CTA Case No. 3805 (Decision)

J REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS DUEZON CITY INDU STRIAL TEXTILES MANUFACTURING CORPORATION OF THE PHILIPPINES~ INC., �~" E! "1: :i. t .i. onE? r� ~ C.T . A. CASE NO. 3 805 COMM ISS IONER OF INTERNAL REVENUE, Flf'?spondr�:!n t.. >~ ..... ..w -- ��- DE C I S I 0 N Di ~; pt.t t. E~c:l i rl this; appE>c:1J. is the rlecision of rE> s pondent Commissio n e r of Internal .1<-:; gLJ. holding pE~t.i. t:i onE!r�� Indust.r� ial T F! :-: +:..i. J. c s t�l ~:\ nu f ac t .u. 1'- .in q Co ,,- po r�� '"' t .i.. on the F'h.il.i..pp:i.nPs, Inc:. l:i.c\blP o �f thE? E:\fnDI...trl -1::. of P65, 554.15 as deficiency income tax for t he year .1.9 7 4 inc: lu.�:; :.i.ve o �f :i.n1: t:~""r�r::,st .. thi s case as s tated / by petitioner and a dmitted b y rE> s pondcnt are as 40\i

DE CISION CTA CASE NO. 3805 2 � ;:~. n c:l o I'" q i:J. n :i.. ;:-: P cl by \1 i I'" tu. E~ Philippines, with Fp.i'f i0. n.i.o dE:>lo<.:.; ~3 i::\l"l t .os-, (.) vP nt.t(":.' (EDSA), Mandaluyonq, hlh E-? F" E�~ .i t may be served with n o tices, i0.nc:l n-l::. h(�c�'r.. r"<�:::�~::.pnr�,c:J c> nt j<::. head of the Bureau o'f 0 �f 'f' :i. (: E�~ <:~ dt. Uf -f\c:c~ , Hlf" Di l im<:m �1 notice s, writs, processe s anc:l ot h er legal papers; TH AT petitioner is engaged in th e business o �f mi::�1. n u �f E:i c: t t.tr. .:i.n q an d other industrial t .E' ;.: t i J f?t:'i mi::\ f l i.J 'f i::\C:: t t.l t"' P c:l 'f I'" Om .i. ill po I'" t e d mat e ri a ls, 'for sa le to customers; :~:; " THr:.JT .it. 'fi l ed its 1 974 lnc:ome tax return C:lrl l .i fnP !I ci E�clu c tinq f t"' Dm .i r.., c om r�::> , 0 -l::. l"'1 f;~ 1'" ~::!- , t hf:? �f CJ 1 J. CJV�J i !"'! q 11 (J) .i. SC:: (�-::! J. J. c:\ l"l f''.~CJI...( t:5 (-?~�! pen C.o f::>~:; 11 : Doubtful accoun t s written C) �f 'f ..... P H6, :.-,:-c;' :-2. l :::; AcceleratPd depreciation, o v c�? I'" c 1 a .i. m� 60 !' :~:;c?:�.:~.] 4 S hor e in s alarie s , ANSCOR . . . ...:Z:J:. !I...~~i (~).:z_. ~.f~Q :::::::::::::-:: ::.-::::::::::::.-_-:::::::::::::::::::

DEC I S I ON CT A CASE NO . 3 8 05 3 4 . THAT on No ve mb er 20~ 1979 i t received a defi c i e nc y income ta x assessment d a t ed October 29~ .1.9 79 c:l f.�~ m .::inclinq f r.. om p�? t .i t :i.one r.. pa y ment of alleqed l ia bil ity of P108~443.98 computed by res~onclent b y disallowing th e expenses enumerated in p i3.r. ::::; , above~ re s ultinq in a "n<~t income p<=r :i.nvF~s; t i g ,':i t ion 11 of F'5 ~ 4!39 !I ~.i97 � .1. ::~; 5. THAT pet. .i t.i.nn12r con t<-:s t<:: d sa id assessment on December 19, 1979; 6. THAT re s p o ndent rn a dG a final decision on by a llowing d e duction of "doubtful the a mount of P86, 292. 13 h1.tt. r�e.i. t .P r"E:\t:i.nq t h e di sa llo wa n ce of t h e other two - �.:. AccPlerated d ep r ecia tion, PbO , ~::;<~? . 7 4 OVE'I'"C 1 ,:;t:.i..m 7 J 'I 507. 6fl Shere in sa l aries, AN SCOR resultinq in a new dem a nd for p ay ment of P65~554.15 J 9'7 4 i.nc:lu!:',.ivP of Aller,Jing that th E~ t"�e rJu ce cl <.:\"='Sessmen t. of P65,554.15 is without a n y bas i s in l a w a nd i n f a ct, petitioner ap pea l e d to this Court . It wa s es t a bli s h e d dur i ng t h�~ t. r� .i.. i::d t.ha t i.n 1974 petition e r was already the 408

