CTA_00_CV_04436_D_1998JUN24_ASS

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS

http://slidepdf.com/reader/full/cta00cv04436d1998jun24ass 1/13

REPUBLIC

OF THE PHILIPPINES

COURT OF T X

PPE LS

QUEZON

CITY

PRODUCERS BANK OF THE

PHILIPPINES

P e t i t i o n e r

,

- versus -

COMMISSIONER OF INTERNAL

REVENUE

Respondent.

X - - - - -

C.T.A. CASE NOS. 4436

AND 4811

Promulgated:

JUN

2 4 998

f J

- - - X

DE IS IO N

These

are

twin pe t i t ions quest ioning the

assessments

i s sued by

respondent

for

the

a l l eged non-payment of

withholding t ax on i n t e r e s t pa id to a fore ign corpora t ion

fo r the years 1985 and 1986.

Pe t i t ione r

i s

a commercial banking corporat ion duly

organized and ex is t ing under Phi l ippine

laws.

On var ious

dates ,

t

opened

Let te rs

of

Credi t LC)

1n

favor

of

Samsung Co., Ltd. Samsung) fo r

the

account of F er t i l i z e r

Market ing Co .

of the

Phi l ipp ines , Inc. FERMAP , to cover

the importa t ion

of

complete

f e r t i l i z e r

from

Korea to

the

Phi l ippi r .es , as fol lows:

LC No

Date

Amount

Opened

15151

12

/

18

/

82

943,624.00

15924

08/01

/ 83

580,866 . 00

15922

08

/

01

/

83

365,860.00

Due

Date

360

days

90 days

90

days

i l l

o f

Lading

Date

12/17

/

82

a f t e r B/ L da te

08/11/83

a f t e r B/ L date

09/13 /

83

a f t e r B/ L da te

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C. T A C SE NOS. 4436 4811

- 2 -

Sometime

in

August, 1983,

the

Government

of

the

Phi l ipp ines suf fe red a fore ign

exchange

c r i s i s

which

r e su l t ed in the

defaul t

in

the

payment

of

i t s

fo re ign

debts .

On October 24, 1983,

the Centra l

Bank

of the

Phi l ipp ines (CB)

was forced

to i s sue Ci rcu la r No. 966,

e f f ec t ive

October 25,

1983 (Exh. AA),

compell ing

a l l

banks

to

se l l

to the

CB 80 of a l l

t he i r

fore ign exchange

r ece ip t s . This

Circula r

was

l a t e r

on amended by Circula r

No. 970,

dated

November

4, 1983 (Exh. BB), requi r ing a l l

banks

to

se l l

to

the CB a l l of

t he i r

fore ign

exchange

r ece ip t s .

As a consequence, pe t i t ione r was not able to pay the

dra f t s drawn on the

abovementioned

l e t t e r s of

c red i t when

they

f e l l

due.

These

dra f t s

remained

unpaid

unt i l

the

CB

i ssued

Circula r

No.

1010, dated June 6, 1984 (Exh. CC) ,

reducing the 100 fore ign

exchange

r ece i p t s surrender to

80

fol lowed

by

Circula r No. 1023,

dated

September 6,

1984

(Exh. DD),

fur ther reducing the

percentage of

su r render

to 79.5 .

With

the

minimal

al lowable

fore ign

exchange

r e t en t i on

the

pe t i t ione r

negot ia ted

for a payment on

ins ta l lment

of

i t s unpaid

dra f t s .

During

the

negot i a t ions

Samsung,

through i t s correspondent bank,

a l l egedly

refused

to

pay any

t ax on

the i n t e r e s t t ha t

wi l l be imposed pr inc ipa l ly due

to the de lay in the

payment

of the

dra f t s .

Thus,

the

pe t i t ione r

pa id Samsung

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C T .A C SE NOS. 4436 4811

3

the sums assessed

as

i n t e r e s t

on

fore ign loans but which

p e t i t i o n e r

a l l eges to

be

damages for

breach of

cont rac t .

On

February

7,

1989,

pe t i t ione r rece ived

from

respondent Let t e r of

Assessment

No.

FAS-I-85-89-000163

(subjec t of

CTA Case No.

4436 , dated January

27,

1989,

demanding

payment

of

the

t o t a l amount of P751,540.79

represent ing p e t i t io n e r s 1985

def i c i ency withholding

t ax

on i n t e r e s t paid to a fore ign corpora t ion

in

the

sum

of

P406,076.11

as bas ic tax; P101,519.02 as 25

surcharge;

P243,

645.66

as i n t e r e s t and

P300. 00

as

compromise

pena l ty .

