SM Investments Corp. v. Commissioner of Internal Revenue

SPECIAL SECOND DIVISION [C.T.A. CASE NO. 9322. March 4, 2019.] SM INVESTMENTS CORPORATION , petitioner , vs .COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION CASTAEDA, JR. , J p : STATEMENT OF THE CASE This Petition for Review filed by SM Investments Corporation, seeks for the refund or issuance of a Tax Credit Certificate (TCC) in the amount of P1,170,533,633.00, representing its alleged excess and unutilized Creditable Withholding Tax (CWT) for the calendar year ended December 31, 2013. cHECAS STATEMENT OF FACTS Petitioner is a domestic corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with principal office at 10th Floor One E-com Center, Harbor Drive, Mall of Asia Complex, CBP-IA, Pasay City. 1 Respondent is the Commissioner of the Bureau of Internal Revenue (BIR),duly appointed to exercise the powers and perform the duties of his office including, inter alia ,the power to decide disputed assessments, refunds of internal revenue taxes, fees, other charges, and penalties imposed in relation thereto, or other matters arising under the Tax Code. He holds office at the BIR National Office Building, Agham Road, Diliman, Quezon City. On April 2, 2014, 2 petitioner filed through the Electronic Filing and Payment System (EFPS) its Annual Income Tax Return (ITR) for the year ended December 31, 2013, while on April 3, 2014, 3 petitioner received through electronic mail the BIR's acknowledgement receipt. On the same date, or on April 3, 2014, 4 petitioner manually filed the subject Annual ITR. aTHCSE Meanwhile, under Item No. 20 of petitioner's Annual ITR, it appears that petitioner made an overpayment in the amount of P1,388,739,568.00, which it intends to refund through the issuance of a TCC as shown under Item No. 21 thereof. Consequently, on February 18, 2015, 5 petitioner filed its administrative claim for refund. On March 2, 2015, the BIR through OIC-Assistant Commissioner Large Taxpayers Service, Nestor S. Valeroso, issued a Letter of Authority 6 (LOA) to inspect petitioner's pertinent records. However, the BIR failed to act on petitioner's claim for refund. Thus, on April 1, 2016, 7 petitioner was constrained to file the instant Petition for Review. On June 28, 2016, 8 respondent filed his Answer, where he essentially argued that petitioner failed to submit the relevant documents under Revenue Memorandum Order (RMO) No. 53-98, in connection to its claim for refund. AHDacC On September 30, 2016, the parties filed their Joint Stipulation of Facts and Issues. 9 On October 14, 2016, the Court issued the Pre-Trial Order. 10 During trial, petitioner presented the following witnesses: Ms. Helen Grace D. Dela Cruz 11 Senior Assistant Vice President for Controllership of petitioner; Atty. Adan T. Delamide 12 Court-appointed Independent Certified Public Accountant (ICPA);and Ms. Cecilia R. Patricio 13 Senior Vice President for the Corporate Tax Division of petitioner. Further, on June 8, 2017, petitioner filed its Formal Offer of Evidence. 14 On the other hand, during the hearing on April 11, 2018, respondent's counsel manifested that she has no witness to present. Consequently, the Court directed the parties to file their respective memoranda. 15 On May 11, 2018, respondent filed his Memorandum (For the Respondent) 16 while on May 28, 2018, petitioner filed through registered mail its Memorandum. 17 Thus, on June 5, 2018, 18 the Court issued a Resolution submitting the case for decision. Hence, this Decision. STATEMENT OF THE ISSUE The main issue to be resolved in this case is whether petitioner is entitled to its claim for refund or issuance of a TCC in the amount of P1,170,533,633.00, representing its alleged excess and unutilized CWT for the calendar year ended December 31, 2013. 19 cAaDHT THE RULING The Court has jurisdiction to entertain the instant Petition The Court shall first determine whether it has jurisdiction to entertain the instant Petition. Sections 204 (C) and 229 of the National Internal Revenue Code (NIRC) of 1997, as amended, respectively provide: "SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes . The Commissioner may xxx xxx xxx (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund." IDSEAH "SEC. 229. Recovery of Tax Erroneously or Illegally Collected . No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however ,That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid." It is settled that Sections 204 and 229 of the NIRC pertain to the refund of erroneously or illegally collected taxes. Section 204 applies to administrative claims for refund, while Section 229 to judicial claims for refund. In both instances, the taxpayer's claim must be filed within two (2) years from the date of payment of the tax or penalty. 20 HCaDIS Here, petitioner filed through EFPS its Annual ITR on April 2, 2014. Counting two (2) years from the said date, petitioner had until April 2, 2016 within which to file both its administrative and judicial claims for refund, respectively. Considering that petitioner filed its administrative claim on February 18, 2015 and its judicial claim on April 1, 2016, both claims were timely filed. As such, the Court has jurisdiction to entertain the instant Petition. Petitioner has the liberality to choose the documents necessary to substantiate its claim for refund As stated earlier, respondent asserts that petitioner failed to submit relevant documents under RMO No. 53-98, in support of its claim for refund. The Court finds respondent's assertion untenable. aCIHcD The definition of the phrase "relevant supporting documents" is already well-settled. In the case of Commissioner of Internal Revenue v. First Express Pawnshop Company, Inc. , 21 the Supreme Court ruled that relevant supporting documents are those documents necessary to support the legal basis in disputing a tax assessment as determined by the taxpayer. The BIR can only inform the taxpayer to submit additional documents. The BIR cannot demand what type of supporting documents should be submitted. Otherwise, a taxpayer will be at the mercy of the BIR, which may require the production of documents that a taxpayer cannot submit. 22 While the present case does not involve tax assessment, the above-ruling of the Supreme Court is applicable in this case, such that the BIR cannot determine what type of document petitioner needs to produce in order to prove its claim for tax refund. In other words, petitioner has the liberality to present any evidence which, to its mind, is sufficient to prove its claim. Petitioner is partially entitled to its claim for refund Petitioner's basis for its claim is Section 76 of the NIRC of 1997, as amended, which provides: "SEC. 76. Final Adjustment Return . Every corporation liable to tax under Section 27 shall file a final adjustment return covering the total taxable income for the preceding calendar or fiscal year. If the sum of the quarterly tax payments made during the said taxable year is not equal to the total tax due on the entire taxable income of that year, the corporation shall either: (A) Pay the balance of tax still due; or (B) Carry-over the excess credit; or (C) Be credited or refunded with the excess amount paid, as the case may be. AHCETa In case the corporation is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, the excess amount shown on its final adjustment return may be carried over and credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed therefor ." (Emphasis supplied) Based on the foregoing, the corporate taxpayer's excess tax credits or overpaid income tax in a given taxable year may either be refunded (either in the form of cash or tax credit certificate) or carried-over/applied to the succeeding taxable years. However, once the option to carry-over has been made, the same becomes irrevocable for that taxable period. A perusal of petitioner's Annual ITR for taxable year 2013 23 shows that the excess tax credits as of December 31, 2013 in the amount of P1,388,739,568.00, 24 which petitioner marked as "To be issued a Tax Credit Certificate (TCC)," 25 consisted of the balance of the prior year's excess credits amounting to P218,205,935.00 and creditable taxes withheld during the year in the aggregate amount of P1,170,533,633.00, as shown below: 26 cHaCAS Income Tax Due P534,208,518.00 Less: Excess MCIT applied this current taxable year 122,775,252.00 Balance P411,433,266.00 Less: Prior Year's Excess Credits 629,639,201.00 Balance of Prior Year's Excess Credits P(218,205,935.00) Add: Creditable Taxes Withheld During the Year: From Previous quarters P(263,179,666.00) For the fourth quarter (907,353,967.00) (1,170,533,633.00) Excess Tax Credits P(1,388,739,568.00) Inasmuch as only the prior year's (2012) excess credits in the amount of P218,205,935.00 was carried-over by petitioner in its original Annual ITR for taxable year 2014, 27 the tax credits for taxable year 2013 in the amount of P1,170,533,633.00 may be refundable pursuant to Section 76 of the NIRC of 1997, as amended. ScHADI However, in order to be entitled to a claim for refund or issuance of a TCC of excess/unapplied creditable withholding tax at source, petitioner must satisfy the following requirements: 28 1.) That the claim for refund was filed within the two-year prescriptive period as provided under Section 204 (C) in relation to Section 229 of the NIRC of 1997; 2.) That the fact of withholding is established by a copy of a statement duly issued by the payor (withholding agent) to the payee, showing the amount paid and the amount of tax withheld therefrom; and 3.) That the income upon which the taxes were withheld were included in the return of the recipient. Considering that the timeliness of the instant claim has been resolved, the Court shall proceed to examine the propriety of the documentary evidence submitted by petitioner to support its claim. DACcIH Regarding the second requisite, Section 2.58 of Revenue Regulations No. 2-98, as amended, provides: "(B) Withholding tax statement for taxes withheld Every payor required to deduct and withhold taxes under these regulations shall furnish each payee, whether individual or corporate, with a withholding tax statement, using the prescribed form (BIR Form No. 2307) showing the income payments made and the amount of taxes withheld therefrom ,for every month of the quarter within twenty (20) days following the close of the taxable quarter employed by the payee in filing his/its quarterly income tax return. Upon request of the payee, however, the payor must furnish such statement to the payee simultaneously with the income payment. For final withholding taxes, the statement should be given to the payee on or before January 31 of the succeeding year." (Emphasis supplied) The Court commissioned ICPA reported that petitioner's prior year's CWT carried over to the taxable year 2013 in the amount of P629,639,201.07 consists of the following: 29 aICcHA From 2007 CWT P114,592,822.07 From 2012 CWT 515,046,379.00 Total P629,639,201.07 With regard to the substantiation of its CWT for the years 2012 and 2013, the ICPA found that: 30 Taxable Year 2012 CWT properly supported by BIR Form No. 2307 P499,523,165.95 CWT amount supported by BIR Form No. 2307 with the correct amount 18,518,560.35 Total CWT supported by BIR Form No. 2307 P518,041,726.30 Taxable Year 2013 CWT properly supported by BIR Form No. 2307 P1,165,515,721.47 CWT not supported by BIR Form No. 2307 3,623,616.20 CWT dated outside Taxable Year 2013 1,394,295.77 Total P1,170,533,633.44 It should be noted that for the year 2012, petitioner declared CWT in the amount of P515,046,379.00 (P355,265,679.00 plus P159,780,700.00). 31 On the other hand, the ICPA findings show that CWT amounting to P518,041,726.30 is supported by BIR Forms No. 2307. 32 Further, the ICPA noted that: 33 HSCATc "All documents reviewed, other than those with remarks stated above, are photocopies of originals we have examined. x x x" (Emphasis supplied) In his supplemental report, he stated that petitioner subsequently submitted several original copies of BIR Form No. 2307 (Certificate of Creditable Tax Withheld at Source) for verification and amended his previous findings accordingly: 34 Description 2013 2012 Exhibits marked as photocopy as of 1/20/2017 P14,087,185.15 P10,941,436.30 Exhibits with original certificates submitted after 1/20/2017 5,149,865.09 328,121.26 Total remaining tax credits supported by a photocopy of BIR Form No. 2307 P8,937,320.06 P10,613,315.04 ============ ============ Corollary thereto, the Court denied admission of the photocopied documents as evidence for failure to submit the originals for comparison. 