714.29 64,285.71 90,000.00 80,357.14 9 ,642 .86 P-17-79 ALFM Peso 100,000.00 10,714.29 15,000.00 13,392.86 1,607 .14 P-17-80 Bond Fund 100 ,000 .00 89,285.71 10,714.29 15 000.00 13,392.86 1,607 .14 P-17-81 Inc. 200 ,000 .00 89,285.71 21 ,428.57 30,000.00 26,785.71 3 ,214 .29 P-17-82 Ayala Land 400 ,000.00 178 ,571.43 42,857.14 60,000.00 53,571.43 6,428.57 P- 17-83 Inc. 600 ,0 0 0.0 0 357,1 42.86 64,285.71 90,000.00 8 0 ,357 .14 9,642.86 P-17-84 100,000.00 535 ,714 .29 10,7 14.29 15,000.00 13,392 .86 1,607 .14 P-17-85 Ayala Land 100,000.00 8 9 ,285 .7 1 10,714 .29 15,000.00 13,392 .86 1,607 .14 P-17-86 Inc. 200,000.00 89,285.71 2 1,4 2 8.57 30,000.00 26,785.71 3 ,214 .2 9 100,000.00 178,571.43 10,714 .29 15,000.00 13,392.86 1,607.14 P-17-87 Ayala Land 8 9 ,285 .7 1 P-17-88 Inc. 260 ,000 .0 0 232 ,142 .86 27 ,857 .14 39,000.00 34,821.43 4,178.57 P- 17-90 Ayala Land 19,285.71 27 ,000 .00 24,107.14 2,892. 86 Inc. 180,000.00 160,7 14.29 P- 17-89 Ayala Land P-17-91 Inc. 440,000.00 392,857.14 47 ,142.86 66,000.00 58 928.57 7,071.43 Ayala Land P-17-92 Inc. 5,600,000.00 5,000,000.00 600,000.00 840,000.00 750,000.00 90,000.00 Ayala Land 52,500.00 73,500.00 65,625.00 7,875.00 P-17-93 Inc. 490,000.00 437,500.00 3 1, 071.43 43,500.00 38,839.29 4 ,660 .71 P-1 7-94 24,642.86 34,500.00 30,803.57 3,696.43 Aya la Land 290,000.00 258,928.57 17,142.86 24,000.00 21 ,428.57 2,571.43 P- 17-95 Inc. 230,000.00 205,357.14 160,000.00 142 857.14 P-17-96 Ayala Land Inc. 350,000 .0 0 312 ,500 .0 0 37,500.00 52 ,500.00 46,875.00 5,625.00 P-17-97 Ayala Land 290 ,000 .00 258 ,928 .57 P-17-98 Inc. 31 ,071.43 43,500.00 38,839.29 4 ,660 .71 250,000.00 223 ,214 .29 26,785.71 37 ,500 .00 33,482.14 4 ,017 .86 Ayala Land 4 40 ,000.00 392 ,857.14 47 ,142.86 66,000.00 58,928.57 7,071.43 Inc. Ayala Land Inc. Ayala Land Inc. Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands Bank of the Philippine Islands

DEC ISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 P-17-99 Bank of the 350,000.00 312,500.00 37,500.00 52,500.00 46,875.00 5,625.00 Philippine P-17-100 Islands 30,000.00 26,785.71 3,214.29 4,500.00 4,017.86 482.14 P-17-101 20,000.00 17,857.14 2,142.86 3,000.00 2,678.57 321.43 P-17-103 BPI Asset 20,000.00 17,857.14 2,142.86 3,000.00 2,678.57 321.43 P-17-102 Management 30,000.00 26,785.71 3,214.29 4,500.00 4,017.86 482.14 P-17 - 104 & Trust 20,000.00 17 857.1 4 2,142.86 3,000.00 2,678.57 321.43 P-17-105 Corporation 20,000.00 17,857.14 2,142.86 3,000.00 2,678.57 321.43 P-17-106 BPI Capital 20,000.00 17,857.14 2,142.86 3,000.00 2,678.57 321.43 P-17-107 Corp. 20,000.00 17,857.14 2,142.86 3,000.00 2,678.57 321.43 P- 17-108 40,000.00 35,714.29 4,285.71 6,000.00 5 ,357 .14 642.86 P-17-109 BPI Capital 17,857.14 2,142.86 3,000.00 2,678.57 321.43 P-17-110 Corp. 20,000.00 17,857.14 2,142.86 3,000.00 2,678.57 321.43 P-17-111 BPI Capital 20,000.00 35 ,7 14.29 4,285.71 6,000.00 5,357.1 4 642.86 P-17-112 Corp. 40,000.00 80,357.14 9,642.86 13,500.00 12,053.57 1.446.43 90,000.00 P-17-113 BPI Capital 17,857.14 2,142.86 3,000.00 2,678.57 321.43 P-17-114 Corp. 20,000.00 2,142.86 3,000.00 2 ,678.57 321.43 P-17-115 17,857.14 4,285.71 6 ,000 .0 0 5,357. 14 642.86 P-17-116 BPI Capital 20,000.00 35,714.29 2,142.86 3,000.00 2 ,678.57 321.43 P-17-1 18 Corp. 40,000.00 17,857.14 4,285.7 1 6,000.00 5,357 .14 642.86 P-17-117 BPI Capital 20,000.00 35,714.29 4 ,285 .71 6 ,000.00 5,357.14 642.86 P-17-119 Corp. 40,000.00 35,714 .2 9 3,857.14 5,400.00 4,821.43 578.57 P-17-120 BPI Capital 40,000.00 32,142.86 6,428.57 9 ,000.00 8,035 .71 964.29 P-17-121 Corp. 36,000.00 53,571.43 5,785.71 8,100.00 7,232.14 867.86 P-17-1 22 BPI Family 60,000.00 48,214.29 3,857.14 5,400.00 4,82 1.43 578.57 P-17-123 Savings Bank 54,000.00 32,142.86 53,571.43 75,000.00 66,964.29 8,035.71 P-17-124 Inc. 36,000.00 446,428.57 42,857.14 60,000.00 53,571.43 6,428.57 P-17-125 500,000.00 357,142.86 64,285.71 90,000.00 80,357. 14 9,642.86 P-17-126 BPI Family 400,000.00 535,714.29 53,571.43 75,000.00 66,964.29 8,035.71 Savings Bank 600,000.00 446,428.57 Inc. 500,000.00 BPI Family Savings Bank Inc. BPI Family Savings Bank Inc. BPI Family Savings Bank Inc. BPI Family Savings Bank Inc. BPI Family Savings Bank Inc. BPI Family Savings Bank Inc. BPI Family Savings Bank Inc. BPI Family Savings Bank Inc. BPI Family Savings Bank Inc. BPI Globe Banko Inc. BPI Globe Banko Inc. BPI Globe Banko Inc. BPI Globe Banko Inc. Integrated Microelectroni cs Inc Integrated Microelectroni cs Inc Integrated Microelectroni cs lnc Integrated Microelectroni cs Inc

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 P-17-127 Integrated 400 ,000.00 357,142.86 42,857 .14 60,000.00 53,571.43 6,428.57 P-17-128 Microelectroni cs Inc 400,000.00 357 ,142 .86 42,857. 14 60,000.00 53,571.43 6,428 .57 Integrated 50,000.00 44,642.86 5,357.14 7,500.00 6,696.43 803 .57 Microelectroni 50,000.00 44,642 .8 6 5,357.14 7,500.00 6,696.43 803 .57 cs Inc 1,625,000.00 1,450,892 .8 6 174,107.14 243,750.00 217,633.93 26,116.07 P-17-129 MWCI 1,800 ,000.00 1 ,607,142 .8 6 192 ,857 .14 270,000.00 241,071.43 28,928.57 1,300,000.00 1,160,714.29 139,285.71 195,000.00 174,107.14 20,892.86 P-17-129 MWCI 150,000.00 133,928.57 16,071.43 22,500.00 20,089.29 2,410.71 P-17-129 MWCI 1,625,000.00 1,450 ,892.86 174,107.14 243,750.00 217 ,633.93 26,116.07 1,6 25 ,000.00 1,450,892.86 174,107.14 243 ,7 50.00 217,633.93 26,116.07 P-17-130 MWCI 1 '125,000.00 1 ,004,464.29 120,535.71 168,750.00 150,669.64 18,080.36 P-17-131 MWCI 50,000.00 44,642.86 5,357. 14 7,500.00 6,696.43 803.57 P-17-132 MWCI P-17-133 MWCI P-17-134 MWCI P-17-135 MWCI P-17-1 36 MWCI 250,000.00 223,214.29 26,785.71 37,500.00 33,482.14 4,017.86 P-17-137 P-17-137 Pilipinas Shell 40,000.00 35,714.29 4,285. 