Said assessment

was pro tes ted

by p e t i t i o n e r

through a

l e t t e r , dated February 24,

1989,

which pro te s t

was

denied by

respondent in her

l e t t e r , dated

February

22, 1990, and which

was

rece ived

by

p e t i t i o n e r

on

March

15,

1990, t h i s

t ime

assess ing

the l a t t e r the t o t a l amount

of P940,

589.54,

c ons i s t i ng of P406, 076.11

as bas ic tax;

P203,038.06

as

surcharge; P331,175.37

as

i n t e r e s t and

P300.00

as compromise

penal ty .

According to respondent ,

the 25 surcharge was ad jus ted

to 50 in

view of

p e t i t io n e r s

f a i lu re to

f i l e

the

withholding

t ax

re turns

as

requi red

by Sect ion 319 of

the

Tax

Code.

On January 18, 1990, pe t i t ione r again rece ived from

respondent Let t e r of

Assessment

No.

FAS-1-86-89-00074

(subjec t

of

CTA Case No. 4811 ,

dated

January 7, 1990,

demanding payment

of

the sum

of

P660,532.54, represent ing

p e t i t io n e r s

1986

def ic iency

withholding t ax on

i n t e r e s t

pa id on fore ign loan

in

the

sum

of

P274,750.56 as bas ic

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C T A C SE

NOS.

4436 4811

4

t.;;tx;

P137,375.28

as

surcharge; P240,406.70

as i n t e r e s t

and P8, 000.00

as compromise.

The pe t i t ione r

pro tes ted

sa id assessment

in

a

l e t t e r dated February 11, 1990,

which was rece ived by

respondent

on February 13, 1990.

On seve ra l occasions beginning

May

up

to

Ju ly 1990,

p e t i t i o n e r

1

s

counsel conferred with examiners

of

the

Banks, Insurance

and

Financing

Divis ion of

the BIR

and

expla ined why

the

a foresa id assessments should

be

withdrawn. Therea f t e r the

mat ter was no

longer

r a i sed

un t i l

Apri l

27,

1992 when

pe t i t ione r

was served wi th a

Warrant

of Dis t r a in t

and/or

Levy on i t s proper t i es while

the r e so l u t i on

of the

pro tes t

was pending.

Pe t i t i one r then f i l e d these

pe t i t ions on

Apri l

6,

1990

CTA

Case

No.

4436)

and

May

27,

1992

CTA

Case

No.

4811)

In her Answer,

respondent r a i sed

the fo l lowing

Specia l and

Aff i rmat ive

Defenses:

CTA Cas e No

6

:

8.

The

books of accounts

of

the

p e t i t i o n e r

have cor rec t l y

c l a s s i f i e d

the

payments to suppl ie r s or bene f i c i a r i e s of the

l e t t e r s of c red i t

as

in te re s t

payment

which, by

i t s

na tu re i s

subjec t to the

withholding t ax

a t source .

9. The

assessment

has

not presc r ibed

s ince t h i s case

involves

t ax

evas ion a r i s ing

out of

p e t i t i o n e r

1

s

w i l l f u l l re fusa l to

pay

the

withholding

t ax on

in te re s t payments and,

therefore subjec t to the

10

-year prescr ip t ive

per iod

under Sec. 319 a) of the Tax Code,

as

amended.

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C.T.A. C SE NOS. 4436 4811

-

5

-

10. The

assessment in

quest ion was i ssued

in accordance with law and revenue regula t ions .

11. All presumptions are in favor of the

cor rec tness of

the

t ax assessments .

The

taxpayer

has the burden of proof

to

impugn

i t s

va l i d i t y

( In te rprovinc ia l Autobus Co., Inc. vs.

Col lec tor

of

In te rna l Revenue,

8

SCRA

575

[1961] ) .

