FORD GROUP PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL THIRD DIVISION FORD GROUP PHILIPPINES CTA Case No. 11128 INC., Members: Petitioner, - versus - REYES-FAJARDO, Acting Chairperson, and ANGELES,JL COMMISSIONER OF INTERNAL Promulgated: REVENUE, Respondent. JAN 2 B 20?6 ~- lfJfd~ ~� X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -#'!"- � - - - X RESOLUTION REYES-FAJARDO, J.: We resolve petitioner's Motion for Reconsideration (Motion)l filed on October 27, 2025. It mainly seeks to reverse the Court's Decision promulgated on October 1, 2025,2 which wholly denied petitioner's refund claim of excess and unutilized Creditable Withholding Taxes (CWTs), for failure to sufficiently prove that the income payments subjected to CWTs were reported as part of its gross income in its Annual Income Tax Return (AITR) for calendar year 2020. The fallo of which reads:3 "WHEREFORE, in light of the foregoing considerations, the present Petition for Review is DENIED for lack of m erit. SO ORDERED." Rollo, pp. 796- 813. 2 !d. at pp. 768 - 793. 3 !d. at p. 792. ~

.~ RESOLUTION CTA Case No. 11128 Page 2 o�4 In the assailed Decision,4 the Court entirely denied petitioner's refund of excess and unutilized CWTs for calendar year 2020 because it failed to prove that the income payments subjected to CWTs were reported as part of its gross income in its 2020 AITR. Specifically, it did not present itemized and traceable evidence (i. e. detailed general ledgers, sales registers, invoices, or supporting documents) linking the specific income payments subjected to withholding to the gross income declared in its 2020 AITR. In its Motion, petitioner argues5 that the 2020 CWT Certificates clearly show the nature of the income subjected to CWT, as reflected in the General Ledger (GL). Moreover, the Independent Certified Public Accountant, Atty. Conrado M. Briones (ICPA Briones) found that there is no difference between the revenues declared in petitioner's AITR and GL for taxable year 2020. On this premise, petitioner maintains that the income related to the claimed CWTs formed part of its reported sales in its 2020 AITR. Further, it submits that the total denial of its claim for refund is manifestly unfair and unjust, considering that it reported substantial sales/revenues/ receipts/fees that were subjected to the corresponding withholding taxes on such income. Respondent failed6 to file a comment on petitioner's assertions. We sustain the Assailed Decision. Foremost, it should be noted that the total amount of income payments per BIR Form No. 2307 of !>20,262,988,655.87 is not the same figure that was declared as income by petitioner in its 2020 AITR, i.e., !>19,473,630,829.00. Ergo, petitioner bears the burden to prove the itemized transactions compromising the income amount reported in its 2020 AITR and to demonstrate that the income payments corresponding to the claimed CWT were duly included as part of its reported sales in its 2020 AITR. Petitioner failed to discharge this burden. First. Petitioner attached to its Motion a table? purporting to reconcile the 1>789,357,826.00 discrepancy between the income 4 Supra note 2. 5 Supra note 1. 6 Records Verification dated November 11, 2025, Rollo, p. 821. 7 Rollo, Annex" A," p. 816. fiT

RESOLUTION CfA Case No. 11128 Page 3 of4 reported in its 2020 AITR and the amounts reflected in BIR Forms No. 2307. However, the table merely shows total sales per customer and the variance between the ITR and the Summary Alphalist of Withholding Tax at Source, without any detailed breakdovvn or exhibit references. As such, the Court cannot readily verify the figures against their supporting documents. Thus, it fails to directly link the income payments subjected to withholding to the amounts reported in its 2020 AITR. Second. Petitioner likewise anchors on ICPA Briones' conclusion that the revenues declared in its 2020 AITR and GL are the same, and on this basis asserts that the income related to the claimed CWTs was included in its reported sales in 2020 AITR. It merits emphasis that the findings of ICPA Briones are merely recommendatory in nature and do not bind the Court, as they remain subject to the Court's verification. Section 3, Rule 13 of the Revised Rules of the Court of Tax Appeals provides: SEC. 3. Findings ofindependent CPA.- The submission by the independent CPA of pre-marked documentary exhibits shall be subject to verification and comparison with the original documents, the availability of which shall be the primary responsibility of the party possessing such documents and, secondarily, by the independent CPA. The findings and conclusions of the independent CPA may be challenged by the parties and shall not be conclusive upon the Court, which may, in whole or in part, adopt such findings and conclusions subject to verification.s The Court's verification shows that, based on the var1ous schedules and reconciliation presented in evidence, the income payments related to the claimed CWTs cannot be traced or verified as having formed part of the reported net sales in petitioner's 2020 AITR. Hence, the Court cannot be held in error for refusing to accord evidentiary weight to ICPA Briones' finding on this point. Lastly. Petitioner claims that it is entitled to at least a proportionate refund of its claimed CWTs. We disagree. s Emphasis Ours. cr

RESOLUTION CfA Case N o. 11128 Page 4 of4 Commissioner of Internal Revenue v. Far East Bank & Trust Company (now Bank of the Philippine Islands)9 pronounced that " ... [s]ince tax refunds partake of the nature of tax exemptions, which are construed strictissimi juris against the taxpayer, evidence in support of a claim must likewise be strictissimi scrutinized and duly proven." Considering that petitioner failed to sufficiently prove that it complied with the third requisite for a refund claim of excess and unutilized CWTs, i.e., that the income payments from which taxes were withheld were declared as part of petitioner's gross income in its 2020 AITR, then, petitioner's claim in its entirety must necessarily fail. WHEREFORE, petitioner's Motion for Reconsideration IS DENIED. The Decision promulgated on October 1, 2025 is AFFIRMED. SO ORDERED. ~ ~ f~,faj~ MARIAN rv6} F. REYES-FAJARDO Associate Justice HENRY I.:NGELES Associate Justice 9 G.R. No. 173854, March 15, 2010.