BIR Ruling

February 20, 1997 Seaoil Petroleum Corporation Ground Floor, Meridien Bldg. 29 Annapolis St., Greenhills San Juan, Metro Manila Gentlemen : This refers to your administrative appeal from the assessment of this Office involving the amount of P652,669.62 as deficiency income tax on the gain realized from the sale of real property for taxable year 1988, inclusive of increments, and covered by Assessment No. FAN-1-88-92-004246 dated October 12, 1992. cdta In assailing the validity of the above assessment you argued that the Deed of Absolute Sale with Assumption of Mortgage between Seaoil Petroleum Corporation and Seaoil Corporation was not consummated. You likewise advanced the argument that the consideration to be given in connection therewith was not effected and that no transfer of title did ever take place. And finally, all pertinent documents related to the sale transaction including the tax return filed last June 26, 1990 were cancelled by your Office. In sum, you anchored your argument that since the parties failed to completely consummate the sale, no taxable gain has been realized. While we find the above arguments legally plausible, it is submitted that the same would hold water only if complimented with competent relevant documentary evidence. Our records show that in spite of the length of time that had elapsed, you failed to support your administrative protest with the required documentary evidence. It is a well settled rule in taxation that the burden of proof lies on the taxpayer to prove with convincing evidence the legal as well as the factual infirmities attendant in an assessment; and failure to do so is fatal considering the prima facie presumption of correctness of the said assessment unless controverted (CIR vs. Bohol Land Transportation, 107 Phil. 965). For failure to substantiate and for lack of interest, your request for reconsideration is hereby DENIED. You are hereby, requested to pay the amount of P652,669.62 as deficiency income tax for taxable year 1988, plus increments that may have accrue thereon, to the Revenue District Officer, BIR-District Office No. 42-San Juan, within five (5) days from receipt hereof, otherwise, this Bureau will enforce collection through the summary remedies provided by law. cdti This constitutes the final decision of this Bureau on the matter. Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue