Solid Bank Corp. v. Commissioner of Internal Revenue

[C.T.A. CASE NO. 5641. June 7, 2000.] SOLID BANK CORPORATION, petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N This petition for review is seeking for the refund in the amount of P5,971,479.02, allegedly representing overpaid gross receipts tax for the calendar quarters of 1996. The facts can be briefly stated as follows: Petitioner is a banking institution organized and existing under the laws of the Philippines with office address located at 777 Paseo de Roxas, Makati City. For the calendar quarters of 1996, petitioner seasonably filed its Quarterly Percentage Tax Returns reflecting gross receipts (pertaining to 5% GRT rate) in the total amount of P1,835,359,863.19, with corresponding gross receipts tax payments in the sum of P91,767,993.13, to wit: Quarter Ended Exh. Gross Receipts Gross Receipts Tax March 31,1996 A P379,651,617.72 P18,982,580.88 June 30,1996 B 404,610,952.79 20,230,547.64 September 30,1996 C 517,227,463.01 25,861,373.14 December 31,1996 D 533,869,829.67 26,693,491.47 Total P1,835,359,863.19 P91,767,993.13 ============== ============ In arriving at the computation of the gross receipts tax, petitioner alleges that it erroneously included in the taxable gross receipts the final withholding taxes derived from interest on trading account securities in the total amount of P119,429,580.36, broken down as follows: Quarter Ended Gross Amount 20% Final Tax March 31, 1997 P55,666,436.81 P11,133,287.36 June 30, 1996 137,423,659.76 27,484,731.95 September 30,1996 207,552,308.22 41,510,461.64 December 31, 1996 196,505,497.02 39,301,099.40 Total P597,147,901.81 P119,429,580.35 ============ ============= On January 30, 1996, this Court rendered a decision in C.T.A. Case No. 4720 entitled Asian Bank Corporation vs. Commissioner of Internal Revenue wherein it was held that the 20% final withholding tax on bank's interest income should not form part of its taxable gross receipts for purposes of computing the gross receipts tax. llcd In the light of this Court's decision in the aforementioned Asian Bank case, petitioner on April 15, 1998, filed a letter-request for refund or issuance of a tax credit certificate with the Bureau of Internal Revenue in the amount of P5,971,479.02 (Exhs. E, and E-1 to E-5), detailed as follows: Interest Income Subjected to the 20% Final Tax Withheld At Source P597,147,901.81 Multiply by Final Tax Rate 20% 20% Final Tax Withheld At Source P119,429,580.36 Multiply by GRT Rate 5% Overpaid GRT P5,971,479.02 ============= On April 21, 1998, without waiting for an action from the respondent, petitioner lodged its appeal in this Court in order to toll the running of the two-year prescriptive period to judicially claim a refund pursuant to Section 230 of the Tax Code, as amended. Respondent, in his Answer, raised the following Special and Affirmative defenses: 8. The ruling in the case of Collector of Internal Revenue vs. Manila Jockey Club, 108 Phil. 821, is not applicable in the instant case on the ground that the definition of the term "gross receipts" as interpreted by the Supreme Court is intended "for the purpose of the amusement tax" as provided in Section 123(b) of the National Internal Revenue Code (NIRC), hence, not applicable to the gross receipts tax (GRT) under Section 119 of the NIRC; 9. If the tax base used in the imposition of the 5% GRT is the total gross receipts minus the 20% final taxes on passive income will only result in the unlawful reduction of the amount of tax fixed by law or regulations or, worst, a subtle amendment of the said law or regulations; 10. The petition states no cause of action since it does not alleged (sic) the date/s when the tax/es sought to be refunded were actually paid; 11. In an action for tax credit/refund, the burden of proof is on the taxpayer to establish its right to the refund and failure to sustain the burden is fatal to the action for tax refund; and 12. Well-settled is the rule that claims for refund are construed in strictissimi juris against the claimants since it partakes of the nature of an exemption from taxation. In order to support its claim for refund, petitioner presented the following evidence: 1. The Quarterly Percentage Tax Returns for the year 1996 (Exhs. A to D, inclusive of submarkings); 2. The administrative claim for refund filed with the Bureau of Internal Revenue (Exh. E, inclusive of submarkings); 3. Certifications issued by the Revenue Accounting Division of the Bureau of Internal Revenue as to the receipt of gross receipts' tax payments of petitioner (Exhs. F and G); 4. Letters from the Government Securities Department of the Bangko Sentral ng Pilipinas with attached certifications of final taxes withheld and remitted to the Bureau of Internal Revenue for the years 1994, 1995 and 1996 (Exhs. H and I, inclusive of submarkings); 5. Preliminary and amended reports of SGV and Co. signed by Mr. R. R. Rubio, the commissioned independent auditor, who