DECISION CTA CASE ND. 3805 - 4- Investments as a n em--pi on E-e r� the production/manufacture of bags unciE?r�� F~f�? publ ic (~c t No. 51B6. (F :-:h. B.) f':)nd in "'' l ('01 t tE? I'" d i:':\ tr:>d February 2, 1969 (Exh. F ) , p e t i t i o n e r Zoi l o c;,,,,,,-:;tr-i llo~ J r . , Management s~rvices Man ager of A. Sor'� iano y C:i..:,, (An s; c:or� i'or� s h or�t) ''t o conduct ::, pE~c::ial study or- re v iew of It:emc:op 's (petitioner's) present policies and methods with the end in attc:1i nin cJ optimum effic::ienc::y in its operations at the l east i:::u~::; t" . (.)s [.J r- p~::;r::-!n ted b y tha parties, the i.s�:::,ues �for� ,,. e~::;o 1 1...1 t ion a r~t-?: 1. Whether or not the disallowance by respondent of P60,392.74 as excess c:lep Y"E'C: i. at.ion P71,507.69 as share was proper a nd legal. 2. Whether or not the assessment had Republic Act No. 5186, enterprise under petition er claimed in .its 40J

DEC I SION CTA CASE NO. 3805 - 5- income tax return tor 1974, accelerated depreciation on its fixed a ssets in the total amount P673,601.00, pursuant to the provisions of Section 27(b) of said Act. However, upon verification of petitio~er's 1974 income tax return, the investigating examiner recomputed the accelerated depreciation allowable based on the schedule of machinery and equipment (Exhs. E & E- 1) furnished by petitioner and found the deduction for e accelerated depreciation overlaimed by P60,392. 74. (See pp. 67 & 68, BIR ~ecord s. ) In a letter dated October 21, 1976 (Exh. 6, pp. 97 to 1r)1, BIR record s ), petitioner's counsel, averring that the above findings of respondent's examiner '' coul d have been due to the failure of the worksheets submitted to him to.indicate accurate ly the repairs and modification s mad e on the ma c hinerie s '', attached therewith an a nal ysis of the accelerated depreciation charged for 1974 showing that petitioner underclaimed by P10.04 the maximum accelerated depreciation deduction it was entitled to under Republic Act No. 5186. (See Annexes A & A-1, pp. 95 & 96, BIR records.) 41G

DECISION CTA CASE NO. 3805 - 6- of the computa ti o n s s ubmitted by bo t.h p c:\ r��t.i e s ~ ~;umm <:J. I'"" i zed to the d i ffer e nces between th e m~ i s attach e d h e r e with as An rH::> ;.: A 11 11 � It: i s relevant to note that b e tY.J e f.:> n two computations lie onl y in the dC CE) .1. E' r �� c:\ t. c::.~cl on m<:\chin F! r�.i.E:'S a nd r� epa.i ,,-~; :i.n the E x tru s ion Mills SE'C t:.i. Dn . the ac c e l e r a ted d e prec iation c:m th e f ixe d asse t s in th e other fi v e sec ti o n s are conc e rn e d, th e Bea ming S e cti o n , th e Co p s Winding S ec tion~ the Twi s ting Se ction, the We av ing Mill s and the Fini s hing Section, pe titioner adopted the find i ng s o f r es pond e nt. Res p o nd e nt c o ntend s th e:\t o ve=: r�-c J.aim e d c:l E-~ cl u c:: t.: .:i.. on of a c celerated depre c i a tion on the m<::\C: h i n P I'"" i E���::; c\nc:l :i.n the E x tru s ion Mill s f:3E?c: t :i. on i n the amount of P60~ 3 92. 7 4 was di sa llowed for� �f e:\i lu~�� e of petitioner� to di s put E~ c Dl'�� r�� E'C t:n e s!,; o �f t ht�? c:-on+pu t .3 t ion c"f t h!:-"? i nvF.! S t i qat ing examiner based on the fir s t: s chedule s ubmitted by pF!ti tiOf"l F! I'- . ( E:-:h ~;. E 8~ E �- 1. ~ s ee al s o pp. 65 - 66, BIR r.. f.~)c: or�d s . ) The revised s chedule in comput a t io n s ub s equ e ntl y s ubm i tt e d I::J y peti ti c1ner� 41 1