71 6,000.00 5,357.14 642.86 P-17-139 Petroleum P- 17-139 Corporation 75,000.00 66,964.29 8,035.7 1 11 ,250.00 10,044.64 1,205.36 P-17-140 P-17-141 Pilipinas Shell 250,000.00 223,214.29 26,785.71 37, 500.00 33,482.14 4,017.86 P-17-142 Petroleum P-17-143 Corporation 15,000.00 13,392.86 1,607.1 4 2,250.00 2,008.93 241 .07 P-17-144 Pilipinas Shell P-1 7-144 Petroleum 5,000.00 4,464.29 535.71 750.00 669.64 80.36 P-1 7-144 Corporation P-17-144 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.7 1 P-1 7-146 Pilipinas Shell P- 17-14 7 Petroleum 40,000.00 35,7 14.28 4,285.72 6,000.00 5,357. 14 642.86 P-17- 145 Corporation 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160 .71 Ph ilippine 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.7 1 Stock Index Fund 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.7 1 Philippine 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.7 1 Stock Index Fund 10,000.00 8 ,928 .57 1,07 1.43 1,500.00 1,339.29 160.7 1 20,000.00 17,857. 14 Philippine 2, 142.86 3 ,000.00 2,678.57 321.43 Stock Index Fund 10,000.00 8,928 .57 1,071.43 1,500.00 1,339.29 160.71 South Luzon Thermal Energy Corporation South Luzon T he rmal Energy Corporation South Luzon Thermal Energy Corporation South Luzon Thermal Energy Corporation South Luzon Thermal Energy Corporation South Luzon Thermal Energy Corporation South Luzon Thermal Energy Corporation South Luzon Thermal Energy Corporation

DECIS ION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 South Luzon 20,000.00 17,857.14 2,142 .86 3,000.00 2,678.57 321.43 Thermal Energy 30,000.00 26 785.71 3,2 14.29 4 ,500.00 4,017 .8 6 482 .14 P-17-148 Corporation ,. 30 131 000.00 ,. 26 902 678.59 ,. ,. 3 228 321.41 ,. 4 519 650.00 ,. 4 035 401 .79 484 248.21 South Luzon Thermal Energy P-17-149 Corporation Subtotal- 2016 Directors' Fees 2016 Other Income ,. 36,333,000.00 ,. 32 440 178.57 ,. ,. 3,892,821.43 ,. 5,449,950.00 ,. 4 866,026.79 583,923.21 36,334 000.00 32 441 071.43 Bank of the 3,892,928.57 5,450,100.00 4,866,160.71 583,939.29 Philippine P-17-172 Islands 6 ,500,000.00 5 803 571.43 696,428.57 975 ,000.0 0 870 ,535 .71 104,464.29 Globe P-17-178 Telecoms Inc. 34,171 ,568.13 30,510,328.69 3,661 ,239.44 5,125,735.22 4,576,549.30 549,185.92 Integrated P113,338,568.13 P1 01 195 150.12 P12,143,418.01 P17,000,785.22 P15.179,272.52 P1 ,821,512.70 Microelectroni P-17-184 cs Inc Integrated Microelectroni P-17-186 cs Inc Subtotal- 2016 Other Income 2016 Interest Income - Miscellaneous Honda Cars Makati, Inc. ,. ,. ,. 70,983.86 ,. ,. ,. 1,419.68 (Aiabang 79,501.92 62,919.89 8,518.06 1 590.04 1,258.40 170.36 P-17-202 Branch} 7,550.39 1,409.41 151 .01 66,813.82 8,017.66 1,336.28 Honda Cars 1,496.63 160.35 64 ,445.40 7,733.45 1,288.91 Makati, Inc. 65,434.01 7 ,852.08 1,443.58 1 ,3 08 .6 8 154.67 53,596.97 6,431 .64 1,465.72 1,071 .94 157 .04 (Aiabang 50 753.43 6,090.41 1,200.57 1,015.07 128.63 40,826.51 4,899.18 1,136.88 121 .81 P-17-202 Branch} 70,470.28 4 3,9 57 .64 5,274.92 816.53 39,542 .31 4,745.08 914.51 879.15 97.98 Honda Cars 41 281 .67 4,953.80 984.65 790.85 105.50 57, 177.42 885.75 825 .63 