Cta 3D CV 08324 D 2014jun10 Ass
Cta 3D CV 08324 D 2014jun10 Ass
Cta 3D CV 08324 D 2014jun10 Ass
THIRD DIVISION
BAUTISTA, Chairperson
-versus- FASON-VICTORINO, and
RINGPIS-LIBAN, JJ.
Promulgated:
COMMISSIONER OF
INTERNAL REVENUE, JUN 10 201~
Respondent. _,.- ;o.'Jo a.,., ·
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
Fabon-Victorino, J.:
/
2
Par. 4, Summary of Admitted Facts, JSF, docket, p. 204.
3
Pars. 5 and 6, Summary of Admitted Facts, JSF, docket, p . 204 .
4
Par. 7, Summary of Admitted Facts, JSF, docket, p. 204.
5
Pars. 8 and 9, Summary of Admitted Facts, JSF, docket, p. 204 .
6
Par. 10, Summary of Admitted Facts, JSF, docket, p. 204.
7
Par. 11, Summary of Admitted Facts, JSF, docket, p. 204.
8
Par. 12, Summary of Admitted Facts, JSF, docket, p. 204; Exhibit " A" .
DECISION
CTA CASE NO. 8324
Page 3 of 36
DISCUSSION/RULING
/
11
Par. 10, Summary Of Admitted Facts, JSF, docket p. 205 .
12
Annexes K, L, M, N, 0 , P, Q, and R, docket pp . 94-103.
13
Par. 11, Summary Of Admitted Facts, JSF, docket p. 205.
DECISION
CTA CASE NO. 8324
Page 9 of 36
14
Oceanic Wireless vs. Commissioner of Internal Revenue, G.R. NO . 148380, December 09,
2005 .
15
Exh ibit A, docket p. 28.
16
RCBC vs. CIR, G.R. No. 168498, April 24, 2007.
17
Fishwealth Canning Corporation vs. CIR, G.R. No . 179343, January 21, 2010.
18
Par. 12, Summary of Admitted Facts, JSF, docket p. 205.
DECISION
CTA CASE NO. 8324
Page 10 of 36
19
Commission of Internal Revenue vs. Hantex Trading Co . Inc., G.R. No. 136975, March 31,
2005.
DECISION
CTA CASE NO. 8324
Page 11 of 36
20
Docket, pp . 219 - 221.
DECISION
CTA CASE NO. 8324
Page 12 of 36
TAX AMOUNT
Income Tax p 34,185,465.97
Value-added Tax 10 668,847.24
Withholding Tax-Expanded 200,678.41
Withholding Tax-Expanded 16,489.54
Withholding Tax-Final 1 948,768.53
Compromise Penalty 1,000.00
TOTAL P47 ,021,249.69
1. Undeclared Sales
a. Arising from royalties of P6,372,165.79
paid by petitioner to Symmetry
Corporation P49,167,727.00
b. Arising from petitioner's alleged undeclared
importations 1,650,134.00 P50,817,861.00
2. Disallowed Expenses not subjected to EWT 3,711,336.56
3. Unsupported various expenses 3,364,471.73
4. Net Operating Loss Carry Over (NOLCO) 2,888,813.00
Petitioner and the ICPA also shared the view that the
amount of P6,372,165.79, indicated in BIR Form No. 1601F
as other payments to NRFCs, actually pertained to
commissions billed by Symmetry Corporation in the U.S. for
the sales made by Philippine downlines or distributors and
not to undeclared sales.
23
Ex hibit " A-1 " .
24
Ibid.
25
Exh ibit " Q-2".
DECISION
CTA CASE NO. 8324
Page 15 of 36
26
Exhibit "Q - 2", docket, p. 303.
27
Exhibit " B- 2- b".
DECISION
CTA CASE NO. 8324
Page 16 of 36
B. Undeclared sales
arising from
importations in the
amount of
P1,650,134.00
28
Exhibit "Q-2", docket, p. 304.
DECISION
CTA CASE NO. 8324
Page 18 of 36
2. Disallowed expenses
allegedly not
subjected to
withholding tax
C. Security Services
31
Exhibit " Q- 2", docket, p. 305 .
DECISION
CTA CASE NO. 8324
Page 21 of 36
D. Janitorial Services
F. Utilities
G. Telephone Expense
H. Literature Inventory
I. Office Supplies
3. Disallowed various
expenses amounting to
P3,364,471.73
32
Exhibit " Q- 2" . docket, pp . 306-307 .
33
Exhibit "A".
DECISION
CTA CASE NO. 8324
Page 24 of 36
34
Exhibit "Q-2", docket, pp. 307-308.
DECISION
CTA CASE NO. 8324
Page 25 of 36
35
Exh ibit " A" .
DECISION
CTA CASE NO. 8324
Page 26 of 36
36
Exhibit "Q-2", docket, p. 308.
DECISION
CTA CASE NO. 8324
Page 27 of 36
3,364,471. 73
Net Taxable Income per Audit PS3,354,722.29
1. Undeclared Sales
A. Arising from royalties of
P6,372,165. 79 paid by petitioner
to Symmetry Corporation P49,167,727 .00
B. Arising from petitioner's alleged
undeclared importations 1,650,134.00 P50,817,861.00
2. Disallowed Input VAT
A. Excess Input Tax Claimed on
Capital Goods 44,345.94
B. Input Tax from Non-VAT Suppliers 429,779.16 474 125.10
3. Discrepancy between Input VAT
on Importation per Return and
Input VAT per Summary of
Importation 780.07
37
See discussion in item I.l.A.
38
See discussion in item I.l.B.
39
Exhibit " Q- 2".
DECISION
CTA CASE NO. 8324
Page 29 of 36
Final
Income Withholding
Payment Rate VAT
Non-Resident Foreign p
Corporations 6,372,165.79 10% p 637,216.58
Non-Resident Owners of
Cinematographic Films 3,992,025.00 10% 399,202.50
Deficiency Final Withholding
VAT P10,364,190. 79 P1,036,419.08
1. Expanded Withholding
Tax - P200,678.41
40
Deficiency EWT P3,711,336.56 P101,452.09
/
See discussion in item 1.2.
DECISION
CTA CASE NO. 8324
Page 33 of 36
2. Expanded Withholding
Tax P16,489.54 and
Compromise Penalty
Pl,OOO.OO
41
Par. 13, Summary of Admitted Facts, JSF, docket, p. 205.
42
Par. 14, Summary of Admitted Facts, JSF, docket, p. 205 .
DECISION
CTA CASE NO. 8324
Page 34 of 36
25°/o
TAX TYPE BASIC TAX SURCHARGE TOTAL
Income Tax p 14,255,877.13 p 3,563,969.28 p 17,819,846.41
DEFICIENCY INTEREST
TAX TYPE COMPUTED FROM
Income Tax April 15, 2005
VAT January 25, 2005
EWT
Final Withholding VAT
January 15, 2005
January 10, 2005 /
DECISION
CTA CASE NO. 8324
Page 35 of 36
SO ORDERED.
We Concur:
~. ~ ~ _, '-..._~
MA. BELEN M. RINGPIS-LIBAN
Associate Justice
ATTESTATION
CERTIFICATION
Presiding Justice