DECISION CTA CASE NO. 3805 - 7- pp. 95-96~ BIR r�e cor-ds) modifications not in the which wer-e not duly s ubstantiated I:Jy Fur-ther-mor-e~ petitioner failed to notify respondent whi ch depreci ation r-ate it would Ll S:~ ~.S pr-escr-ibed in Sectio n 27( b) of Republic Act No . 5186~ as follows: ''(b) (-)cc:elr.-:~t-�a tec:l Depr�ec:ie:\tion. -- At the option of taxpayer a nd in accor-dance with the procedure established by the Bur-eau of Internal Revenue~ fixed assets mc:\Y bF~~ (1.) dE~pr�ec: iat:.E~d to the E?:�:tr.->nt of not more tha n twice as fast the normal rate of depr-eciation or depreciated at normal rate of depreciation if expected lif e is ten year-s or- less ; (2) d epreciated over any number of year-s between five years and expected life if the l a l. t F~r�� :i.s � rnor�� <;~ t .l�l,::\n tr:~ n ( .1.0) year�s ,:~nd the depreciation thereon a llowed as a deduction from taxable income; Provided, That the taxpaye r notifies the Bureau of Intern a l Re ve nue at t~e~b egi nning nf the dE~ pt-ec .i.a t i on period which d epreciation rate C."\].]. OWf.~d by thi �:; ~~. f.:?c::t.ion ~�.l."i.lJ bP u se d by i t . " F'<�:�~ t i t .i.. on e.,,. m,::\into':\i.ns that t h E' deduc:t:ion depreciation is not due to lack of not :i.C:E�~ to the Internal ~-.,Jhi c:: h <"'r�gurnen t. t ,,..r.~r.:..; pond<-:z.n ha s .:J. bandoned ~ but only PI? t. .it. i. one t- allec.:~edly did not dispute the c:omput.i::\tion of the e:�:<::l.minf.::>r� . It is asser ted that th��~ comp ut c:ttio n petitioner filed with respondent 412

DECIS I ON CTA CASE NO. 3805 8- the information needed to compute the a ccelerated depreciation'', thereby s hifting the p F"'OCJ f to rE'sponden t to ju~::; t :i. fy the di s allowance he made. Bu� sinc e res pondent failed to discharge this burden, hi s determination must be The position of petitioner i s unte nable. The r� u.l e is t'-1 1�: ' � l S (�?'l:. t 1 F~ d that the Commi s sioner ' s ass ess ment i s prima fa c ie or pres umpti vely correct <J.nd th (':? btH-df.�? l"l cJ'f pn:Jof i s o n the t a:-:pay er� to show t.hr::> c ont.l'"<.:\ r. y. To me et the burd e n of o v ercoming the pt��irn <, col"" r" E~ c: tne s s n�f the Commi s sinner' s d e t e rmin a t ion, the t ax payer i s r e quir e d t o do more th <::\1"1 �ful~ li-J a r d ll-lith the bF.� ~::.t. (�?VidencE? obt cl.:i.n t:\i::ll r.;.!. the Commi ss ioner' s d ~:,,t (:'" t. �mir l,:l t io n t .o (Steel or Bronze Pi s t o n Ring Corp., 13 TC 636.) point e d out f?,:=t r�liet�-, th e di s crepa ncie s be t ween r es pond e nt' s and pe titioner's computation s for the acce l e r a ted depreciation allnwable on some �f .i :-:eel ~\E;s~ e t s ~ per.. t.ained only tCJ t. hCJSE' in the tr�es pE�C: t to the . E:-:t.n..ts.ion 1'1.i l l s Sec-ti.o. n With accelera ted depreciation on the fixed assets in the othf?l'" PE?t.i t.ioner� adopted in its 4