35 Thus, the Court can only consider CWT for the taxable years 2012 and 2013 in the amounts of P1,156,578,400.97 and P504,433,063.96, respectively, as properly supported by BIR Form No. 2307, computed as follows: EHaASD 2013 2012 Total CWT declared per ITR P1,170,533,633.00 P515,046,379.00 Less: Disallowed CWT CWT not supported by BIR Form No. 2307 P3,623,616.20 P- CWT dated outside Taxable Year 2013 1,394,295.77 - CWT supported by photocopy of BIR Form No. 2307 8,937,320.06 10,613,315.04 Total disallowed CWT P13,955,232.03 P10,613,315.04 Properly supported CWT P1,156,578,400.97 P504,433,063.96 With regard to the third requisite, the ICPA reported that: 36 "14. Our review of Petitioner's ITR, particularly, Schedule 9 thereof, audited financial statements, and our interview with Petitioner's personnel, the following summarizes the total amount of gross income per CWT reported as taxable gross income: Type of Income Per FS Per ITR Per CWT Reference Dividends P14,340,256,945 - - Management and Service Fees 3,270,557,223 P3,270,557,223 P3,270,557,223 (a) Rent 1,526,377,752 1,446,222,647 1,425,475,463 (b) Gain on sale of Available-for-sale securities 166,006,083 215,818,402 - Operating Expense (1,524,191,006) (2,253,826,442) - Reimbursable charges - - 735,620,612 (c) Interest expense (6,879,240,665) (5,849,992,370) - Interest income 3,012,422,853 251,158,856 3,761,014 (d) Loss on Fair Value of derivatives (1,055,844,500) (2) - Gain on sale of properties 6,103,551 5,607,579,580 17,266,997,914 (e) Forex Gain (Loss) (331,213,848) 474,126,817 - Other Income (Loss) (135,918,609) 43,243,574 11,838,184 (f) NOLCO (1,424,193,225) Net Income P12,395,315,779 P1,780,685,061 37 P22,714,250,410 Income Statement Line 26C, ITR SAWT Below are the explanation for the foregoing items: IDTSEH (a) The amount of management and service fees covered by CWT tallies with the amount of management and service fees reported in the ITR. This means the gross income upon which the related CWT were withheld were reported part of Petitioner's gross income. (b) The amount of rent income reported in the ITR is higher by Php20,747,184. Since the income per ITR is higher, it is reasonable to assume that all gross income covered by CWT were all reported as taxable income. However, it could be possible that some tenants did not withhold or failed to issue the related CWT in 2013. The difference between the rent income per FS and per ITR pertains to PAS 17 adjustments and accretion of tenant's deposit, net of amortization of deferred rent. (c) Reimbursable charges were subjected to withholding tax but were no longer presented as a separate item in the ITR because it was already presented net together with operating expenses for ITR presentation purposes. The effect of deducting the reimbursable charges from the deductible operating expenses is the same as reporting it as gross income since the reduction of the allowable deduction results in a higher taxable income. DaIAcC (d) There is a big difference of Php247,397,842 between interest income per ITR and interest income covered by CWT. This is primarily due to the fact that no withholding were made from Petitioner's interest income from investment in bonds. (e) The gain on sale of properties pertain to the sale of various properties to one of Petitioner's affiliates. However, due to accounting rules, no gain was recognized in the Petitioner's books. Nevertheless, Petitioner was subjected to withholding tax based on the gross selling price of the transaction, the capital gain of which were reported as taxable income. Note that while the CWT shows the gross income, the amount reported in the ITR is only the gain on sale. This proves that the total amount of gross selling price Php17,266,997,914, which was subjected to withholding tax and covered by CWT, were fully reported as taxable income in the ITR with the return of taxable gain of Php5,607,579,580. Proof of gross selling price and supporting deeds of sale are presented as Exhibits P-2265 to P-2272. How the gain was computed is presented as Exhibit P-2277. (f) There is a discrepancy of Php31,405,391 between the amount of other income reported in the ITR and the amount of other income supported by CWT." SICDAa The details of the above-report are shown under Annex I of the ICPA Report, where he compared the income payments per BIR Form No. 2307/SAWT vs. the revenue per books/ITR. 38 The same schedule shows that total income payments per BIR Form No. 2307 amount to P22,714,250,410.05. Total revenue recorded in petitioner's books and reported in its ITR amounts to P22,650,617,693.72, resulting to a discrepancy of P63,632,716.33. 39 Meanwhile, a scrutiny of Annex I of the ICPA Report reveals that the revenue recorded in petitioner's books amounting to P70,422,401.03, does not have the corresponding income payments per SAWT/BIR Form 2307, as shown below: 40 TAacHE REGISTERED NAME PER FS/ITR 1 Efren Villapando P2,000.00 2 Hotel Specialist Davao 11,349,096.20 3 Hyperfashion Corp. 132,587.13 4 Hyperhome Corporation 198,880.70 5 Intercontinental Development 264,903.78 6 Irvine Construction Corp. 14,000.00 7 Lorain Health Center, Inc. 874.64 8 Magnetron 4,000.00 9 Metriccon Co.,Inc. 36,369.68 10 Multi Realty Development 13,958.09 11 Pico de Loro Beach and Co. 876,121.50 12 Premium Leisure and Amusement 13,820.42 13 SM Foundation, Inc. 230,770.09 14 SM Hotels and Entertainment 3,358,349.36 15 AAI Freigthmovers Worldwide 8,928.57 16 Airlite Int'l. Travel and Tour 103,264.28 17 Alize Voyages and Adventure 70,977.24 18 Avon Cosmetics 4,218.75 19 Brand and Lifestyle Development Partners, Inc. 436,360.70 20 CF Mgt. Corp. 1,532,527.06 21 CMA CGM Philippines, Inc. 20,000.00 22 DJA Security Services, Inc. 