conducted the examination on petitioner's documents relative to the instant claim for refund (Exhs. J and M); and 6. Pre-marked documents examined by the commissioned independent auditor (Exhs. O-1 to O-347). Respondent, on the other hand, submitted his case for decision sans the presentation of evidence and memorandum. The Court is now tasked to resolve the following issues: 1. Whether or not the 20% final withholding tax on bank's interest income should form part of the taxable gross receipts for purposes of computing the gross receipts tax; and 2. Whether or not petitioner adduced sufficient evidence to support its cause. Anent the first issue, this Court in a long line of cases has already ruled that 20% final taxes on interest income should no longer form part of taxable gross receipts for purposes of computing gross receipts tax. This is the maxim behind Our decision in the case of Asian Bank Corporation vs. Commissioner of Internal Revenue, CTA Case No. 4720, dated January 30, 1996, supra , pertinent portions of which read as follows: "We agree with the petitioner that the 20% final withholding tax on its interest income should not form part of its taxable gross receipts. xxx xxx xxx This conclusion is in accord with the interpretation of the Supreme Court in the case entitled Collector of Internal Revenue vs. Manila Jockey Club, 108 Phil. 821, as quoted by this Court in disposing of a similar issue in the case entitled Compania Maritima vs. Acting Commissioner of Internal Revenue CTA Case No. 1426 dated November 14, 1996 thus: In the second place, the highest tribunal of the land interpreted the term: "gross receipts" to mean all receipts of a taxpayer excluding those which have been especially earmarked by law or regulation for the government or some person other than the taxpayer. Thus, it was held: ". . . The Government could not have meant to tax as gross receipt of the Manila Jockey Club the % which it directs same Club to turn over to the Board of Races. The latter being a Government institution, there would be double taxation, which should be avoided unless the statute admits of no other interpretation. In the same manner, the Government could not have intended to consider as gross receipt the portion of the funds which it directed the Club to give, or know the Club would give, to winning horses and Jockeys admitted 5%. It is true that the law says that out of the total wager funds 12% shall be set aside as the 'commission' of the track owners but the law itself takes official notice, and virtually approves or directs payment of the portion that goes to owners of horses as prized and bonuses of jockeys, which portion is admittedly 5% out of the 12% commission. As it did not at that time contemplate the application of 'gross receipts' revenue principle, the law in making a distribution of the total wager funds, took no trouble of separating one item from the other; and for convenience, grouped three items under one common denomination. "Needless to say, gross receipts of the proprietor of the amusement place should not include any money which although delivered to the amusement place has been especially earmarked by law or regulation for some person other than the proprietor." (The Commissioner of Internal Revenue vs. Manila Jockey Club, Inc. G.R. Nos. L-13890 and L-13887, June 30, 1960) It is to be noted that, under Section 260 of the Tax Code, a race-track is subject to an amusement tax of 20% of its gross receipts and the term 'gross receipts' embraces all the receipts of the proprietor, lessee, or operator of the amusement place." Notwithstanding the broad and all-embracing definition of the term "gross receipts" found in our amusement tax law, our Supreme Court did not adopt a literal interpretation of the said term in the case of the Manila Jockey Club, Inc., supra ." Our ruling in the above decision has already been affirmed by the Court of Appeals in the recent case entitled Commissioner of Internal Revenue vs. Citytrust Philippines, CA G.R. SP No. 52707, August 17, 1999, which involves a similar issue, thus: Accordingly the 20% final tax withheld against the Respondent's passive income was already remitted to the Bureau of Internal Revenue, for the corresponding year that the same was actually withheld and considered final withholding taxes under Section 50 of the same Code. Indubitably, to include the same to Respondent's (Citytrust) gross receipts for the year 1994 would be to tax twice the passive income derived by the Respondent for the said year, which would constitute double taxation anathema to our taxation laws ." (Emphasis supplied). The legal issue having been settled, what remains to be resolved is the factual aspect of the case. Section 230 of the Tax Code, as amended, provides that a claim for refund, both with the Bureau of Internal Revenue and with this Court, must be filed within two years from the date of payment of the tax. In counting the two-year prescriptive