DECIS I ON CTA CASE NO. 3805 - 9- compu t:.i:'l t ..i.on the in, r�ec.~ pcmclen t ' s c nmpu t:.<.:\ t .i. on in ef ff.?C t c:onc:r:?d inq th e validity of the finding s of respondent thereon. No r::~;.:p lanat.i.Dn by pE.~ t.i tioner to i:\C C DUI"l t �for- the above rnent.i.Dnecl disc r-<-:!pa nc i es the two computations. To c:on t.rover� t respondent's computation~ petitioner merely relied on i t s cornp u t<.:\ t ion 1to~.i. t .h that " <'1 1 l the in�fo t�-mat:..i.on ne E� c:lr"-'d by r-�es pon cl Em t. ' s exami n er to ver ify the correctness of the cleductiDn t <'=' ken '51..1 p p 1 i E�'d te> ( F'e t i t .i. orH.'? t- ' s (I)E' fllU r� i::l.l'l dl...lfll ~ p. 44~ CTA r ecords), but introduced ne> evidence II�! hat. c.soev E~ ,,.. t .o pt'" OV e this.;. Said c:nmp i..t t:J.tion ~ s t i: \nd.i.nq alone, is i:,l.nd in s 1.J �f �f .i c i r:�) f'l t to the� pt�c:=5 urnption of - ..... which at t ac he s to the dete rmination of repeate dl y stated that t.hE' bur- df=~n of proof i s on the taxpayer c ontesting the v alidity or correctness e>f an assessme nt to pro ve not e>nly that of In terni:\l Re venue is wrong but . V '_",' Col lE0c:tn t'" o �f Internal Revenue, CT(.) Casr.~ No. 504� ~ See also Tan Guan vs. Court e>f 414

DECISION CTA CASE NO. 3805 - 10 - T ax Appeals~ L-23676, April 27, 1967~ 19 SCRA 903.) And i. �f t h r::? t_ ,3 :-: P<" ye r.. �fai l s to present evidence or proof in support of his allegations in his petition t.h .i.s Cc:\SE', c:onfor-mai:J ly to the the p rr.-?~sump t. :i. on in the assessment (Inter-~rovincial Aut.obu ~:; Co., In c. y~; � Co ll ector-� of 1956, 98 Phil. 290 ; CollE?ct.or.. o�f F\ PvPnue vs. Bohol Land Tr a nsportation Co., L-13099 a nd L-13462, April 29~ 19AO,, 107 Phil. 965), the Court of Tax Appeals wil l merely s ust ain the assessment agai n st Interna l R~ v enue, CTA Ca s e No. c e rtiorari denied in G.R~ No. L- 70758, August 30, .19B'.:.i. ) d:i. ~:;<:~ J.JD\Ai i::\n Cf.-:! ovt'r��c 1 a i rn e d acceler a ted depreciation of P60,29~.74 is therefore ~:;u <;;, t. '"'in t-'d � amr~H..m t. of F'71. ~ 507. 68 a lleqe dl y I'.. E!p l~esE-~n t i n e II. AN~3CDR 410

DECISION CTA CASE NO. 3805 - 11 - d i SE:I J. 1 0\J',If.-?d L1y responclt::? n t. not only b ecau!:;E> it is ne.i thpr�� nPc essa r y, but also because incuri"'E?d not in :1.9 7 4 but in Cln thE~ other hand, petitioner claims that th e s um CJ'f F'71., 507 .. 68 war:; an o r� d in <3.1~y nE.>cessa i'"Y bu ~:; .i nE�ss e:-: pf?.n se deductible und e r Sec ti on 30 ( a ) of .. the T a:-: Code bPc:<::~. U S f?. i t was the cost of a project propD SE"cl b y Anscor and acce pted by petitioner in 1.969. Und er the ag r ee mP nt, AnscCJr condu cted , Dn a of pE-? '1::. i. t i. onE! r� t:o operation b y improving efficiency. . !.h e i:':\U -J-.h OI"" i t y t:o c:o nclu ct specia l s +-u.d '/ 01'" C) �f pE!ti tionPt... ' f::; polici es t:. ht�?. . Fehlr�u .::~t �y .'.':':l. �" :1.969 (E.:::-: h � F) .incluciE~c:l to inaugurate or implement thr? I'" E�~<:; u l t .<::. of the'? s t:ucly \.-\lht=.!t:h(:-"?1'" mean r��e t .c-:�n t ..ion ~� mod 5. f i c r.:1 t. :i. on C) I'" change in It e mc:o p 's �' '"n cl o�f c:onduct.i.nq .its �f u I''Tl i. s ht=.>c:l v-d.th detai l ed reports of the said s tudies conducted and mocl.i f .i. c.:~tinns c: hanq r:::s rn<::l d e if' <:l n y . Your com pe n sation sha ll on t he�? rH..tmber� of m ~;: n 41 t)