174.11 23 Fast Retailing Philippines 888,770.19 24 Fides Providence, Inc. 287,283.54 25 Forever 21 Philippines, Inc. 934,487.06 26 Forever Agape and Glory I 861,674.35 27 Globe Telecom, Inc. 1,618,079.04 28 Grace Valencia Virata 165,475.27 29 Innove Communications, Inc. 336,176.09 30 Jollibee Foods Corporation 572,984.42 31 Kitchen Capitale Food Services Company 530,829.96 32 Legispro Corporation 1,025,161.42 33 LF Mgt. Corp. 1,523,148.70 34 LTBG Mgmt. Corp. 1,743,141.95 35 Ma. Verena T. Eduarte 732,963.09 36 Marry Ann Bozar Pea 209,033.66 37 MCLG Mgmt. Corp. 1,015,183.72 38 Mercantile Ocean Maritime 340,677.91 39 MF Mgt. Corp. 1,560,233.95 40 MM Travel, Inc. 369,704.18 41 Nestor L. Reyes 99,361.52 42 Nimbus Cloud Computing Co. 2,413,091.25 43 Packo S. Resto II Corp. 132,276.60 44 Phil. Amusement and Gaming 836,726.35 45 Philippine Vending Corporation 144,000.00 46 Russfield Holdings Corp. 18,141.98 47 S and T Leisure Worldwide 355,562.40 48 Sharon Olano Rosario 55,530.42 49 Simply Sumptuous, Inc. 422,748.52 50 Central Business Park 1 Island A Association, Inc. 122,276.47 51 Smedd Corp. 10,992,631.34 52 Southern Star Agencia Maritima, Inc. 842,292.34 53 ST Music World, Inc. 86,950.73 54 Sto. Roberto Marketing Corp. 113,601.51 55 United Coconut Planters 72,204.11 56 United Vinyl Corporation 670,967.76 57 Uptrend Fashion Design Co. 19,358.96 58 Vanity Skin Aesthetics 252,355.47 59 Xo Minerals Resources Corp. 71,612.90 60 Wang Lai JRSB Enterprises 1,123,833.43 61 Carriedo Tenants 18,189,686.17 TOTAL P70,422,401.03 Thus, the Court shall not consider the foregoing in determining whether the corresponding income payments of the claimed CWT are reported as part of petitioner's taxable revenues for the year 2013. DHIcET The remaining P22,580,195,292.69 revenue per FS/ITR (total revenue of P22,650,617,693.72 less P70,422,401.03) was compared per client/customer according to the SAWT/Certificates of Creditable Taxes Withheld (BIR Form No. 2307) which show total income payments of P22,714,250,410.05. Meanwhile, the Court finds that the CWT claimed amounting to P943,656,142.68 should be disallowed, for failure to prove that the income payments were properly recorded in petitioner's books. Hence, they may not be reported as revenue in its return, as follows: HDICSa Registered Name Tax Rate Tax Base CWT Per FS/ITR Difference DESSERTS PLUS, INC. 1% P2,874,120.00 P28,741.20 P43,283.87 P2,830,836.13 HIGHLANDS PRIME, INC. 1% 106,966.00 1,069.66 - 106,966.00 HOTEL SPECIALIST DAVAO, INC. 1% 82,527,459.00 825,274.59 106,526,882.28 (23,999,423.28) SM ARENA COMPLEX CORPORATION 1% 7,707,041.00 77,070.41 8,554,363.35 (847,322.35) SM PRIME HOLDINGS, INC. 1% 563,297.00 5,632.97 17,226,749,738.13 (17,226,186,441.13) SUPERVALUE, INC. 1% 8,237.00 82.37 - 8,237.00 ACS OF THE PHILIPPINES, INC. 2% 125,547,138.00 2,510,942.76 126,050,053.34 (502,915.34) ADS SPECTACULAR, INC. 2% 339,067.00 6,781.34 328,789.48 10,277.52 BDO UNIBANK, INC. 2% 2,029,710.50 40,594.21 2,014,614.91 15,095.59 COSTA DEL HAMILO, INC. 2% 2,808,116.00 56,162.32 4,231,164.57 (1,423,048.57) EXL SERVICE PHILIPPINES, INC. 2% 38,211,990.56 764,240.01 41,832,605.28 (3,620,614.72) FAMILY ENTERTAINMENT CENTER, INC. 2% 1,187,102.00 23,742.04 1,184,216.93 2,885.07 FIRST ASIA REALTY DEVELOPMENT CORP. 2% 779,193.00 15,583.86 1,754,120.14 (974,927.14) FIRST LEISURE VENTURES GR 2% 200,905.00 4,018.10 305,080.65 (104,175.65) FITNESS FIRST PHILIPPINES 2% 11,407,085.50 228,141.71 10,296,715.57 1,110,369.93 HEALTH CAPITAL CORP. 2% 104,422.00 2,088.44 65,313.45 39,108.55 HEAVENLY URBAN CHEF, INC. 2% 84,684.50 1,693.69 224,075.64 (139,391.14) HIGHLANDS PRIME, INC. 2% 4,892,431.50 97,848.63 3,937,070.58 955,360.92 HOMEWORLD SHOPPING CORPORATION 2% 4,161,094.00 83,221.88 4,361,484.14 (200,390.14) HOTEL SPECIALIST CEBU, INC. 2% 17,499.50 349.99 32,394.18 (14,894.68) HOTEL SPECIALIST PICO DE LORO, INC. 2% 199,982.50 3,999.65 192,522.14 7,460.36 HOTEL SPECIALIST TAGAYTAY 2% 637,433.50 12,748.67 659,363.72 (21,930.22) INTERNATIONAL TOY WORLD I 2% 2,727,548.00 54,550.96 2,733,058.24 (5,510.24) KULTURA STORE, INC. 2% 1,280,724.00 25,614.48 1,297,321.28 (16,597.28) MANILA SOUTHCOAST DEVELOPMENT CORPORATION 2% 78,401.00 1,568.02 671,205.80 (592,804.80) MARKET STRATEGIC FIRM, INC. 2% 57,482,009.00 1,149,640.18 57,485,777.92 (3,768.92) METRO MANILA SHOPPING MECCA CORP. 2% 38,894,567.50 777,891.35 41,928,773.35 (3,034,205.85) MOF COMPANY 2% 2,981,936.50 59,638.73 3,256,239.70 (274,303.20) MULTI STORES CORP. 2% 29,934,718.00 598,694.36 33,011,162.22 (3,076,444.22) NURSERY CARE CORPORATION 2% 1,560,148.50 31,202.97 1,559,009.91 1,138.59 PH02 DAMCO PHILIPPINES, INC. 2% 1,951,513.50 39,030.27 2,111,352.69 (159,839.19) PH07 MAERSK CREW MGT. SERVICES PHILS.,INC. 2% 267,091.50 5,341.83 3,119,536.39 (2,852,444.89) PHILIPPINE SEVEN CORPORATION 2% 514,314.00 10,286.28 3,262,790.49 (2,748,476.49) PRIME SPOTS, INC. 2% 913,835.50 18,276.71 913,434.82 400.68 RUSTAN COFFEE CORPORATION 2% 1,775,192.00 35,503.84 1,790,685.04 (15,493.04) SANFORD MARKETING CORPORATION 2% 315,090,115.50 6,301,802.31 254,976,346.43 60,113,769.07 SAVORY FASTFOOD INCORPORATION 2% 776,158.50 15,523.17 848,220.45 (72,061.95) SCOTTLAND, INC. 2% 423,697.50 8,473.95 578,573.25 (154,875.75) SHOPPING CENTER MANAGEMENT CORP. 2% 15,595,278.00 311,905.56 16,052,336.27 (457,058.27) SIGNATURE LINES, INC. 2% 415,009.00 8,300.18 452,127.15 (37,118.15) SM ARENA COMPLEX CORPORATION 2% 3,794,604.00 75,892.08 1,159,892.61 2,634,711.39 SM DEVELOPMENT CORPORATION 2% 24,292,623.00 485,852.46 24,660,139.04 (367,516.04) SM KEPPEL LAND, INC. 2% 206,852.00 4,137.04 198,880.70 7,971.30 SM LAND, INC. 2% 2,685,520.50 53,710.41 4,135,973.19 (1,450,452.69) SM MART, INC. 2% 133,323,869.00 2,666,477.38 133,392,233.82 (68,364.82) SM PRIME HOLDINGS, INC. 2% 1,247,452,513.40 24,949,050.27 37,960,266.12 1,209,492,247.28 SM RETAIL, INC. 2% 56,363,964.00 1,127,279.28 56,182,107.02 181,856.98 SMX CONVENTION SPECIALIST 2% 445,869.50 8,917.39 842,074.72 (396,205.22) SPORTS CENTRAL MANILA, INC. 2% 1,101,276.50 22,025.53 1,116,066.19 (14,789.69) STAR APPLIANCE CENTER, INC. 2% 170,127,240.00 3,402,544.80 170,115,034.01 