CT Case

No

4811:

5. This

Honorable

Court has

no

j u r i s d i c t i o n to take cognizance of the i n s t an t

pe t i t ion ,

the re

being

no

f ina l

decis ion

yet

by

the respondent appealable

to

i t i

6 .

review

on

i t s

ln the

Pe t i t i one r dur ing the year under

(1986),

paid in te re s t

to

fore ign banks

fore ign loans or on i t s

b i l l s

payable,

t o t a l

amount

of

P

1,331,670.40i

7. Upon inves t iga t ion conducted by the

Revenue

Enforcement

Off ice r of

responden t s

Bureau, it

was

asce r ta ined tha t p e t i t i o n e r

f a i l e d

to withhold

the

cor responding

withholding

t ax

on

i t s

a foresa id

i n t e r e s t

payments

in

the

amount of P

274,750.56

thereby

r e su l t i ng

in the here in assessment for

de f ic iency withholding t ax for the year

1986

in

the

amount

of P

660, 532.54, inc lus ive

of

50

f raud

pena l ty

and i n t e r e s t

inc ident to

del inquencyi

8. The here in

def ic iency withholding t ax

assessment No. FAS-1-86-89-000074

dated

January

9,

1990, i s

in accordance

with law, and

per t i nen t BIR

implementing

ru les

and

regula t ions i

9.

Sect ion 51

(e) 2) of

the Tax

Code,

as

amended provides:

Sec t i on

51

e)

(2 . Non res iden t

foreign corpora t ions . In the

case

of

fore ign corpora t ions

subjec t to tax under

t h i s

T i t l e ,

not engaged

in t r ade or business

wi th in

the

Phi l ipp ines , the re

sha l l be

deducted

and withheld

a t

the

source

in

the

same

manner

and

upon the

same

i tems provided

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C. T A CASE

S

. 4436 4811

- 6 -

in

subsect ion

b)

(1) of t h i s

sec t ion ,

as

well

as on

remunerat ions

for

t echnica l

se rv ices

o r

otherwise , a t ax

equal

to

t h i r t y - f i v e per centum

(35 ) the reof ; · Provided,

T h a t

in te re s t on fore ign loans sha l l

be

subjec t to withholding t ax

of

f i f t e en per centum (15 ) . This

t ax sha l l be re turned and paid

in

the

same

manner and subjec t

to the

same

condi t ions as

provided in

Sect ion 54

(now 52) .

xxx

xxx . nderscoring

supp l i

)

.

10. For f a i lu re of

pe t i t ione r to withhold

the cor responding

15

withholding t ax due on

the

i n t e r e s t payments

made

by t on i t s fore ign

l o a n s /b i l l s

payable and to

f i l e the

r e t u rn

therefor ,

the impos i t ion of the

50

f raud

pena l ty i s

va l i d and

in

order , the same being

in

accordance with Sect ion 52 e) of

the

Tax

Code , as amended;

11.

Corol l a r i ly , for

f a i lu re of p e t i t i o n e r

to

f i l e

the requi red

re turn

on

the

subjec t

withholding

t ax as

requi red

under

Sect ion

51 e)

2), wi t h i n

the per iod requi red by law,

presc r ip t ive period

for respondent

Commissioner

to assess

pe t i t ione r i s t en 10) years

from

the

date of the

discovery

of such omiss ion to f i l e

the

re turn ,

pursuant

to

Sect ion 269

(now

223)

of the Tax Code,

as

amended which

provides:

' ec t ion 269 Except ion as

to

period of l imi t a t ion of

assessment and co l l ec t i on of

taxes .

a)

in

the

case

of

a

f a l se

or

f raudulent

re turn

with

in ten t

to

evade

t ax or

f a i lu re

to

f i l e a re turn ,

the

tax may

be

assessed

, or a proceeding in

court

for

the co l l ec t i on of

such

t ax may be begun without

assessment , a t any t ime with in

t en years a f t e r

the

discovery of

. t .he_ f a l s i t y , f raud

or omission:

Provided ,

That

in

a

f raud

assessment w

hich

has become

f ina l

and executory,

the

fac t

of

fraud

sha l l

be

jud ic ia l ly

taken

cognizance

of

in

the

c iv i l

o r

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C.

T A

CASE NOS. 4436 4811

- 7 -

cr iminal ac t ion

for

the

co l l ec t i on the reo f .

XXX

XXX XXX

Inasmuch as responden t s Revenue

Enforcement

Off ice r

s t a r t e d conduct ing

the

t ax inves t iga t ion

in

t h i s

case

only

on November

11,

1987,

the is suance of

the assessment

on

January

9,

1990

aga ins t

the

pe t i t ione r was

well with in

the

presc r ip t ive

period provided for under the a fo rec i t ed

Sect ion

269 of

the

Tax Code;

12. The i s suance

of

Warrants of

Dis t r a in t

and

Levy

was

in

accordance

with

the

provis ion

of

Sect ion

205

in

r e l a t ion

to

Sect ion

207,

both

of the Tax

Code, as amended;

13.