DEC IS I Cll'-1 -��� CTA CASE NO. 3805 conduct. the I t.i�::� rnc~: n p <::; hou l d l:::oc' "f 1.�1. r� n .is hc:.:!cl :.i. n :::~ cl \! ,,,, n r:: c:� n u.mhE~ r� o-f men who will conduct ~ ,;; +:. uc:l ''/ '' .. Nn t r:� t� hi'l +� r::ompens~t.ion is hosed on the number u f mr-?rl i::-t<:=:.s i. qn ('~ cj t�.o c:: on d uc:: t thE! "'-� l :u.cl \.' .::;~nd t hf�) 1 E~n rJ t h c:l C�VD -I::. eel t: h E-~ I''' F-~ tu. VJhC:) t�-.t.i.l1 C:D il clt..f.C:t �''�\ .:~.dv,'"nC:E! t . hP Ar�,cl p .:�-1r l . :i.cu. l <::1 r � �i.. (J �I�.o i. n F r::� b 1��� 1.J <c<.r��y ~ t---.J !���,j 1 e th e� P E' t :.i t :i.. C:)rl(:-?1'" t.h i::~ t. t .h!::? pr�� o _-j c::~c 1:. ~:==r�5 l ., F�d c:u ntinu.inq ba s i s , \..--.1it. h ut.\ t cl o':\ d ['"�C\ l \ ,:,; I�� t::� ;�:, I 1cl ~:;; I ' �f �f :i. C .i.. E�1rl 1_-_ C? \i j_ c:-;~ r1 C:: ('-~ i':\ �;::. t C) t J�--1 (-;7� b ,;:\_<;::. j_ ~::; C:l �f c Chi"! pr:.! ! ., <:~,:=.\ �1: i_on r:\.;''.\ .Lc:l ' n 1...1. .-n h \::~ 1.... of mc!n lr:: J-l CI :.. II uf time cl evo tecl to th e p~rt.ir::u l ar study and (') f :::; 1.\( : h l.�=t )' 4 ., h ;;':\. ~:; no ~�-.11:':~ :i. q h l: li�J i. t� ll �: h.:::� Co1.1.1' t 1-- I0\�'-1 C:E11"l <:1 I'"C!pot� t .i.1�1 .1.9)'0 U l"' J 776 C 011 �:;:. :i .d C:�' 1� F:~d cl E' t ..,-,,_:i. 1 (-~ d !'"E' pU!'. t�. of con ell.i.e -!- <'-'~d E1rl cl mod :i. f i c: "'' t :i Dn ~"~ u r� c:: 1�--,<'i n c:1 F:~~:::. m<':l c:l E'~ .11...1 .197 4 ..i.. ll 1-. ll (�? A report submitted :.i.n J 9/'() 01� �� ).. '7'/f::. C i::\l 'll'"I0-1::. h y �:~ t .I'" f.'-~ t �c: h i rn i�:�.c:~ �i.n .-,~ �1-. j u 1�1 h r-~ dP'l:.iel_j_J. (-:~ d r�c~ pDI"' t. Df

DEC I S I !JI\I �- �.:. CTA CASE I\I!J . 3805 - .13 - ~ar r i. erl o ut i n 19 7 4. T h E�' 1 � E! q 1...t 1 .=~ t. j on !o; be subs t a ntiated b y rec ord s howinq .i n c:l E�! t. ;,,, :.i. 1 t .h E> <7:\fllDUnt: .i.r�rcUI'. I'E0d. Re v . Req s . No. 2 .) d e du c tion s claimed .. t..tnciF~ I t .h E! the Th'''~ mer e a lleo a ti o n of ex pe nse i s ordinary r I C C F'' <:;. <::. �'="� I' \ . nut:. �j u.<::; +: �i. 'f '/ :.i. t:.<::.; d r.=.> du.c: t .i. on . .1... �.��,-"!' o �f lilt . r:~ r�� r--r a l .. -��':?b9 J.. J. <"l.n cl n".�:�:�\/ p n I...I(.::�! Corpul'-:" t:i..un, 1...��� J.9 H.1, 10 ~? ? 4 6 .) f:ind ;:,\nd �''' '::'S'i '..'m :i.nq th a t thr�:�? .i c,:; i r1 th e op pr� io\ t. .i on C.l f the h1..1 <:> i r1 f�?::><:;; . t:. h e � d c' cll..tc t :ion �.:. 41d