12,205.99 SUPER SHOPPING MARKET, INC. 2% 307,014,409.00 6,140,288.18 304,112,216.29 2,902,192.71 SUPERVALUE, INC. 2% 453,676,644.50 9,073,532.89 449,953,306.84 3,723,337.66 SUPPLIES STATION, INC. 2% 1,636,596.00 32,731.92 1,091,014.86 545,581.14 SURESTE PROPERTIES, INC. 2% 578,544.50 11,570.89 1,176,230.35 (597,685.85) SURPLUS MARKETING CORPORATION 2% 1,275,390.50 25,507.81 1,459,579.05 (184,188.55) TELETECH CUSTOMER CARE MANAGEMENT PHILIPPINES, INC. 2% 35,212.50 704.25 44,872.26 (9,659.76) UNITED COCONUT PLANTERS LIFE ASSURANCE CORPORATION 2% 1,182.50 23.65 - 1,182.50 WATSONS PERSONAL CARE STORES 2% 11,959,928.00 239,198.56 13,856,447.16 (1,896,519.16) WEST AVENUE THEATRES CORP. 2% 3,876,715.50 77,534.31 3,886,799.29 (10,083.79) ACS OF THE PHILIPPINES, INC. 5% 163,909,963.80 8,195,498.19 163,461,100.08 448,863.72 AK7 ENTERPRISES CORPORATION 5% 2,475.00 123.75 3,539.52 (1,064.52) ANCHOR LAND HOLDINGS, INC. 5% 8,472,064.20 423,603.21 10,458,622.47 (1,986,558.27) ASIA PILOT CAPITAL HOLDINGS, INC. 5% 7,500.00 375.00 24,677.42 (17,177.42) BDO UNIBANK, INC. 5% 7,951,144.40 397,557.22 8,237,494.95 (286,350.55) BEST RUBBER COMPANY, INC. 5% 14,929,691.40 746,484.57 19,906,255.20 (4,976,563.80) CHINA BANKING CORPORATION 5% 136,030.00 6,801.50 134,376.38 1,653.62 DESSERTS PLUS, INC. 5% 1,724,472.00 86,223.60 2,299,294.80 (574,822.80) DIGITEL MOBILE PHILS.,INC. 5% 551,574.80 27,578.74 599,178.98 (47,604.18) EXL SERVICES PHILIPPINES, INC. 5% 43,995,750.00 2,199,787.50 47,984,000.00 (3,988,250.00) HAIR GROUP SALONS, INC. 5% 612,112.20 30,605.61 604,875.14 7,237.06 HEAVENLY URBAN CHEF, INC. 5% 38,728.00 1,936.40 83,848.00 (45,120.00) HIGHLANDS PRIME, INC. 5% 6,099,362.80 304,968.14 5,214,253.07 885,109.73 HOTEL SPECIALIST CEBU, INC. 5% 50,324,611.40 2,516,230.57 39,307,434.17 11,017,177.23 HOTEL SPECIALIST TAGAYTAY 5% 35,613,509.44 1,780,675.47 48,998,561.62 (13,385,052.18) INTERNATIONAL TOY WORLD I 5% 11,355,908.80 567,795.44 11,351,955.77 3,953.03 MANILA SOUTHCOAST DEVELOPMENT CORPORATION 5% 771,146.40 38,557.32 844,916.80 (73,770.40) MARKET STRATEGIC FIRM, INC. 5% (1,634.20) (81.71) - (1,634.20) MOF COMPANY 5% 5,846,970.00 292,348.50 6,380,740.19 (533,770.19) MULTI STORES CORP. 5% 74,447.60 3,722.38 45,255.64 29,191.96 NURSERY CARE CORPORATION 5% 7,430,762.00 371,538.10 7,412,475.51 18,286.49 PH02 DAMCO PHILIPPINES, INC. 5% 3,532,658.00 176,632.90 3,870,087.00 (337,429.00) PH07 MAERSK CREW MGT. SERVICES PHILS.,INC. 5% 5,928,202.40 296,410.12 6,046,376.62 (118,174.22) PHILIPPINE SEVEN CORPORATION 5% 404,097.60 20,204.88 2,515,956.24 (2,111,858.64) ROSARIO SHARON OLANO 5% 117,147.00 5,857.35 127,560.07 (10,413.07) RUSTAN COFFEE CORPORATION 5% 2,864,403.80 143,220.19 2,913,909.83 (49,506.03) S AND T LEISURE WORLDWIDE 5% 569,181.00 28,459.05 762,848.72 (193,667.72) SAVORY FASTFOOD INCORPORATION 5% 1,422,239.20 71,111.96 1,606,778.33 (184,539.13) SCOTTLAND, INC. 5% 654,820.20 32,741.01 793,953.18 (139,132.98) SHOPPING CENTER MANAGEMENT CORP. 5% 19,438,099.80 971,904.99 19,440,710.67 (2,610.87) SM ARENA COMPLEX CORPORATION 5% 140,700,220.40 7,035,011.02 128,490,752.46 12,209,467.94 SM DEVELOPMENT CORPORATION 5% 1,233,317.60 61,665.88 832,212.53 401,105.07 SM HOTELS AND ENTERTAINMENT 5% 4,688,747.80 234,437.39 4,387,807.50 300,940.30 SM LAND, INC. 5% 4,420,917.40 221,045.87 14,302,258.92 (9,881,341.52) SM MART, INC. 5% 127,912.60 6,395.63 124,762.50 3,150.10 SM PRIME HOLDINGS, INC. 5% 16,215,214,349.20 810,760,717.46 63,564,924.44 16,151,649,424.76 SM RETAIL, INC. 5% 56,642,683.60 2,832,134.18 56,647,407.04 (4,723.44) SMART COMMUNICATIONS, INC. 5% 408,736.00 20,436.80 512,880.02 (104,144.02) SMX CONVENTION SPECIALIST 5% 29,631,230.40 1,481,561.52 43,895,403.86 (14,264,173.46) STAR APPLIANCE CENTER, INC. 5% 21,834,618.80 1,091,730.94 21,816,096.34 18,522.46 SUPER SHOPPING MARKET, INC. 5% 4,003,300.80 200,165.04 2,987,876.13 1,015,424.67 SUPPLIES STATION, INC. 5% 4,721,940.60 236,097.03 2,467,280.12 2,254,660.48 SURESTE PROPERTIES, INC. 5% 564,732.60 28,236.63 1,129,465.00 (564,732.40) SURPLUS MARKETING CORPORATION 5% 3,125,365.20 156,268.26 3,130,171.30 (4,806.10) TELETECH CUSTOMER CARE MGT. PHILS.,INC. 5% 39,721,084.40 1,986,054.22 39,476,473.19 244,611.21 UNITED COCONUT PLANTERS BANK 5% 109,435.20 5,471.76 136,794.00 (27,358.80) WATSONS PERSONAL CARE STORES 5% 17,112,880.40 855,644.02 17,301,069.95 (188,189.55) WEST AVENUE THEATRES CORP. 5% 5,433,154.60 271,657.73 5,051,079.22 382,075.38 METRO MANILA SHOPPING MEC 15% 38,894,567.67 5,834,185.15 41,928,773.35 (3,034,205.68) MULTI STORES CORP. 15% 29,871,304.60 4,480,695.69 32,972,458.23 (3,101,153.63) PRIME SPOTS, INC. 15% 2,250,000.00 337,500.00 3,000,000.00 (750,000.00) SUPER SHOPPING MARKET, INC. 15% 149,251,353.53 22,387,703.03 149,247,068.28 4,285.25 14-678 PROPERTY HOLDINGS, INC. 20% 1,291,917.70 258,383.54 1,523,594.12 (231,676.42) 18-2 PROPERTY HOLDINGS, INC. 20% 407,239.45 81,447.89 480,268.71 (73,029.26) 19-1 PROPERTY HOLDINGS, INC. 20% 50,521.00 10,104.20 59,580.80 (9,059.80) 6-24 PROPERTY HOLDINGS, INC. 20% 943,755.75 188,751.15 1,112,997.13 (169,241.38) 6-3 PROPERTY HOLDINGS, INC. 20% 472,797.05 94,559.41 557,582.60 (84,785.55) CRESCENT PARK 14-678 PROPERTY HOLDINGS, INC. 20% 209,261.80 41,852.36 246,788.23 (37,526.43) CRESCENT PARK 18-2 PROPERTY HOLDINGS, INC. 20% 61,877.00 12,375.40 72,973.23 (11,096.23) CRESCENT PARK 19-1 PROPERTY HOLDINGS, INC. 20% 89,920.10 17,984.02 106,045.24 (16,125.14) CRESCENT PARK 6-24 PROPERTY HOLDINGS, INC. 20% 163,857.90 32,771.58 193,242.17 (29,384.27) CRESCENT PARK 6-3 PROPERTY HOLDINGS, INC. 20% 69,865.90 13,973.18 82,394.80 (12,528.90) TOTAL P20,347,406,493.56 P943,656,142.68 P20,220,004,455.05 P127,402,038.51 Likewise, the following income payments in the amount of P383,246,997.60 were not properly recorded in petitioner's books and as such, they may not be reported as revenue in its return: HcDSaT Registered Name Tax Rate Tax Base CWT Per FS/ITR Difference AEGIS PEOPLESUPPORT PHILIPPINES 2% P5,757,991.50 P115,159.83 P4,928,259.48 P829,732.02 APL CO. 2% 6,059,625.00 121,192.50 5,589,555.44 470,069.56 BELLE CORPORATION 2% 4,078,682.00 81,573.64 2,152,923.48 1,925,758.52 BLOOMBERRY RESORTS AND HOTEL, INC. 2% 15,227,923.50 304,558.47 16,647,086.19 (1,419,162.69) DIGITEL MOBILE PHILS.,INC. 2% 459,156.50 9,183.13 460,958.65 (1,802.15) MAERSK FILIPINAS, INC. 2% 3,054,659.00 61,093.18 4,128,192.72 (1,073,533.72) MARKETING CONVERGENCE, INC. 2% 4,821,109.00 96,422.18 10,375,294.16 (5,554,185.16) MCC TRANSPORT PHILIPPINES 2% 770,775.50 15,415.51 1,051,112.48 (280,336.98) MEGALINK, INC. 2% 1,285,077.50 25,701.55 1,416,721.28 (131,643.78) OSTE CREWING PHILIPPINES 2% 671,348.50 13,426.97 617,735.95 53,612.55 PERNOD RICARD PHILIPPINES 2% 928,934.00 18,578.68 860,933.44 68,000.56 PH03 MAERSK FILIPINAS CREWING 2% 3,209,684.50 64,193.69 3,513,766.32 (304,081.82) PHILIPPINE GLOBAL COMMUNICATIONS, INC. 2% 333,325.50 6,666.51 329,118.67 4,206.83 PHILIPPINE LONG DISTANCE TELEPHONE COMPANY 2% 190,460.50 3,809.21 402,161.97 (211,701.47) SMART COMMUNICATIONS, INC. 2% 519,227.50 10,384.55 312,043.62 207,183.88 STREAM INTERNATIONAL GLOBAL SERVICES PHILIPPINES, INCORPORATED 2% 1,744,007.50 34,880.15 1,610,491.61 133,515.89 SUMMERHILLS HOME DEVELOPMENT CORPORATION 2% 1,056,395.00 21,127.90 2,732,523.02 (1,676,128.02) SYBASE EQUITY INVESTMENTS 2% 8,837.00 176.74 288,252.62 (279,415.62) WAREHOUSE DEVELOPMENT CO.,INC. 2% 3,030,564.50 60,611.29 3,407,409.37 (376,844.87) AEGIS PEOPLESUPPORT PHILIPPINES 5% 60,144,629.40 3,007,231.47 48,151,406.85 11,993,222.55 AIRLITE INT'L. TRAVEL & TOURS, INC. 5% 138,771.00 6,938.55 184,269.33 (45,498.33) ALIZE VOYAGES & ADVENTURES 5% 117,181.60 5,859.08 156,282.00 (39,100.40) ALTRON LOGISTICS, INC. 5% 16,207.40 810.37 11,816.13 4,391.27 APL CO. 5% 10,711,830.00 535,591.50 9,900,220.00 811,610.00 BAYAN TELECOMMUNICATIONS 5% 203,250.00 10,162.50 189,000.00 14,250.00 BLOOMBERRY RESORTS AND HOTEL, INC. 5% 19,864,783.80 993,239.19 22,100,557.28 (2,235,773.48) BRAND AND LIFESTYLE DEVELOPMENT PARTNERS, INC. 5% 703,873.60 35,193.68 852,170.72 (148,297.12) BS SQUARE COMMERCIAL, INC. 5% 196,429.20 9,821.46 214,285.68 (17,856.48) CENTRAL BUSINESS PARK 1 ISLAND ASSO.,INC. 5% 206,520.00 10,326.00 205,183.00 1,337.00 EPLDT, INC. 5% 7,173,873.00 358,693.65 6,551,223.86 622,649.14 FITNESS FIRST PHILIPPINES 5% 23,975,331.00 1,198,766.55 23,132,779.46 842,551.54 IPLUS INTELLIGENT NETWORK 5% 6,183,382.00 309,169.10 5,961,484.44 221,897.56 LEGISPRO CORPORATION 5% 1,458,356.20 72,917.81 1,751,687.45 (293,331.25) MAERSK FILIPINAS, INC. 5% 5,151,664.00 257,583.20 6,964,569.78 (1,812,905.78) MARKETING CONVERGENCE, INC. 5% 4,374,798.60 218,739.93 8,622,123.96 (4,247,325.36) MCC TRANSPORT PHILIPPINES 5% 1,474,020.20 73,701.01 1,828,272.00 (354,251.80) MEGALINK, INC. 5% 2,520,864.20 126,043.21 2,763,150.50 (242,286.30) MERCANTILE OCEAN MARITIME 5% 604,400.00 30,220.00 612,172.00 (7,772.00) MM TRAVEL, INC. 5% 684,665.60 34,233.28 746,070.75 (61,405.15) OSTE CREWING PHILIPPINES 5% 1,842,250.60 92,112.53 1,678,008.10 164,242.50 PERNOD RICARD PHILIPPINES 5% 1,704,959.80 85,247.99 1,517,861.54 187,098.26 PH03 MAERSK FILIPINAS CREWING 5% 6,426,663.00 321,333.15 7,017,242.52 (590,579.52) PHILIPPINE AMUSEMENT AND GAMING CORPORATION 5% 107,810,155.60 5,390,507.78 90,984,749.25 16,825,406.35 PHILIPPINE GLOBAL COMMUNICATIONS, INC. 5% 228,132.40 11,406.62 226,688.19 1,444.21 SITC CONTAINER LINES PHIL. 5% 25,072.20 1,253.61 42,020.97 (16,948.77) STREAM INTERNATIONAL GLOBAL SERVICES PHILIPPINES, INCORPORATED 5% 3,662,230.00 183,111.50 3,380,520.00 281,710.00 SUMMERHILLS HOME DEVELOPMENT CORPORATION 5% 2,435,036.80 121,751.84 2,249,802.00 185,234.80 SYBASE EQUITY INVESTMENTS 5% 753,980.80 37,699.04 748,222.55 5,758.25 VENDO CORPORATION 5% 18,458.80 922.94 20,438.71 (1,979.91) WAREHOUSE DEVELOPMENT COMPANY, INC. 5% 59,204,835.40 2,960,241.77 67,005,092.26 (7,800,256.86) PHILIPPINE GLOBAL COMMUNICATIONS, INC. 10% 22,607.40 2,260.74 - 22,607.40 TOTAL P383,246,997.60 P17,567,246.73 P376,593,911.75 P6,653,085.85 Further, the corresponding CWTs in the total amount of P17,567,246.73, are not fully supported by original copies of BIR Form No. 2307, as found by the ICPA. On the other hand, the amount of P8,698,111.06 is supported by photocopies of Certificates of Creditable Tax Withheld at Source (BIR Form No. 2307),detailed as follows: 41 IDaEHC Registered Name Tax Rate Tax Base CWT PHILIPPINE GLOBAL COMMUNICATIONS, INC. 1% P18,928.57 P189.29 AEGIS PEOPLESUPPORT PHILIPPINES 2% 1,915,152.75 38,303.05 APL CO. 2% 1,784,538.69 35,690.77 BELLE CORPORATION 2% 218,269.00 4,365.38 BLOOMBERRY RESORTS AND HOTEL, INC. 2% 13,106,881.23 262,137.63 DIGITEL MOBILE PHILS.,INC. 2% 31,817.86 636.36 MAERSK FILIPINAS, INC. 2% 959,225.29 19,184.51 MARKETING CONVERGENCE, INC. 2% 2,376,214.50 47,524.29 MCC TRANSPORT PHILIPPINES 2% 165,142.64 3,302.85 MEGALINK, INC. 2% 1,045,273.37 20,905.48 OSTE CREWING PHILIPPINES 2% 305,616.19 6,112.32 PERNOD RICARD PHILIPPINES 2% 220,482.79 4,409.66 PH03 MAERSK FILIPINAS CREWING 2% 570,212.96 11,404.26 PHILIPPINE GLOBAL COMMUNICATIONS, INC. 2% 98,792.24 1,975.83 PHILIPPINE LONG DISTANCE TELEPHONE COMPANY 2% 112,674.32 2,253.48 SMART COMMUNICATIONS, INC. 2% 53,537.93 1,070.76 STREAM INTERNATIONAL GLOBAL SERVICES PHILIPPINES, INCORPORATED 2% 670,063.05 13,401.26 SUMMERHILLS HOME DEVELOPMENT CORPORATION 2% 97,616.24 1,952.33 SYBASE EQUITY INVESTMENTS 2% 7,652.73 153.05 WAREHOUSE DEVELOPMENT CO.,INC. 2% 1,324,046.95 26,480.98 AEGIS PEOPLESUPPORT PHILIPPINES 5% 21,173,491.00 1,058,674.54 AIRLITE INT'L. TRAVEL & TOURS, INC. 5% 45,498.60 2,274.93 ALIZE VOYAGES & ADVENTURES 5% 38,430.00 1,921.50 ALTRON LOGISTICS, INC. 5% 3,300.00 165.00 APL CO. 5% 3,301,740.00 165,087.00 BAYAN TELECOMMUNICATIONS 5% 47,250.00 2,362.50 BLOOMBERRY RESORTS AND HOTEL, INC. 5% 17,688,450.65 884,422.56 BRAND AND LIFESTYLE DEVELOPMENT PARTNERS, INC. 5% 420,630.72 21,031.54 BS SQUARE COMMERCIAL, INC. 5% 124,999.98 6,250.02 CENTRAL BUSINESS PARK 1 ISLAND ASSO.,INC. 5% 105,091.50 5,163.00 EPLDT, INC. 5% 541,422.85 27,071.15 FITNESS FIRST PHILIPPINES 5% 548,550.80 27,427.54 IPLUS INTELLIGENT NETWORK 5% 3,941,633.13 197,081.68 LEGISPRO CORPORATION 5% 426,835.77 21,341.79 MAERSK FILIPINAS, INC. 5% 1,691,388.00 84,569.40 MARKETING CONVERGENCE, INC. 5% 2,114,161.80 105,708.09 MCC TRANSPORT PHILIPPINES 5% 327,560.00 16,378.00 MEGALINK, INC. 5% 2,052,636.76 102,631.83 MERCANTILE OCEAN MARITIME 5% 60,440.00 3,022.00 MM TRAVEL, INC. 5% 371,500.25 18,575.01 OSTE CREWING PHILIPPINES 5% 835,356.00 41,767.80 PERNOD RICARD PHILIPPINES 5% 383,033.64 19,151.67 PH03 MAERSK FILIPINAS CREWING 5% 1,156,254.00 57,812.70 PHILIPPINE AMUSEMENT AND GAMING CORPORATION 5% 77,611,563.41 3,880,578.14 PHILIPPINE GLOBAL COMMUNICATIONS, INC. 5% 62,737.50 3,136.91 SITC CONTAINER LINES PHIL. 5% 22,145.97 1,107.30 STREAM INTERNATIONAL GLOBAL SERVICES PHILIPPINES, INCORPORATED 5% 1,408,550.00 70,427.50 SUMMERHILLS HOME DEVELOPMENT CORPORATION 5% 933,667.50 46,683.40 SYBASE EQUITY INVESTMENTS 5% 497,768.72 24,888.40 VENDO CORPORATION 5% 638.71 31.94 WAREHOUSE DEVELOPMENT COMPANY, INC. 5% 25,971,753.50 1,298,587.67 PHILIPPINE GLOBAL COMMUNICATIONS, INC. 10% 13,250.01 1,325.02 TOTAL P189,003,870.07 P8,698,111.06 With regard to the discrepancy in recording the income payments in the books of accounts, the Court notes that when there is substantial difference between the amounts reflected in the financial statements and the amounts per certificates of withholding, there is uncertainty as to whether the income payments indeed formed part of petitioner's revenue in its return. Petitioner did not offer any explanation or reconciliation of the difference that may be brought about by timing or revenue recognition difference. ASTcaE It should be emphasized that the Court is consistent in applying the well-settled rule that "actions for tax refund or credit, as in the instant case, are in the nature of a claim for exemption and the law is not only construed in strictissimi juris against the taxpayer, but also the pieces of evidence presented entitling a taxpayer to an exemption is strictissimi scrutinized and must be duly proven. The burden is on the taxpayer to show that he has strictly complied with the conditions for the grant of the tax refund or credit." 42 In the present case, petitioner failed to discharge its burden of complying with the substantiation and reporting requirements of its claim. Hence, the Court finds that only income payments in the aggregate amount of P1,983,596,918.90 with corresponding CWT of P209,310,244.05, have been substantially reported by petitioner as revenue in its books of accounts and in its ITR for the year 2013, and the taxes withheld therefrom may be refundable, as follows: DTCSHA Registered Name Tax Rate Tax Base CWT CONSOLIDATED PRIME DEVELOPMENT 1% P49,554.00 P495.54 SANFORD MARKETING CORPORATION 1% 13,141,930.00 131,419.30 ACCESSORIES MANAGEMENT CORP. 2% 1,593,067.50 31,861.35 ACE HARDWARE PHILIPPINES 2% 4,389,316.50 87,786.33 BACOLOD CHICKEN INASAL 2% 1,121,669.00 22,433.38 CASAMIA FURNITURE CENTER, INC. 2% 869,496.00 17,389.92 CHINA BANKING CORPORATION 2% 35,419.50 708.39 CK FASHION COLLECTION 2% 158,380.00 3,167.60 DESSERTS PLUS, INC. 2% 4,129,419.50 82,588.39 DET NORSKE VERITAS AS 2% 1,061,872.50 21,237.45 GOLDEN ARCHES DEVELOPMENT CORPORATION 2% 3,650,002.50 73,000.05 HAIR GROUP SALONS, INC. 2% 340,311.50 6,806.23 MADISON SHOPPING PLAZA, INC. 2% 50,771,929.50 1,015,438.59 MAINSTREAM BUSINESS, INC. 2% 66,824,587.50 1,336,491.75 MAJOR SHOPPING MANAGEMENT 2% 51,586,181.00 1,031,723.62 MANDURRIAO STAR, INC. 2% 60,943,022.50 1,218,860.45 MANILA SOUTHERN ASSOCIATE 2% 50,112,372.50 1,002,247.45 MERCANTILE STORES GROUP I 2% 61,152,257.00 1,223,045.14 MERIDIEN BUSINESS LEADER 2% 25,932,903.50 518,658.07 METRO MAIN STAR ASIA CORP. 2% 40,280,621.00 805,612.42 MINDANAO SHOPPING DESTINATION CORP. 2% 13,158,329.50 263,166.59 PINIC INTERNATIONAL CORPORATION 2% 343,692.00 6,873.84 SONDRIK, INC. 2% 165,321.50 3,306.43 STANFIELD INTERNATIONAL CORPORATION 2% 172,440.00 3,448.80 WONDERFOODS, INC. 2% 765,138.50 15,302.77 ACCESSORIES MANAGEMENT CORP. 5% 1,611,487.80 80,574.39 ACE HARDWARE PHILIPPINES 5% 35,146,472.00 1,757,323.60 ADS SPECTACULAR, INC. 5% 398,511.20 19,925.56 BACOLOD CHICKEN INASAL/AMELIA S. TANALGO 5% 1,547,872.60 77,393.63 CASAMIA FURNITURE CENTER, INC. 5% 1,006,510.80 50,325.54 CF MGT. CORP. 5% 1,518,626.60 75,931.33 CK FASHION COLLECTION 5% 180,960.00 9,048.00 COSTA DEL HAMILO, INC. 5% 5,215,097.20 260,754.86 DET NORSKE VERITAS AS P 5% 2,322,416.40 116,120.82 FAMILY ENTERTAINMENT CENTER, INC. 5% 1,423,103.80 71,155.19 FAST RETAILING PHILIPPINES, INC. 5% 991,598.20 49,579.91 FOREVER 21 PHILIPPINES, INC. 5% 10,035,001.00 501,750.05 FOREVER AGAPE AND GLORY I 5% 928,598.40 46,429.92 GOLDEN ARCHES DEVELOPMENT CORPORATION 5% 4,385,324.80 219,266.24 HOMEWORLD SHOPPING CORPORATION 5% 51,903,389.40 2,595,169.47 HOTEL SPECIALIST PICO DE LORO, INC. 5% 11,223,112.60 561,155.63 KULTURA STORE, INC. 5% 3,087,610.20 154,380.51 LF MGT. CORP 5% 1,582,443.00 79,122.15 LTBG MGT. CORP. 5% 1,604,228.20 80,211.41 MCLG MGMT. CORP. 5% 903,683.80 45,184.19 MEDIASCAPE, INC. 5% 1,629,162.00 81,458.10 MF MGT. CORP. 5% 1,537,843.80 76,892.19 PINIC INTERNATIONAL CORPORATION 5% 953,697.60 47,684.88 PRIME SPOTS, INC. 5% 3,056,158.40 152,807.92 SIGNATURE LINES, INC. 5% 558,034.60 27,901.73 SMEDD CORP. 5% 13,916,795.80 695,839.79 SONDRIK, INC. 5% 288,324.60 14,416.23 SPORTS CENTRAL MANILA, INC. 5% 2,908,886.80 145,444.34 ST MUSIC WORLD, INC. 5% 228,619.80 11,430.99 STANFIELD INTERNATIONAL CORPORATION 5% 2,655,701.20 132,785.06 SUPERVALUE, INC. 5% 125,524,985.00 6,276,249.25 UPTREND FASHION DESIGN CORP. 5% 22,628.00 1,131.40 WANG LAI JRSB ENTERPRISES 5% 1,036,459.00 51,822.95 WONDERFOODS, INC. 5% 1,066,440.00 53,322.00 CHINA BANKING CORPORATION 15% 11,815,576.20 1,772,336.43 MADISON SHOPPING PLAZA, INC. 15% 50,771,929.13 7,615,789.37 MAINSTREAM BUSINESS, INC. 15% 66,824,587.40 10,023,688.11 MAJOR SHOPPING MANAGEMENT 15% 51,586,180.53 7,737,927.08 MANDURRIAO STAR, INC. 15% 60,943,021.80 9,141,453.27 MANILA SOUTHERN ASSOCIATE 15% 50,112,373.20 7,516,855.98 MARKET STRATEGIC FIRM, INC. 15% 57,485,778.00 8,622,866.70 MERCANTILE STORES GROUP I 15% 61,152,256.94 9,172,838.54 MERIDIEN BUSINESS LEADER 15% 25,932,903.20 3,889,935.48 METRO MAIN STAR ASIA CORP. 15% 40,280,625.87 6,042,093.88 MINDANAO SHOPPING DESTINATION CORP. 15% 13,158,329.47 1,973,749.42 SANFORD MARKETING CORPORATION 15% 126,635,827.27 18,995,374.09 SM KEPPEL LAND, INC. 15% 5,687,204.00 853,080.60 SM MART, INC. 15% 131,633,163.60 19,744,974.54 STAR APPLIANCE CENTER, INC. 15% 165,759,678.93 24,863,951.84 SUPERVALUE, INC. 15% 207,234,372.53 31,085,155.88 WATSONS PERSONAL CARE STORES 15% 111,434,091.73 16,715,113.76 TOTAL P1,983,596,918.90 P209,310,244.05 However, the foregoing includes CWTs which were merely supported by photocopies of Certificates of Taxes Withheld (BIR Form No. 2307),as found by the ICPA in his Supplemental Report: 43 cDSAEI Registered Name Tax Rate Tax Base CWT DET NORSKE VERITAS AS 2% P624,977.38 P12,499.54 DET NORSKE VERITAS AS P 5% 1,343,098.01 67,154.77 MEDIASCAPE, INC. 5% 1,629,161.76 81,458.10 ST MUSIC WORLD, INC. 5% 36,892.16 1,844.60 SM KEPPEL LAND, INC. 15% 508,346.51 76,251.98 TOTAL P4,142,473.82 P239,208.99 Thus, only the amount of P209,071,035.06 (P209,310,244.05 less P239,208.99) complied with the requisites set forth in Section 2.58.3 of Revenue Regulations No. 2-98, as amended. To recapitulate, petitioner's refundable creditable withholding tax amount to P209,071,035.06, computed as follows: CScTED Claimed CWT P1,170,533,633.46 44 Less disallowed CWT: Not properly reported in FS P943,656,142.68 Not properly reported in FS and not fully substantiated 17,567,246.73 Reported in FS but supported by photocopy 239,208.99 961,462,598.40 Refundable CWT P209,071,035.06 On the other hand, the Court notes that petitioner's income tax liability for the year 2013 was settled, as follows: Income tax due P534,208,518.30 Less: Credits/Payments Excess MCIT applied this current taxable year P122,775,252.00 Excess CWT carried over from previous taxable periods: 2007 CWT 114,592,822.07 2012 CWT 296,840,444.23 534,208,518.30 Balance P- An examination of petitioner's annual income tax return for the year 2012 45 shows that the MCIT in the amount of P122,775,251.80 was offset against the excess CWT carried over from the previous taxable period. It should be noted, however, that petitioner did not offer evidence to support its CWT for the taxable year 2007. Hence, the CWT therefrom shall not be considered. EDCcaS Considering that petitioner substantiated its 2012 CWT in the amount of P504,433,063.96, the income tax due for 2013 will be offset, thus: Income tax due for 2013 P534,208,518.30 Less: CWT from 2012 504,433,063.96 Balance to be taken from refundable 2013 CWT P29,775,454.34 ============= Refundable CWT P209,071,035.06 Less: Balance of 2013 Income Tax Due (29,775,454.34) Net Refundable CWT P179,295,580.72 ============= In sum, the Court finds that petitioner was able to prove that it is entitled to its refund claim only in the total amount of P179,295,580.72. Hence, the partial grant of the instant Petition is in order. cDCEIA WHEREFORE ,the instant Petition for Review is PARTIALLY GRANTED .Accordingly, let a tax refund or a tax credit certificate be issued in favor of petitioner in the total amount of P179,295,580.72, representing petitioner's excess and unutilized Creditable Withholding Tax for the calendar year ended December 31, 2013. SO ORDERED. (SGD.) JUANITO C. CASTAEDA, JR. Associate Justice Catherine T. Manahan, J. ,concurs. Footnotes 1. Petition for Review, Docket, Vol. I, p. 10. 2. Exhibit "P-3",Docket, Vol. II, pp. 583-593. 3. Exhibit "P-4",Docket, Vol. II, pp. 594-595. 4. Exhibit "P-5",Docket, Vol. II, pp. 596-693. 5. Exhibit "P-7",Docket, Vol. III, pp. 1169-1172. 6. Exhibit "P-10",Docket, Vol. III, p. 1291. 7. Docket, Vol. I, pp. 10-23. 8. Docket, Vol. I, pp. 131-140. 9. Joint Stipulation of Facts and Issues (JSFI),Docket, Vol. II, pp. 482-489. 10. Docket, Vol. II, pp. 492-497. 11. Exhibit "P-2278",Amended Judicial Affidavit of Ms. Helen Grace D. Dela Cruz, Docket, Vol. II, pp. 566-582; Minutes of the Hearing dated December 14, 2016, Docket, Vol. II, p. 741. 12. Exhibit "P-2280",Judicial Affidavit, Docket, Vol. II, pp. 855-864; Minutes of the Hearing dated January 30, 2017, Docket, Vol. III, p. 969; Exhibit "P-2285",Docket, Vol. III, pp. 1351-1356; Minutes of the Hearing dated May 10, 2017, Docket, Vol. III, p. 1357. 13. Exhibit "P-2282",Docket, Vol. III, pp. 1097-1109; Minutes of the Hearing dated February 22, 2017, Docket, Vol. III, p. 1306. 14. Docket, Vol. III, pp. 1381-1399. 15. Minutes of the Hearing dated April 11, 2018, Docket, Vol. IV, p. 1466. 16. Docket, Vol. IV, pp. 1468-1477. 17. Docket, Vol. IV, pp. 1488-1545. 18. Docket, Vol. IV, p. 1606. 19. Statement of the Issue, JSFI, Docket, Vol. II, p. 487. 20. Consolidated cases of CBK Power Company Limited v. Commissioner of Internal Revenue and Commissioner of Internal Revenue v. CBK Power Company Limited ,G.R. Nos. 193383-84 & 193407-08, January 14, 2015. 21. G.R. No. 172045-46, June 16, 2009, 589 SCRA 275. 22. Id. 23. Exhibits "P-3" and "P-5",Docket, Vol. II, pp. 583-592 and 596-603. 24. Item 20, Exhibit "P-5",Docket, Vol. II, p. 596. 25. Exhibit "P-5-b",Docket, Vol. II, p. 596. 26. See also Exhibit "P-2279",Docket, Vol. II, p. 751. 27. Item 1, Schedule 7, Exhibit "P-6",Docket, Vol. II, p. 635. 28. Section 2.58.3, Revenue Regulations No. 2-98, as amended. 29. Exhibit "P-2279",Docket, Vol. II, p. 751. 30. Id. ,pp. 752 & 754. 31. Items 33F and 33H, Exhibit "P-17",Docket, Vol. II, pp. 674 & 682. 32. Exhibit "P-2279",Docket, Vol. II, pp. 753-754. 33. Id. ,p. 756. 34. Exhibit "P-2283",Docket, Vol. III, pp. 1314-1315. 35. Resolution dated September 13, 2017, Docket, Vol. IV, pp. 1432-1435. 36. Exhibit "P-2279",Docket, Vol. II, pp. 755-756. 37. Should be P1,780,695,061.00, Exhibits "P-3" and "P-5",Docket, Vol. II, pp. 585 & 597. 38. Exhibit "P-2279",Docket, Vol. II, pp. 831-849. 39. Id. 40. Exhibit "P-2279",Annex I, Docket, Vol. II, pp. 848-849. 41. Exhibit "P-2283",Annex A, Docket, Vol. III, pp. 1316-1322. 42. Coca-cola Bottlers Philippines, Inc. v. Commissioner of Internal Revenue ,G.R. No. 222428, February 19, 2018. 43. Exhibit "P-2283",Annex A, Docket, Vol. III, pp. 1317-1322. 44. Total CWT per SAWT for 2013 is P1,170,533,633.46, Annex I of ICPA Report, Docket Vol. II, p. 849. 45. Exhibit "P-17",Docket, Vol. II, pp. 672-680 and 681-686.