MARIONNAUD PHILIPPINES, INC., v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC MARIONNAUD PHILIPPINES, CTA EB NO. 160 2 INC ., (CTA Case No. 8807) Petitioner, Present: -versus- DEL ROSARIO, P.J. , CASTANEDA, J R., UY, FABON-VICTORINO , MINDARO -GRULLA , RINGPIS-LIBAN, and MANAHAN, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X RESOLUTION MANAHAN, J .: This resolves the Motion for Reconsideration (of the Decision dated 01 August 20 18) 1 filed by petitioner on September 13, 2018. Upon notice and within the extended period prayed for, respondent filed his Opposition (To Petitioner's Motion for Reconsideration dated 13 September 2018}, on October 23, 2018. Petitioner assails the Court En Bane's Decision 2 dated August 1, 2018, which disposed of petitioner's appeal and consequently dismissed its claim for refund of alleged excess and unutilized creditable withholding tax (CWT) for calendar year ending December 31, 2011 amounting to Php26,800,481.00, as follows: J Rollo, Vol. 2, pp. 560-579. 2 Rollo, Vol. 2, pp. 530-542.

RESOLUTION CTA EB No. 1602 (C.T.A. Case No. 8807.) Page 2 of4 WHEREFORE, the instant Petition for Review is hereby DISMISSED for lack of merit. SO ORDERED.3 The Court En Bane found that petitioner failed to substantiate its allegation of timing difference to explain the discrepancy between the income reported in its annual income tax return, and the total income declared in its creditable withholding tax certificates. The Court En Bane also found that petitioner failed to establish that it has excess and unutilized creditable taxes when it failed to substantiate its prior year's excess credits which may be applied to offset its income tax liability. For the foregoing reason, petitioner's claim for refund of alleged excess and unutilized CWT was denied. In its Motion, petitioner states that it was able to provide documentary and testimonial evidence to establish that the income, upon which its excess and unutilized CWT for calendar year ended December 31, 2011 were withheld, was declared as part of its gross income. Petitioner also questions the requirement to substantiate its prior years excess CWT, considering that the carried forward excess CWT enjoys the presumption of validity. Petitioner further alleges that the requirement to substantiate prior years excess credits runs counter to Paragraph (C), Section 2.58.3 of Revenue Regulations No. 2-98, which allows a taxpayer to automatically credit its excess withholding tax credits against its income tax due. In his Opposition, respondent states that a tax refund is in the nature of a tax exemption which must be construed strictissimi juris against the taxpayer and that the taxpayer must present convincing evidence to substantiate a claim for refund. Respondent states that since petitioner failed to discharge the burden, the Court correctly denied the claim for refund. Further, respondent states that petitioner did not present any compelling ground to justify the reversal of the subject Decision. After reviewing petitioner's arguments and the records, the Court finds no reason to reverse its findings that petitioner failed to reconcile the discrepancy between the income per its ITR and the income in its CWT certificates. The income based 3 Rollo, Vol. 2, Decision dated August 1, 2018, p. 541.

RESOLUTION CTA EB No. 1602 (C.T.A. Case No. 8807) Page 3 of4 on CWT certificates is higher than that reported in the ITR, which petitioner alleges is due to timing difference in reporting the income and receipt of the CWT certificates. While the Court does not discount that timing differences and delay in the receipt of the CWT certificates can cause the discrepancy in the amounts reported in the ITR and in the CWT certificates, the Court reiterates that petitioner failed to reconcile the amounts allegedly caused by said timing difference. With respect to the requirement to substantiate prior years excess CWT, the same stems from the principle that a taxpayer must prove every minute aspect of the case by presenting, formally offering and submitting its evidence to the CTA. 4 WHEREFORE, petitioner's Motion for Reconsideration (of the Decision dated 01 August 20 18) is DENIED for lack of merit. SO ORDERED. CATHERINE T. MANAHAN Associate Justice WE CONCUR: Presiding Justice ~J,C~Olt. fA. E~P�.UY Ju5\Nrro c. cAsTA:&EDA, JR. Associate Justice Associate Justice 4 Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue, G.R. No. 145526, March 16, 2007.

RESOLUTION CTA EB No. 1602 (C.T.A. Case No. 8807) Page 4 of4 ABON-VICTORINO c C ('.: ~ D.LNN..MMli.N.�fL>AMR.O..-'dR~ ULLA Associate Justice GNt. ~ ~- ' \ MA. BELEN M. RINGPIS-LIBAN Associate Justice