period, the filing of the quarterly percentage tax return should be considered as the "date of payment of the tax" (Solid Bank Corporation vs. Commissioner of Internal Revenue, CTA Case No. 5408, April 14, 1999 ; and Citytrust Investment Philippines, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 5403, April 19, 1999). Applying the above ruling in the case at bar reveals that petitioner was able to file its claim for refund with the Bureau of Internal Revenue on April 15, 1998, and the Petition for Review with this Court on April 21, 1998, both within the two-year reglementary period, reckoned from April 22, 1996, the date when Petitioner filed its 1996 First Quarterly Percentage Tax Return. Aside from proving that the Petition for Review was timely filed within the two-year reglementary period, Petitioner must also prove its compliance with the following requisites: 1. That it paid the gross receipts tax; 2. That it erroneously overpaid its gross receipts tax by including the 20% final withholding tax derived on its passive income as part of the gross receipts declared in the quarterly percentage tax returns for the period involved; and 3. That the withholding agent certifies that the 20% final withholding tax was paid on such passive income. (Bank of the Philippine Islands vs. Commissioner of Internal Revenue, CTA Case No. 5458, February 15, 1999 ; and BPI Capital vs. Commissioner of Internal Revenue, CTA Case No. 5457, March 1, 1999 ; cited in Solid Bank Corporation vs. Commissioner of Internal Revenue, CTA Case No. 5408, April 14, 1999 . ) A meticulous examination of all the evidence on record reveals that petitioner was able to comply with requirement number one and partially with requirement number three. Petitioner was able to show that it paid gross receipts tax for the calendar quarters of 1996 as evidenced by the machine validations appearing on the lower portion of the quarterly percentage tax returns (Exhs. A-1, B-1, C-1, and D-1). These payments of gross receipts tax were even certified by Ms. Carmelita SJ Pascual, Chief, Revenue Accounting Division, BIR, to have been received by the respondent's bureau (Exhs. F and G). And that the Bangko Sentral ng Pilipinas (BSP) certified that it withheld and remitted 20% final withholding tax on treasury bills purchased by petitioner through regular auction (Exhs. I, I-1, and I-2). However, We cannot trace how much 20% final withholding tax was included in the 1996 quarterly percentage tax returns of petitioner. The evidence submitted by petitioner are insufficient to guide the Court as to what portion of the alleged 20% final tax in the amount of P119,429,580.36 derived from interest on trading account securities was included by petitioner in its taxable gross receipts. Although it may be argued that the independent auditor has verified the amount of P70,911,256.73 as final taxes on treasury bills and IBODI (Liquidity Floor) was included in the gross receipts of petitioner during the year, the same cannot be given much weight by the Court (Exh. M). The audit procedures adopted by the independent auditor are insufficient to come-up with the desired result of ascertaining the propriety of petitioner's claim for refund. The audit procedures performed focused on tracing of daily summary total of interest from the schedule of daily accrual of interest to monthly subsidiary ledger without checking the authenticity of individual entries stated in the schedule and their supporting documents. Hence, We consider the schedule of daily accrual of interest to be self-serving evidence because entries therein must have been supported by another document. This Court is not also convinced that the pre-marked documents submitted by petitioner are supportive of the independent auditor's findings. This is because the information appearing in the pre-marked documents (Exhs. O-1 to O-347) do not tally with the data appearing in the schedule of accrual of interest income. The schedule of accruals of interest bears the series number of the treasury bills, issue date, due date and maturity value which are not evident in the pre-marked documents. In addition, petitioner failed to submit material supporting documents such as confirmation of sale, confirmation of purchase, trading sheets, monthly subsidiary ledger and the like that will substantiate the alleged investment of petitioner in trading accounts securities. Hence, petitioner's failure to present the pertinent documents and individual transactions that would support the certification of the independent auditor proved fatal to its claim for refund. Well-settled is the rule in this jurisdiction that a claim for refund is in the nature of a claim for exemption, hence should be construed in strictissimi juris against the taxpayer (Commissioner of Internal Revenue vs. Tokyo Shipping Co., Ltd. , 244 SCRA 332) . WHEREFORE, in the view of the foregoing, the instant petition for review is hereby DENIED due to insufficiency of