All presumptions are

in

favor

of

the

cor rec tness

of the Assessment

(Provincia l

Autobus Co., Inc. vs .

Commissioner

of

In t e rna l

Revenue,

G.R

. No. L-1775,

Ju ly

31, 1963, 8 SCRA

527) and

the

burden of proof i s

upon

p e t i t i o n e r

to prove

otherwise .

On Ju ly 3,

1992,

pe t i t i one r s counsel

moved

to

consol ida te CTA Case No.

4436 with CTA

Case No.

4811.

Since

both cases involve the same

pa r t i e s

and the same

i s sues

and the re being

no objec t ion on

the pa r t of

respondent,

sa id

motion was

granted

in

open cour t .

This

orde r to conso l ida te was subsequently confirmed in a

Resolut ion , dated September

24, 1992.

The i s sues presented

before

Us are as fol lows:

1.

Are

the

addi t iona l payments on top of the

pr inc ipa l obl iga t ion incurred by the p e t i t i o n e r to

be

pa id to the

suppl ie r ,

in te re s t on fore ign

loans

subjec t

to

the

15 f ina l

withholding t ax?;

2. Has the responden t s r igh t

to assess

a l ready

presc r ibed? and

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C T A C SE

NOS.

4436 4811

- 8 -

3.

Did

the respondent e r r

when t i ssued a warrant

of d i s t r a i n t and

l evy

pending r e s o lu t ion of the p r o t e s t

f i l e d by

pe t i t i one r?

As regards

the

f i r s t

i ssue ,

p e t i t i o n e r in t roduces

the

idea t ha t what they

pa id

to Samsung are

l iqu ida ted

damages and not i n t e r e s t

on

a

fo re ign

loan .

I t i n s i s t s

t ha t the ob l iga t ion of the

p e t i t i o n e r under the

l e t t e r s

of

c r e d i t does

not f a l l

under

the def i n i t i on of a fore ign

loan , to s t a t e :

Sect ion

2 e f in i t ion o f fore ign loan

For

purposes of

these

regula t ions ,

the

te rm

fo re ign loan sha l l r e f e r to loan cont rac t s ,

inc luding a l l

debt

i tems,

whether

in kind o r in

cash, which are payable in

fo re ign

currency o r

in

kind,

en te red i n to by a Phi l ippine r e s ide n t ,

corpora te o r otherwise , with a non-res iden t .

These c ons i s t

of loans

of

the Centra l Bank, the

Nat ional

Government and i t s i n s t rumen t a l i t i e s ,

government

corpora t ions

and f inanc ia l

i n s t i t u t i o n s ;

loans

of the

pr i va t e sec t o r

inc luding t r ade

c red i t s

(D/A and 0/A)

which

a re normal ly renewable

and

o ther revolv ing

c red i t arrangements .

Therefore ,

fo re ign

loans

s h a l l inc lude the purchase of

goods and

se rv ices

on c red i t

by a

Phi l ipp ine r e s ide n t

from a

non-res ident

e i t h e r under defe r red

payment

te rms o r

on ins ta l lment .

xxx (Rev.

Regs. 4-75, Ju ly 22, 1975) .

e do not agree .

Sect ion

53 (e)

(2) of

the 1985

Tax Code

c l e a r l y

provides

as fo l lows:

(2)

Non - res ident fore ign corpor t ions .

In

the

case of

fo re ign

corpora t ions

sub jec t

to t ax

under

t h i s

Ti t l e , not engaged

in t r ade

o r

bus ines s w i th in the Phi l ipp ines ,

the re

sha l l

be deducted and withhe ld

a t the

source

in

the same

manner and upon

the same

i tems as

provided in

subsec t ion (b)

(1)

of t h i s

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C.

T A C SE

NOS. 4436 4811

- 9 -

sec t ion

as

wel l

as on remunerat ions

for

technica l se rv ices

o r

otherwise a t ax equal

to

t h i r t y - f i ve

per

centum

(35 )

the reof :

Provided , That i n t e r e s t on fore ign loans

sha l l

be

subjec t

to

withholding t ax of

f i f t e en per centum (15 ) . This t ax sha l l

be

re turned

and

paid in

the same

manner

and

subjec t to the

same

condi t ions as provided in

Sect ion

54.