Makati, Inc. 6,861 .29 1,2 50 .5 4 1 143.55 94.90 53,575.21 6,429.03 1,280.77 1,071 .50 424.9 1 (Aiabang 4 ,953.8 1 1,200.09 825.63 137 .22 41 ,281 .69 128.59 P-17-202 Branch} 74,831.48 924 .7 1 99.08 Honda Cars Makati, Inc. (Aiabang P-17-203 Branch) 72,178.85 Honda Ca rs Makati, Inc. (Aiabang P-17-203 Branch} 73,286.09 Honda Cars Makati, Inc. (Aiabang P-1 7-203 Branch} 60,028.61 Honda Cars Makati, Inc. (Aiabang P-17-203 Branch) 56,843.84 Honda Cars Makati, Inc. (Ala bang 45,725.69 P-17-203 Branch}. Honda Cars P-17-205 Makati, Inc. 49,232.56 Honda Cars P-17-205 Makati, Inc. 44,287.39 Honda Cars P-17-205 Makati, Inc. 46,235.47 Honda Cars Makati, Inc. (Pasig 64,038.71 P-17-208 Branch) Honda Ca rs Makati, Inc. (Pasig 60,004.24 P-17-208 Branch) Honda Cars P-17-208 Makati, Inc. 46,235.50

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 (Pasig B ra n ch) Subtotal- 2016 Interest p 842,900.63 p 752,589.83 p 90,310.80 p 17,183.85 p 15,051.80 p 2,132.05 Income - Miscellaneous P144 312 468.76 P128 850 418.54 p 15 462 050.22 P21 ,537 619.07 P19 229,726.10 P2 307,892.97 Total- CY 2016 CY 2017 Exhibit No. Payor's per CWT Income Payment Difference perCWT CWT Difference Name Certificate perGL Certificate per GL72 2017 Directors' Fees ~ 30,000.00 ~ 26,785.71 ~ 3,214.29 ~ 4,500.00 ~ ,. 482.14 ALFM Peso Bond Fund 4,017.86 P-18-67 Inc. 15,000.00 13,392.86 1,607.14 2,250 .0 0 2,008.93 241.07 ALFM Peso 30,000.00 26,785.71 3,2 14.29 4,500 .0 0 4 ,017 .86 482 .14 Bond Fund 30,000.00 26,785 .71 3 ,2 14.2 9 4,500 .0 0 4 ,017 .86 482.14 P-18-68 Inc. 15,000.00 13,392.86 1,607.14 2 ,250.00 2,008.93 241.07 ALFM Peso Bond Fund 30,000.00 26,785.71 3,214 .2 9 4 ,500.00 4,017.86 482. 14 P-18-69 Inc. ALFM Peso 30,000.00 26,785.71 3,214.29 4 ,500.00 4 ,017.86 482. 14 Bond Fund P-18-70 Inc. 5,000.00 4,464.29 535 .71 750.00 669.64 80.36 ALFM Peso Bond Fund 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.71 P-18-71 Inc. 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.71 ALFM Peso Bond Fund 10,000.00 8 ,928 .57 1,071.43 1,500.00 1,339.29 160.71 P-18-72 Inc. 5,000.00 4,464.29 535.71 750.00 669 .64 80.36 ALFM Peso 10,000.00 8 ,928 .57 1,071.43 1,500.00 1,339.29 160. 71 Bond Fund P-18-73 Inc. 10,000.00 8,928.57 1,071.43 1 ,500 .0 0 1,339 .29 160.71 5,000.00 4,464.29 535 .71 750.00 669.64 80.36 ALFM Dollar 2,500.00 2,232.14 267.86 375.00 334.82 40.18 Bond Fund 5,000.00 4,464.29 535.7 1 750.00 669.64 80.36 P-18-74 Inc. 5,000.00 4,464.29 535 .71 750.00 669 .64 80 .36 ALFM Dollar 2,500 .00 2,232.1 4 267.86 375 .00 334 .82 40.18 Bond Fund P-18-75 Inc. ALFM Dollar Bond Fund P-18-76 Inc. ALFM Dollar Bond Fund P-18-77 Inc. ALFM Dollar Bond Fund P-18-78 Inc. ALFM Dollar Bond Fund P-18-79 Inc. ALFM Dollar Bond Fund P-1 8-80 Inc. ALFM Euro Bond Fund P-18-81 Inc. ALFM Euro Bond Fund P-18-82 Inc. ALFM Euro Bond Fund P-18-83 Inc. ALFM Euro Bond Fund P-18-84 Inc. ALFM Euro Bond Fund P-18-85 Inc. 01'1 " Court's own computation.