DECif.3IUI'l --� CTA CASE NO. 3805 - .14 -�- o f th e ex p e nd .i. t u r e it se lf, whj c h in tu r n d e pend s o n a nd p e rm a n e n cy of th e wo rk acco mp li s h e d E~ >: p c:� r-1cl .:i. t t \ r�� c~ " (A tl as Conso l i d ated Min i nq & C o,,.. p o r-'"' t .i.. o n vs . of CCJU. I'"" t t�.h Ett in cu mt-:' d e d u c tio n 1s a ma tt e r of l e gi s l a ti ve or ace and th a t the burd e n o f cl e arl y s howing the ri qht t o the .:. c l a im e d d e ductiDn :i..<::; o n th e p a rt o f th e tax p aye r " (Inte rs t a t e Trans it ::~ .1 9 F> " Ct. " 1 :279 .. ) of �f c-:\c t , t�.hp t axpayer see k i n g a dE> d u.ction rnu <::. t p o.l r�,t t o �::::. DinE! s p ecif i c pro visi on s t h (�'" �:; t: '"' t�.\.1. t ('? in c:l e c::lu c t .:i. c::. n :i. <=:; m u ~:. t : p r 6ve tha t he is Pnt i tl e d to the d e duc ti o n ~-�.!h ie h t h E�~ PH F e d . Tax Cou rse, P i:Ol. r� . :J.FlO l , c i t c-:-? d i.n E�' cl " !I .l Ob . Th e� ,::~ pp l .:i C: Etb l e pt--�i n c..i. p l. F-?�:::; uf i0. nd t .u our�� m i ne!~ p et..i t :.i.Cl rl P t'"� I n d u ~::; t : r �i E:\ 1. Cc::. ,,. p n r��o:1. t:..i. un of t:. hF~ F'h.i.l.i pp :i. n P~::; ~ In c . , n u t. �::;u ff.i c::.:i. E-' n t l y ~::. u ~:. l:<::\.:i.n r::.� d. t.h F�' bt.tr- c::J~:~n \�Jh .i.c:: J���, i s; pl c:\ C Pcl 1...\ pr) r��, i t t u b e e nt.i.tlPd t o th e cl ai mP d d e du c tion o f P 7 1 ,50 1. 68 a~ s h a r e i n sa l aries, AN SC UR. 413

DECISION --� CTA CASE NO. 3805 - 15 - On the question of p~esc~iption, s uffice i t to �:.:; t .,,,, -1::. e t. h :::~ t t. hE' r-ec: C.\ l'" d ~:> Bu~eau of Inte~nal on thP <3'"'� poinl:P c:l Ul...\-1:�. h y ~P s pondent, that on June 1 7, 1983, a wai ve ~ 1 im:i. t .E1tion:;, E~ >: ec:: \..1. t .E~ cl by pc~t�. i. t�. i. ol..l c� r- in to Pxpi.~e on December 30, 19H tJ. .. ( p.. ~.?~:.iO ; Since the ~e vise d review was made on J 9f::;l.). ' j \'.: .i ""� C J E-'i�':l.1��� i::JE:�y Df'l c:l cJ C) I_ I, b l:. t h.:,�;,,t ~;,:~ i cl i. r.:; ;.:; 1...\ F:.'d ,,.,, :.i.. t ,.,in E�~ ~< E�:� C: U t E! cJ \ .t. P U I"'t b'/ pE~ -1:.: j l:. i Ol'"t P t'.. . .�i.m �i t ,,,, t : -.i.. nr1 u f.~ on i:~ ~:; <:". r-~ "'; ;:;rn(�:�:!n t . ,::, n d c:: c::. 1 1 (�?C: t: 5 on of the taxpa ye~ , the riqht +:u t .h F' uf p l"� r:-~ ;:;c:: r� :.i. pt. ion hr~ .i.nq V~<:'l.i.V.::t bl e. (!:-> ,�:,_mi�:�,,.... ;.:{ r-, ; _~ \/'''�� Co t..ll'" �l�. of I F.:\:�: flpp!'�:';;,,J~:;, .'!..OJ.. F' h.i. l .. J . ) f.'lc:cr�, ,.... c.l �i. l �tq ) V :� p et i. ti.oner Indu s t r i a l Textiles In tcr n ;::�.l l .D I "'C~<''� pOll c:i E'l'l t : of c:i c-:'f i C �.i C~l-1\'.. ._ .. i l lC'Cif!lC f C) I'" p l u s.

DECif:3ION -��� CTA CASE NO. 3805 -- 16 --� '":" '� '�,.-� c:: h i':<. ,.... Cl c ~;:. .:"�\.n r:l .1 ,..., c:: .i r:l c:�n t : to d e:� I :.i rlqU F:~ n c:y 1:)' t ,. . ��:".u.::").n t. �!�:. o t he p r ovisi o ns of Sect i on 51(e) ( 2 l( 3) I n t e rn a l Reve n ue Cod e, i:'1. <;;; ,:;,_rn r:! r l d r.::�' d � WHEF\EFORE, the Court. her�eby denies the petition for review for lack of merit and affirms the decision appealed from at. petitioner's costs. SO nr.;:DERED. DI..! F'� zun Cit�'/!, 1� 1r-:-:� i:. r �o t�'i ;:,n.i. J .:,\~ ,Jt.ll"lP J O!, lC?DH. AM()NTE r:� r� r:! ~; j d i n '~1 � I u c::l q C' ~'JE CUNCI .IF\: f U ll Cl f �f .�i C: j ;::,. 1 1 7.�:�~ :".':'1 \�' E:� ) CONSTANTE C. ROAQUIN

DECI E1 I 01\1 CTA CASE NO . 3805 - 17 - CERT I F I CAT I 0 N I c c~ t'.. t :i. f y � t h i:\ t thP Cnu~t of Tax Appea l s in acco~dance with Se ction l :~' ~� ('t 1,.. tic: l E~ \!I I I o �f t:.he:::�:� Co 1�l ~:; t:.i t : u t:. i un .. AMANTE F' t'.. pr,-, i cl.i r CJ ,J 1...\cl q F�~ Cuu~t uf T ax Appeals

DECISION - CTA CASE NO. 3805 - 18 - ANNEX "A" Per BIR Examiner ' s Computation Fer Petitioner ' s Computation pp. 67-68, BJR records pp . 95-96 ; 3IR record s I. Extrusion Mills Accelerated Depreciation Overclaim Accelerated Depreciation Overclaim Differ en ce Depreciation Claned Dat e . ~-~Jisition Depreciation Claimed BOI - 1974 BOI - 1974 1974 Acquired Co st BO I - 1974 801 - 1974 1974 Ext rusion Line Dec. 1967 p 349' 861. 09 p 22,176 .94 p 12,322.06 p 34 ,499. 00 p 12,810.73 ) p 11 ,591 .89 p 25,862.96 P� 8l636. 04 4 Extrusion Line June, 1969 1,144,775 .88 14,649.20 ( 40,149.86 ) 25,330,66 40,149.86 ) ( 40,149.86 ) 25,530.66 Major Repairs i� Ny 1on Ca ;~s & Followers 1972 - 1973 164, 018.31 7,398.98 22 ,123.64 14~724 . 66 25,406.58 28,4 04.68 1. 90) 14,726.56 1972 - 1973 59, 068.20 248.32 11,565,22 11,506.60 11,565 .22 Cops &Bobbins 11,31c�;90 .38) 11,317.28 I I. Beaming Section various 1,108,i73.30 See wor ksheet total ( 374.91 ) Same per BIR "orkshee t 374.91 ) III. Cops Winding variou s 483,323.20 See wor ksheet tot3l (7,790.64) Same per BJR wo rkshee t 7,"?90.64 ) Sect ion IV. Twisting Sec tion various 126 ,881.?0 See worksheet total Same per BIR workshee t V. Weaving Mills variou s 8~44 0 ~520.55 See worksheet total { 32~392.43) Same per BIR workshee t 32,392.43 VI. Printing &Finishing 1 Hayashi Printing li d Machin e Jan. 19,S9 100,995.41 8,977.30) 8,977 .30 17,954.62 Same per BIR work shee t 17,954.62 371,287. 03 Other printing & fini shing machines various summariz ed j 3, 407.94 ) Same per BJR wo rkshee t 3,605.20 Should be P3,407 .94 Total ov e rclai~ed p 60,397.71 (P 10.06) Total und erclaimed ============ ============