evidence. SO ORDERED. (SGD.) ERNESTO D. ACOSTA Presiding Judge I CONCUR: (SGD.) RAMON O. DE VEYRA Associate Judge Separate Opinions The majority opinion denied the claim for refund due to insufficiency of evidence but upheld the ruling that the final withholding tax on certain passive income of a bank should be excluded from its gross receipts for purposes of computing the gross receipts tax. I humbly disagree with the aforementioned ruling primarily because this is based on this Court's decision in the case of Asian Bank Corporation vs. Commissioner of Internal Revenue, CTA Case No. 4720 promulgated on January 30, 1996 . The decision in the Asian Bank case which established a precedent for cases having a similar issue, has as its legal basis Section 4(e) of Revenue Regulations No. 12-80 dated November 7, 1980 which states, thus: "Section 4. . . . (e) Gross receipts tax on banks. non-bank financial intermediaries, financing companies, and other non-bank financial intermediaries not performing quasi-banking activities . The rates of taxes to be imposed on the gross receipts of such financial institutions shall be based on all items of income actually received. Mere accrual shall not be considered, but once payment is received on such accrual or in cases of overpayment then the amount actually received shall be included in the tax base of such financial institutions, as provided hereunder." (Emphasis supplied) Note that in the Asian Bank case, said bank was being assessed for deficiency gross receipts tax of 5% for taxable year 1986 which at that time the aforequoted Section 4(c) of Revenue Regulations No. 12-80 had already been amended, superseded and omitted in the amendatory Revenue Regulations No. 17-84 dated October 12, 1984. In other words, the citation of Section 4(e) of Revenue Regulations No. 12-80 by Petitioner's counsel was erroneous in the sense that it misled this Court to adopt Petitioner's legal basis. The legal basis that should have been cited is Section 8(c) of Revenue Regulations 12-80 which became Section 7(c) of Revenue Regulations No. 17-84 which provides, thus: "Section 8. . . . (c) If the recipient of the above-mentioned items of income are financial institutions, the same shall be included as part of the tax base upon which the gross receipts tax is imposed." Petitioner's counsel purposely did not cite said section because certainly it won't be able to get a refund or tax credit for the alleged overpaid gross receipts tax for obvious reasons. Section 4(e) of Revenue Regulations No. 12-80, as worded, is not a computation which is determinative of the amount to be used as basis of the 5% gross receipts tax. Rather, said Section is reflective of the method of accounting being adopted by the taxpayer, such as the cash receipts and disbursement method or the accrual method of accounting. Said methods of accounting comprise a set of rules for determining when and how to report income and deduction ( Consolidated Mines, Inc . vs . Court of Tax Appeals, L-18843, August 29, 1974 ). Thus, under the cash receipts and disbursements method, income earned by the taxpayer is not included in gross income until received and expenses are not deducted until paid within the taxable year. And in the case of the accrual method, income is included in gross income when earned, whether received or not, and expenses are allowed as deductions when incurred although not paid (BIR Ruling No. 35-98, April 13, 1998). The 5% gross receipts tax under Section 120 of the Tax Code is collectible from all finance companies doing business in the Philippines from interests, discounts and all other items treated as gross income under the Tax Code. Accordingly, its income derived from investing the excess funds in short-term market placements through commercial banks constitute income, hence, subject to the 5% gross receipts tax under said section. The fact that it has been subjected to the 20% final withholding tax under Section 50(a) is immaterial. Besides, the withholding tax is imposed under Title II of the Tax Code while the finance tax is provided under Title V thereof (BIR Ruling No. 223, November 2, 1989). The fact that the same income is subjected to two (2) different kinds of taxes would not make such payments a case of double taxation. By quoting a superseded revenue regulation, Petitioner in the Asian Bank case, led this Court to believe that indeed the basis of the gross receipts tax is total gross receipts exclusive of the 20% final withholding tax deducted and withheld under Section 50(a) of the Tax Code. Section 7(c) of Revenue Regulations No. 17-84 clearly and categorically provides that the basis of such tax is inclusive of the final withholding tax. The High Court's decision in the case of Commissioner of Internal Revenue vs. The Manila Jockey Club, Inc. , 108 Phils . 