CTA Case No. 41 (Resolution)

REPUBLIC OF THE PH ILIPPINES COURT OF TAX APPEALS M ANILA E. R. SQUIBB & SONS PHILIPPINE CORPORATION, Petitioner, -versus- C.T.A. CASE NO. 41 J. ANTONIO ARANETA, as Acting Collector of Internal Revenue, Respondent. �--------------~ RESOLUTIO N In their "Joint M':>tion to Dismiss" of July 12, 1955, the parties through their respective counsel, have mani- rested the following: "1� In the petition for review filed in this case dated November 12, 1954, petitioner seeks to recover from respondent the amount of P57,075.00 as excess income taxes for the year 1952. This claim for refund is based on the deficiency incqme tax assessment (No. ACR 108-53/52) of �84,000.00 levied by respondent on E. R. Squibb & Sons Inter- national Corporation for the same year. The basis for the deficiency income tax assessment of E. R. Squibb & Sons International Corporation was the disallm1ance by the respondent of the amount of �'300, 000. 00 reported by E. R. Squibb & Sons Inter- national Corporation as loss resulting from the transfer of its inventories with a book value of �'690, 655. 45 to petitioner for P:390, 655 . 4p . 2. On the other hand, the basis of '(petitioner's claim for refund is that the gain derived from the sale of the merchandise transferred to it by E. R. Squibb & Sons International Corporation and Which was reported in its 1952 income tax return was based on the transfer value of �:390,655 . 45. In view of the increased valuation of the merchandise inventory at its full book value of �'690, 655 . 45 by the res- pondent, petitioner was required to make a corres- ponding adjustment to the inventory acquired by it at P390,655 . 45 to the full book value thereof; that upon adjustment of the value of the inventory taken by it , petitioner made an overpayment of P:57 , 075 . 00. 3. The deficiency income tax case of the E. R. Squibb & Sons International Corporation was heard in the Conference Staff of the Bureau of Internal

. ... RESOLtiTION - . C. T. A. CASE NO . 41 - 2- Revenue and on February 22, 1955 , the Conference Staff decided that the deficiency income tax due from the E. R. SqUibb & Sons International Corp- oration for 1952 is Pll, 646. 00. This decision of the Conference Staff was affirmed by respon- dent on March 8, 1955 . 4. After making the corresponding adjust- ment , the Conference Staff also found that the amount recoverable by petitioner is PlO, OlO. OO. This amount was later deducted by respondent from the income tax liability of the E. R. Squibb & Sons International Corpofation on the basis of the findings of the Conference Staff that the petitioner is merely an extension, instrumen- tality, agency, conduit or adjunct of the E. R. Squibb & Sons International Corporation, thereby negating any gain or loss in the transfer of stocks between the two entities. After deduct- ing the amount recoverable by petitioner from the income tax liability of the E. R. Squibb & Sons International Corporation, there remains an unpaid balance of Pl, 626. oo. 5. On May 14, 1955, respondent issued to E. R. Squibb & Sons International Corporation ~nded Income Tax Assessment Notice No . ACR 108- 54/52 for the amount of Pl , 626. oo. This amount was paid by E. R. Squibb & Sons Interna- / tional Corporation on May 30, 1955 , as evidenced by Income Tax Receipt No. 621200. 11 Considering that the parties have arrived at an amicable settlement as set forth in their "Joint ~i:>tion to Dismiss" , AS PRAYED FOR, LET the above- entitled case be dismissed without special pronouncement as to costs. SO ORDERED. Manila, Philippines, August 6, 1955. ~~~t-3:a::te:~~:e------ ~~ Presiding Judge