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 P-18-86 ALFM Euro 5,000.00 4,464.29 535 .71 750.00 669.64 80.36 P-18-87 Bond Fund 10,000.00 8,928.57 1,071.43 1,500.00 1,339.29 160.71 P-18-88 Inc. 4,464.29 P-18-89 5,000.00 8 928.57 535 .7 1 750.00 669.64 80.36 P- 18-90 ALFM Growth 10,000.00 8,928.57 1,071.43 1,500.00 1 339.29 160.7 1 P-18-91 Fund Inc. 10,000.00 4 464.29 1,071.43 1,500.00 1,339 .29 160.7 1 P-18-92 ALFM Growth 8,928.57 P-18-93 Fund Inc. 5 ,000 .0 0 8,928.57 535 .71 750.00 669 .64 80.36 ALFM Growth 10,000.00 1,071.43 1,500.00 1,339.29 160.71 P-18-94 Fund Inc. 10,000.00 1,071.43 1,500.00 1,339.29 160.71 ALFM Growth P-18-95 Fund Inc. 5 ,0 0 0 .0 0 4 ,4 6 4 .29 535.71 750.00 669.64 80.36 ALFM Growth P-18-96 Fund Inc. 2 500.00 2,232 .14 267 .86 375.00 334 .82 40.18 P-18-97 ALFM Growth 5,000.00 4,464.29 535 .71 750.00 669 .6 4 80.36 Fund Inc. P-18-98 5,000.00 4 464.29 535 .71 750.00 669.64 80.36 ALFM Growth P-1 8-99 Fund Inc. 2,500.00 2,232.14 267 .86 375.00 334 .82 40.1 8 P-18-100 P-18-101 ALFM Money 5,000.00 4,464.29 535.71 750.00 669.64 80.36 P-18-102 Market Fund 400,000.00 357,142.86 4 2 ,857 . 14 60,000.00 53,571.43 6,428.57 P-18-103 Inc. 100,000.00 10,714.29 15,000.00 13,392.86 1,607.14 P-18-104 ALFM Money 100,000.00 89,285.71 10,714.29 15,000.00 13,392.86 1,607.1 4 P-18-105 Market Fund 100,000.00 89,285.71 10,714.29 15,000.00 13,392.86 1,607.1 4 P-18-106 Inc. 600,000.00 89,285.71 64,285.71 90,000.00 80,357.14 9 ,642 .8 6 P-18-1 07 ALFM Money 600,000.00 535 714.29 64,285.71 90,000.00 80,357.14 9,642 .8 6 P- 18-108 Market Fund 3,000,000.00 535 ,714.29 321 ,428.57 450 ,000 .0 0 401 ,785.71 48,214.29 P-18-109 Inc. 400,000.00 2,678 571 .43 42,857.14 60,000.00 53.571.43 6,428.57 P-18-1 10 600,000.00 357 ,142 .86 64,285.71 90,000.00 80,357.14 9 ,642 .86 P- 18-111 ALFM Money 200,000.00 535 ,714 .2 9 21 ,428.57 30,000.00 26,785.71 3 ,214 .29 P-18-112 Market Fund 600,000.00 178,571.43 64 ,285.71 90,000.00 80,357 .14 9 ,642 .86 P-18-113 Inc. 200 ,000 .0 0 535 ,714 .29 21,428.57 30,000.00 26,785.71 3,2 14 .2 9 P-18-114 ALFM Money 400,000.00 178,571.43 42,857 .14 60,000.00 53,57 1.43 6,428.57 P-18-115 Market Fund 100 ,000 .0 0 357 ,142 .86 10,714.29 15,000.00 13,392 .86 1,607 . 14 Inc. 100,000.00 89,285.71 10,714.29 15,000.00 13,392.86 1,607 . 14 P-18-116 ALFM Money 600,000.00 89,285.71 64,285.71 90,000.00 80,357.14 9 ,642 .8 6 Market Fund 535,714.29 P-18-117 Inc. 320,000.00 285,714.29 34,285.71 48,000.00 42,857.14 5,142.86 Ayala Land Inc. 100,000.00 89,285.71 10,714.29 15,000.00 13,392.86 1,607.14 Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Ayala Land Inc. Bank of the Philippine Islands Bank of the Philippine Islands