This deduct ion

and withholding

sha l l not

be requi red

in

the

case of

re insurance premiums

ceded

to fore ign

insurance

corpora t ions not

engaged

in t r ade

or business in

the

Phi l ipp ines .

I t i s c lea r from the aforequoted de f in i t i on provided

by Revenue Regulat ions

No. 4-75

t ha t

what

was obta ined

by

FERM P from

Samsung i s a fore ign loan s ince a fo re ign

loan covers purchase of goods

on

c red i t by a Phi l ipp ine

r e s i den t from

a non-res ident fore ign corpora t ion e i t h e r

under defe r red payment terms

o r

on

ins ta l lment .

I f pa id

on

t ime FERM P pays

no

in te re s t but because of the

delay in payment brought about by

the

CB Circula r

and

which

resu l ted

in

the r e s t ruc t u r i ng

of the

loan FERM P

was charged with a corresponding

i n t e r e s t . The

l e t t e r s

of

c red i t upon which

the

pe t i t ione r i ssued the

dra f t s

in

favor

of Samsung were merely

the means

to obta in

the

loan .

Also t i s not

correc t to

s ta te t ha t

what was

pa id

to

Samsung are

l iqu ida ted damages because as defined in

Ar t i c l e

2226

of the

Civi l

Code

l iqu ida ted damages are

those agreed

upon by

the pa r t i e s

to

a

cont rac t to

be

pa id

in

case of breach

thereof

.

I t i s

to be

noted t ha t

when

Samsung

and FERMAP/petitioner

agreed

to

pay

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C.T A

C SE

NOS .

4436

4811

- 10 -

i n t e res t , t was because of

the

breach t ha t

had a l ready

taken

place . What

was

paid i s in the na ture

of

compensatory i n t e r e s t

which i s defined as

i n t e r e s t

given

by way of

damages (Civi l Code, Paras ,

1985

Ed.,

Vol. IV,

p . 148) .

However, while what was paid

i s

not l i qu i da t ed

damages, t i s

of the same token

as

compensatory i n t e r e s t

s ince both compensate

for damages

caused.

And

s ince

l i qu i da t ed

damages are taxable income

to

the

extent

t ha t

they

represent

compensation

for lo s t

p ro f i t s

(BIR Rulings

dated September 8,

1954 and September 21, 1990, Bar

Reviewer

in

Taxat ion,

Nolledo,

1987

Ed., p. 187),

t

fo l lows then t ha t the in te re s t t ha t was paid

in

the

i n s t an t case are l ikewise

to

be t r ea t ed as t axable income

and,

therefore ,

subjec t to

the

15

withholding

tax.

Pe t i t i one r a lso contends

tha t the r igh t

of

respondent

to assess

and co l l ec t the taxes have a l ready

presc r ibed .

Again, we

do not agree .

Nowhere

in

the records

did

we f ind any

f ina l

withholding

t ax

re turn

supposedly

f i l e d

by

p e t i t i o n e r

.cover ing

the subjec t assessments .

Under Sect ion 223

of

the Tax

Code,

( i )n the case

of

xxx

f a i lu re

to

f i l e a

re turn ,

the

t ax may

be

assessed or

a

proceeding in

court

for the co l l ec t ion

of such t ax

may

be

begun without

assessment a t

any

t ime with in t en years

a f t e r the

discovery of the

xxx omission.

Since

presc r i p t i on

of

the

Government s r igh t

to assess t axes i s

an

af f i rmat ive

ci

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C T A C SE NOS. 4436 4811

11

defense ,

it i s incumbent on the taxpayer

to

prove t ha t

t ax re turns were ac t ua l l y f i l ed so t ha t the benef i t of

the

t h ree -yea r p re sc r i p t i ve period

may be

ava i led of

Taligaman Lumber

Co.

v

Col lec tor 4 SCRA 84 )

But even

assuming

arguendo tha t

a

re turn was f i l ed ,

still presc r i p t i on

had

not

se t

in .

Since

t axes

withheld

from i n t e r e s t on fore ign loans

are requi red

to be

pa id

wi th in twenty-f ive

25) days

from

the

c lose of each

calendar

quar te r

Rev. Regs. 4-75), the

assessment

which

was

i ssued

by

respondent on January 27,

1989

in

CTA

Case

No.

4436 involv ing pe t i t i one r s 1985

def ic iency

withholding t ax was

still

with in the

th ree-year

presc r ip t ive period s ince the

l a s t

day for the p e t i t i o n e r

to

f i l e

a

r e t u rn

and

pay

the

t ax

due

was

on

January

25,

1986

which

f e l l on

a

Saturday; hence,

the

l a s t

day l

cons idered

to be

the

next

working day

which i s Monday,

January 27, 1986.