821, June 30, 1960, which was reaffirmed by the said Court in the case of Visayan-Cebu Terminal Co . , Inc . vs . Commissioner of Internal Revenue, 13 SCRA 357, February 27, 1965 cannot be considered as precedent cases, hence, inapplicable to the two cases decided by this Honorable Court in the cases of Compania Maritima vs . Acting Commissioner of Internal Revenue, CTA Case No . 1426 dated November 14, 1966 and Asian Bank Corporation vs. Commissioner of Internal Revenue, CTA Case No. 4720 dated January 30, 1996, for the following reasons: In the Manila Jockey Club, Inc. case, the Club was authorized to operate horse races in which betting was made through the sale of tickets to the public. The total amount of bets called "wager fund" were distributed pursuant to Executive Order No. 320 and Republic Act No. 309, as follows: 87% as dividends to holders of winning tickets 12 as "commissions" of the Manila Jockey Club, of which % was assigned to the Board on Races and 5% was distributed as prizes for owners of winning horses and authorized bonus for jockeys. According to the above-mentioned distribution of the "wager fund", the then Collector of Internal Revenue assessed the Club on the whole amount of its "commission" of 12. But since the Club had already paid the amusement tax based on its 7% share of the "commission", the amount assessable pertains only to the 5% for the period from November 1946 to October 1950. On various instances, the Club protested the proposed assessments and was sustained by the opinions of the Secretary of Justice rendered on three different occasions (Opinion No. 345, series of 1941; Opinion No. 249, series of 1952 and Opinion No. 340, series of 1955). Notwithstanding the opinions of the Secretary of Justice to the effect that the amount corresponding to the 5% was held only by the Club in trust for the owners of winning horses and authorized bonuses of jockeys, the then Collector of Internal Revenue demanded payment of amusement taxes for the period November 1946 to October 1950. Said demand letter was timely appealed to the Court of Appeals wherein a unanimous judgment was obtained reversing the Collector's stand on the matter. In the High Court, the position of the Secretary of Justice was sustained thereby upholding the Court of Tax Appeals' decision. Accordingly, gross receipts of the proprietor of the amusement place should not include any money which, although delivered to the amusement place was " especially earmarked " by law or legal rule and regulations for some persons other than the proprietor. Undeniably, they are money received by the racing club but they are moneys earmarked by law or regulations for winning horse owners and jockeys and never for a minute become the property of the race track. The same is true in the case of the % which the law directs the club to deliver to the Board on Races. The High Court therefore agrees with the stand of the Court of Tax Appeals that such funds representing 5% of the 12% "commissions" of the race track do not form part of the gross receipts, hence not subject to the amusement tax of 20%. The above-mentioned decision of the High Court was also applied in the case of Visayan Cebu Terminal Co . , Inc . vs . Commissioner of Internal Revenue, 13 SCRA 357, Nos . L-19530 and L-19444, February 27, 1965 . The legal issue involved in this case is the interpretation of the management contract entered into by and between the Bureau of Customs and Visayan Cebu Terminal Co., Inc. whereby the latter as contractor was appointed the sole manager of the Arrastre Service at the Port of Cebu City. In the said Management Contract, it was further agreed and understood that in consideration of the rights and privileges granted the Contractor for the management of the Arrastre Service, the Bureau of Customs shall receive twenty eight (28%) percent of the total monthly gross income derived from whatever source in connection with the operations of the Arrastre Service, payable within ten (10) days of the succeeding month. The main legal issue involved in this case is whether or not the gross receipts corresponding to the 28% of the total gross income of the Service Contractor delivered to the Bureau of Customs within ten (10) days of the following month should form part of the gross receipts subject to 3% contractor's tax under Section 191 of the Tax Code. The Court of Tax Appeals ruled in favor of the petitioner, holding the view that the said 28% payment by the Arrastre Contractor based on its monthly gross income should not form part of the gross receipts subject to 3% contractors tax and that paragraph 23 of the said Management Contract can legally be construed as a " regulation ". As the learned trial court has aptly observed: ". . . the government could not have intended to consider as gross receipts the 28% that went to one of its institutions, the Bureau of Customs, and thereby collect percentage tax on it from petitioner. To hold petitioner liable for the payment of percentage tax is unquestionably unjust and not contemplated by Section 191 of the Tax Code." prcd All the above-mentioned