- DECISION Ayala Corporation vs. Commissioner of Internal Revenue "' CTA Case No. 10056 P-18-118 Bank of the 220,000.00 196,428.57 23,571.43 33,000.00 29,464.29 3,535.71 P-18-1 19 Philippine P-18-120 Islands 6,400,000.00 5,714,285.71 685,714.29 960,000.00 857,1 42.86 102,857.14 P-18-121 P-18-122 Bank of the 530,000.00 473,214.29 56,785.71 79,500.00 70,982.14 8,517.86 P-18-123 Philippine P-18-124 Islands 460,000.00 410,714.29 49,285.71 69,000.00 61,607 .14 7,392.86 P-18-125 P- 18-126 Bank of the 320,000.00 285,714.29 34,285.71 48,000.00 42 ,857. 14 5,142.86 P-18-127 Philippine P-18-128 Islands 260,000.00 232,142.86 27,857.14 39,000.00 34,821 .43 4,1 78.57 Bank of the P-18-129 Philippine 70,000.00 62,500.00 7,500.00 10,500.00 9,375.00 1,125.00 Islands P-18-130 410,000.00 366,071.43 43,928.57 61 ,500.00 54,910.71 6,589.29 Bank of the P-18-131 Philippine 290 ,000.00 258,928.57 31 ,071.43 43 ,500 .00 38,839.29 4,660 .71 Islands P-18-132 Bank of the 290,000.00 258,928.57 31 ,071.43 43 ,500.00 38,839.29 4 ,660.71 Philippine P- 18-133 Islands 300,000.00 267,857.1 4 32,142.86 45, 000.00 40,178.57 4,821.43 P-18-134 Bank of the 30,000.00 26,785.71 3,2 14.29 4,500 .00 4,017.86 482 .14 Philippine P-18-135 Islands 30,000.00 26,785.71 3,214 .29 4 ,500.00 4 ,017.86 482.14 Bank of the 3 ,214 .29 4 ,500.00 4,017 .86 482.1 4 P-18-136 Philippine 30,000.00 26,785.71 Islands P-18-137 30,000.00 26,785.71 3,214.29 4,500.00 4,017 .86 482 .14 P-18-138 Bank of the 482.14 P- 18-139 Philippine 30,000.00 26,785.71 3,214.29 4,500.00 4,017.86 964 .29 P-18-140 Islands 482 .14 Bank of the 60,000.00 53,571.43 6,428 .57 9 ,0 00.00 8,035.71 Philippine Islands 30,000.00 26,785.71 3,214.29 4,500 .00 4,017.86 Bank of the 30,000.00 26,785.71 3 ,214 .29 4 ,500.00 4,017 .86 482.14 Philippine Islands 30,000.00 26,785.71 3,214.29 4,500.00 4,017.86 482.14 BPI Asset 20,000.00 17 ,857.1 4 2,142.86 3,000.00 2 ,678 .57 321.43 Management 20,000.00 17,857.14 2,142.86 3,000.00 2,678.57 321.43 20,000.00 17 ,857 .14 2,142.86 3,000.00 2,678.57 321.43 & Trust Corporation BPI Asset Management & Trust Corporation BPI Asset Management & Trust Corporation BPI Asset Management & Trust Corporation BPI Asset Management & Trust Corporation BPI Asset Management & Trust Corporation BPI Asset Management & Trust Corporation BPI Asset Management & T rust Corporation BPI Asset Management & Trust Corporation BPI Capital Corporation BPI Capital Corporation BPI Capital Corporation

DECISION \ Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 BPI Capital 20,000.00 17,857.14 2,142.86 3,000.00 2,678.57 321.43 P-18-141 Corporation 20,000.00 17 857.14 2,142.86 3 000.00 2 678.57 321.43 10,000.00 1,071.43 1,500.00 1,339.29 160.71 BPI Capital 8,928.57 P-18-142 Corporation 4,285.71 6,000.00 5 ,357 .14 642.86 40,000.00 35,714.29 BPI Capital P-18-143 Corporation 40,000.00 35,714.29 4 ,285 .71 6 ,000 .00 5 ,357 .14 642.86 40,000.00 35,714.29 4 ,285 .71 6,000.00 5 ,357 .14 642.86 BPI Family 40,000.00 35 714.29 4 ,285 .71 6 ,000 .00 5,357.14 642.86 Savings Bank P-18-144 Inc. 40,000.00 35,714.29 4 ,285 .71 6 ,000.00 5 ,357 .14 642.86 BPI Family Savings Bank 70,000.00 62,500.00 7,500.00 10,500.00 9 375.00 1,125.00 P-18-145 Inc. 30,000.00 26,785.71 3 ,214 .29 4 ,500.00 4 ,017 .86 482.14 BPI Family 30,000.00 26 785.71 3 ,214 .29 4 ,500 .00 4 0 1 7 .86 482.14 Savings Bank P-18-146 Inc. 30,000.00 26,785.71 3,214 .29 4,500.00 4 ,017 .86 482.14 BPI Family Savings Bank 30,000.00 26,785.71 3 ,214 .29 4 ,500.00 4 ,017 .86 482.14 P-18-147 Inc. BPI Family 30,000.00 26,785.71 3 ,214 .29 4 ,500 .00 4,017 .86 482.1 4 Savings Bank P-18-148 Inc. 500 ,000.00 446,428.57 53,571.43 75,000.00 66,964.29 8,035.71 400,000.00 357 , 142.86 42,857 .14 60,000.00 53,571.43 6,428.57 BPI Family Savings Bank 400,000.00 357,142.85 42,857.15 60,000.00 53,571.43 6 ,428 .57 P-18-149 Inc. BPI Family 500,000.00 446,428.56 53,571 .44 75,000.00 66,964.28 8,035.72 Savings Bank 500,000.00 446,428.57 53,571 .43 75,000.00 66,964.29 8 ,035 .71 P-18-150 Inc. 179,464.28 251,250.00 224 ,330 .36 2 6 ,919 .6 4 BPI Family 1,675,000.00 1,495,535 .72 10,714.29 15,000.00 13,392.86 1,607 .14 Savings Bank P-18-151 Inc. 100,000.00 89 ,285 .71 BPI Family 150,000.00 133 ,928 .57 16,071.43 22 ,500 .00 20 ,089 .29 2,410 .71 Savings Bank 5,357.14 7,500.00 6 ,696.43 803.57 P-18-152 Inc. 50,000.00 44,642.86 321,428.57 450 ,000.0 0 401 ,785.71 48,214.29 BPI Family 3 ,000 ,0 0 0.0 0 2,678 571.43 10,714.29 15,000.00 13,392.86 1,607.14 Savings Bank P-18-153 Inc. 100,000.00 89,285.71 174,107.14 243 ,750 .00 217 ,633 .93 26,116.07 BPI Family 1,625 ,000.0 0 1,450,892 .86 Savings Bank P-18-154 Inc. Integrated Microelectroni P-18-155 cs Inc Integrated Microelectroni P-18-156 cs Inc Integrated Microelectroni P-18-157 cs Inc Integrated Microelectroni P-18-158 cs Inc Integrated Microelectroni P-18-159 cs Inc Manila Water Company Inc. P-18-160 [(MWCI) Manila Water Company Inc. P-18-161 [(MWCI) Manila Water Company Inc. P-18-162 [(MWCI) Manila Water Company Inc. P-18-163 [(MWCI) Manila Water Company Inc. P-18-164 IMWCI) Manila Water Company Inc. P-18-165 (MWCI) Manila Water Company Inc. P-18-166 IMWCI)

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 Manila Water 1,775,000.00 1,584 ,821.43 190,178.57 266 ,2 5 0.0 0 237,723.2 1 28,526.79 Company Inc. 26,116.07 P-18-167 IMWCI} 1,625 ,000 .0 0 1 ,450 ,892 .86 174 ,107 .14 243,750.00 217 ,633 .9 3 28,928.57 192,857.14 270,000.00 241 ,071.43 Manila Water 1,800,000.00 1,607,142.86 160.71 Company Inc. 1,071.43 1,500.00 1,339 .29 80.36 P-1 8-168 IMWCI) 10,000.00 8,928 .57 Manila Water 160.71 Company Inc. 5,000.00 4,464 .2 9 535 .7 1 750 .0 0 669.64 160.71 P-18-169 i(MWCI) Philippine 10,000.00 8 ,928 .57 1,071.43 1,500.00 1,339.29 80.36 Stock Index 160.71 P-18-170 Fund 10,000.00 8 ,928 .57 1,071 .43 1 500.00 1,339.29 4 ,821.43 535.71 750.00 669.64 3,2 14.29 Philippine 5,000.00 4 ,464 .2 9 3 ,214 .29 Stock Index 1,071.43 1,500 .0 0 1,339.29 P-18-17 1 Fund 10,000.00 8 ,928 .57 1,446.43 Philippine Stock Index 300 ,000 .0 0 267 ,857 .14 32,142.86 45,000.00 40,178.57 964 .29 P-18-172 Fund 200,000.00 178,571.43 21,428.57 30,000.00 26,785.71 160.71 Philippine 642.86 Stock Index 200,000.00 178,571.43 21 ,428.57 30,000.00 26 ,785.7 1 P-18-173 Fund 803.57 Philippine 90,000.00 80 ,357 .13 9 ,642 .87 13,500.00 12,053.57 p 553,660.72 Stock Index P-18-174 Fund 60,000.00 53,571.42 6 ,428 .5 8 9 ,000.00 8,035.71 Philippine Stock Index 10,000 .00 8,928 .57 1,071.43 1,500 .00 1,339.29 P-18-175 Fund 40,000.00 3 5 ,714 .28 4,285.72 6 ,000 .0 0 5,357.14 Pilipinas Shell 50,000.00 44,642.85 5,357 .15 7,500.00 6,696.43 Petroleum P-18-176 Corporation p 34,450,000.00 p 30 758,928.51 p 3,691 ,071 .49 p 5,167,500.00 p 4,613,839.28 Pilipinas Shell Petroleum P-18-176 Corporation Pilipinas Shell Petroleum P-18-177 Corporation South Luzon Thermal Energy P-18-179 Corporation South Luzon Thermal Energy P-18-180 Corporation South Luzon Thermal Energy P-18-1 81 Corporation South Luzon Thermal Energy P-18-182 Corporation South Luzon Thermal Energy P-18-183 Corporation Subtotal - 2017 Director's Fees 2017 Other Income Integrated Microelectroni p 6,500,000.00 p 5,803,571.43 p 696,428.57 p 975,000.00 p 870,535.71 p 104,464.29 P-18-208 cs Inc Integrated Microelectroni P-18-209 cs Inc 9,048,923.00 8,079,395.54 969,527.46 1,357,338.45 1,211,909.33 145,429.12 Subtotal- 2017 Other p 15,548,923.00 p 13,882,966.97 p 1,665,956.03 p 2,332,338.45 p 2,082 ,445.05 p 249,893.40 Income Total- CY 2017 p 49,998,923.00 p 44,641,895.48 p 5,357,027.52 p 7,499,838.45 p 6,696,284.32 p 803,554.13 Although the CWTs were incorrectly computed by petitioner's suppliers based on income payments inclusive of VAT instead of (J1

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 exclusive of VAT, such income payments, exclusive of VAT, were correctly reported in petitioner's Gls and ITRs. Thus, the Court deems it proper to grant only the CWTs corresponding to such income payments that were reported in petitioner's Gls and ITRs for CYs 2016 and 2017. To summarize, the total disallowances found by the Court amount to P3,636,026.04 for CYs 2016 and 2017, to wit: Disallowances Amount Total Not supported by cwr CY 2016 CY 2017 503,853 .50 6,000.00 certificates p 62,342.91 p 441,510.59 p Erroneous double claim 14,725.44 Invalid CWTs 6,000.00 - 3, 111,447.10 Overstatement of CWT due to 3,636,026.04 incorrect tax base used 7,722 .72 7,002 .72 Total Disallowances 2,307 ,892 .97 80 3,554 .13 p 2,383,958.60 p 1,252,067.44 p Deducting the foregoing total disallowances from petitioner's claim leaves a balance of P209,295,557.96, to wit: Particulars Amount Total Petitioner's Claim CY 2016 CY 2017 Less: Court Disallowances Total Valid Claim p 95,994,335.00 p 116,937,249.00 p 212,931 ,584.00 2,383, 958.60 1,252 ,067 .44 3,636,026.04 p 93 610 376.40 p 115 685 181.56 p 209 295,557.96 In view of the foregoing , petitioner has sufficiently proven its entitlement to the issuance of TCC in the total amount of P209,295,557.96 representing its excess and unutilized CWTs for CYs 2016 and 2017. WHEREFORE, premises considered , the Petition for Review is hereby PARTIALLY GRANTED. Respondent is ordered to issue a TCC in favor of petitioner in the reduced amount of P209,295,557.96, representing the latter's total excess and unutilized CWTs for CYs 2016 and 2017. SO ORDERED. Presiding Justice

DECISION Ayala Corporation vs. Commissioner of Internal Revenue CTA Case No. 10056 WE CONCUR: ~� ~ F.~ -~a.,~ . MARIAN 1(/y F. R&YES-'1=AJARDO Associate Justice L1~7, CATHERINE T. MANAHAN Associate Justice CERTIFICATION Pursuant to Article VIII , Section 13 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. Presiding Justice