The same

holds

t rue in

CTA

Case

No.

4811

involv ing pe t i t i one r s 1986 def ic iency withholding

t ax

where the assessment not ice

was

i s sued on January 9,

1990,

well

with in the

prescr ibed three -yea r

per iod

count ing

from

January 25, 1987, which i s

the

l a s t day

of

payment of the tax.

F ina l ly ,

as

to whether or not the respondent e r red

when

it

i s sued a Warrant of

Dis t ra in t

and

Levy

CTA

Case

No. 4811) without

reso lv ing f i r s t

pe t i t i one r s

pro te s t ,

We answer in the negat ive .

This

i s

not

the f i r s t

t ime

t ha t

We

have been confronted with

such i s sue where We

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


DECISION

C T A CASE NOS. 4436 4811

-

12

-

held

t ha t the is suance

of

a

warrant

of

d i s t r a i n t

and

levy

to

enforce

co l l ec t i on of the def ic iency assessment

was

tantamount

to

an

out r igh t

denia l of

the

request

for

recons ide ra t ion Vicente Hilado v. Commissioner

o f

nternal

Revenue, CTA

Case No. 1256,

February

25, 1964).

Further , the

Supreme

Court

in

the

case

of Commissioner of

In t e rna l Revenue vs. Algue,

Inc . ,

158 SCRA

9,

l ikewise

ru led tha t :

I t i s

t rue

tha t

as

a ru le the warrant of

d i s t r a i n t and levy

i s

proof of the f i na l i t y of

the assessment and renders hopeless a request

for reconsidera t ion, being tantamount to

an

ou t r i gh t denia l thereof

and makes the s a id

request deemed r e j ec t ed .

However,

while

We

ru le aga ins t

here in

pe t i t ione r ,

t h i s

Court

be l ieves tha t

the impos i t ion of

the 50

f raud

pena l ty i s not warranted.

The

mere

f a i lu re of

the

p e t i t i o n e r

to

withhold

the

corresponding

15

withholding

t ax

and

to

f i l e

the corresponding re turn does not

of

i t s e l f manifes t

f raud, consider ing

the

circumstances

which

caused

pe t i t i one r ' s non

-

payment

of

the

t ax

due.

Pe t i t i one r f a i l ed

to pay on

t ime

due to the Circula r s

issued by the Cent ra l Bank

and

t honest ly be l ieved

t ha t

the

i n t e r e s t s t paid are l iqu ida ted damages

which

p e t i t i o n e r thought are

non- taxable .

Fraud i s

a

se r ious

charge

and

to

be susta ined , t

must be

supported by c lea r

and

convinc ing

evidence

(

Republ ic

v . Ker

Co

, Ltd. L-

216

0 9 sep t

o

2 9 19 6 6 •

Fraud being

a

quest ion

of

fac t

8/10/2019 CTA_00_CV_04436_D_1998JUN24_ASS


'

DECISION

C.T.A.

CASE

NOS. 4436 4811

-

13

-

must

be

a l leged and

proved

(Gutierrez v CTA,

L-9738;

L-

9771

May

31

1957 )

'

WHEREFORE

in

view of

a l l

the

foregoing/ p e t i t i o n e r

i s hereby ORDERED

to PAY the

respondent Commi s s ioner

of

In t e rna l

Reven

u e the

amounts

of P507

1

595.14

1

inc lus ive of

the

25

surcharge CTA

Case

No. 4436) and P343

1

438 .20

1

inc lus ive

of the

25

surcharge CTA Case

No. 4811)

p lus

20 i n t e r e s t

per annum from

the

date presc r ibed for

payment un t i l fu l ly paid

1

pursuant to Sect ion

249 b)

of

the Tax o e

as amended .

No

pronouncement

as

to

cos t s

SO ORDERED .

~ - I ~ .

AMON

0

DE

Associa te

Ju

e

WE

CONCUR

CERTIFICA T ON

I hereb ce r t i f y t ha t

the

above d e c i s i o was reached

a f t e r due consul ta t ion wi t h

the members of

the

Court of

Tax

Appeals

in

accordance with

Sect ion 13

1

Ar t i c l e VIII

of

the Cons t i tu t ion

~

RNESTO

D.

ACOSTA

Presid ing Judge

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