decisions of the High Court made specific reference to gross receipts which are especially " earmarked by law or legal rule or regulation " as not forming part of the taxable gross receipts for purposes of the gross receipts tax under the Tax Code. For this purpose, it is pertinent to define the word "earmark" as a mark put upon a thing to distinguish it from another. Originally and literally, a mark upon the ear, a mode of marking sheep and other animals. Property is said to be earmarked when it can be identified or distinguished from other property of the same nature. To set apart from others (Black's Law Dictionary, 6th Edition, p. 508). In the case of the Manila Jockey Club, Inc. Executive Order No. 320 and Republic Act No. 309 made the specific "earmarking" for distribution of the total wager fund to different persons other than the proprietor. The same is true in the case of Visayan Cebu Terminal Co., Inc. where the specific earmarking of the 28% of the total monthly gross income to be delivered to the Bureau of Customs by the Contractor was provided in paragraph 23 of the Management Contract. Such specific earmarking of the twenty percent (20%) final income tax as not includible in the gross receipts for purposes of the gross receipts tax was not provided by any law or legal rule or regulation, hence the non-applicability of the above-cited High Court decisions to the Asian Bank Corporation case. This legal observation is also in point in the case of Compania Maritima case where the non-inclusion of the 10% reserve from the total cash collection to avoid claim for refund on freight and passengers tickets not taken is not provided by any law or legal rule or regulation. In the Asian Bank Corporation case, petitioner bank alleges that subjecting the gross receipts to the 20% final withholding income tax and later to the 5% gross receipts tax is not only oppressive and obnoxious but even a confiscatory form of double taxation. Double taxation has been defined "as the taxing of the same item or piece of property twice to the same person, or taxing it as the property of one person and again as the property of another, but this does not include the imposition of different taxes concurrently on the same property or income (e.g. federal and state income taxes), nor the taxation of the same piece of property to different persons when they hold different interests in it or when it represents different values in their hands, as when both the mortgagor and mortgagee of property are taxed in respect to their interests in it, or when a tax is laid upon the profits of the corporation and also upon the dividends paid to its stockholders" (Black's Law Dictionary, 6th Edition, p. 491). This acceptable form of double taxation is reflected in BIR Ruling No. 223 dated November 2, 1989, thus: "The 5% gross receipts tax under Section 120 of the Tax Code is collectible on all finance companies doing business in the Philippines from interests, discounts, and all other items treated as gross income under the Tax Code. Accordingly, your income derived from investing the excess funds in short-term market placements through commercial banks constitutes income hence, subject to the 5% gross receipts tax under said Section. The fact that it has been subjected to the 20% final withholding income tax under Section 50(a) is immaterial. Besides, the withholding tax is imposed under Title II of the Tax Code while the finance tax is provided under Title V thereof." (BIR Ruling No. 223, November 2, 1989) For as long as the basis for the claim for refund or tax credit certificate is based on the non-inclusion of the amount representing the final withholding income tax under Section 50(a) as part of the gross income subject to gross receipts tax, this dissenting opinion will stand. For purposes of the amusement tax under Section 260 of the Tax Code, the term 'gross receipts' embraces 'all the receipts' of the proprietor, lessee, or operator of the amusement place. The words 'all the receipts' refer to the total amount of cash received which becomes part of the funds of the taxpayer and does not include any money which has been specially earmarked by any law or legal rule or regulation for some other person other than the proprietor, lessee or operator of the amusement place. Receipts means actually received (Philippine Long Distance Telephone Co . vs . Collector of Internal Revenue, G . R . No . L-3222, January 21, 1952) for itself and not for others, for otherwise they would not be receipts (Manila Jockey Club, Inc . vs . Collector of Internal Revenue, CTA Case No . 205, April 15, 1958 ; Jai Alai Corporation of the Philippines vs . Araneta, CTA Case No . 108, July 31, 1956 [Annotated, NIRC by Commissioner Jose Araas, 1988 Edition, p . 687) . WHEREFORE, in view of the foregoing, I hereby register my dissent to the majority opinion and vote for the denial of the claim for refund for lack of legal basis. (SGD.) AMANCIO Q. SAGA Associate Judge