Hitachi Computer Products (Asia) Corp. v. Commissioner of Internal Revenue

SPECIAL TWELFTH DIVISION [CA-G.R. SP. No. 49162. July 10, 2000.] HITACHI COMPUTER PRODUCTS (ASIA) CORPORATION , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N LABITORIA , J p : This is an appeal from the decision dated June 26, 1998 of the Court of Tax Appeals in CTA Case No. 5472, entitled "Hitachi Computer Products (Asia) Corporation vs. Commissioner of Internal Revenue." Facts of the case: Petitioner Hitachi Computer Products (Asia) Corporation is a registered VAT taxpayer with VAT Certificate of Registration No. 94-570-000298 and was likewise registered with the Export Processing Zone Authority as per Certificate of Registration No. 94-28. On April 20, 1995, petitioner filed its quarterly VAT return for the period of January to March 1995, showing a total net creditable input tax of P4,471,265.55 from its domestic purchases of services. On February 20, 1997, petitioner filed an application for tax credit/refund of the aforestated net value added tax payments with the Tax and Revenue Group of the One-Stop Shop Inter Agency Tax Credit and Duty Drawback Center of the Department of Finance. As the application for tax credit/refund has not been acted upon, petitioner elevated the case before the Court of Tax Appeals by way of Petition for Review. On November 13, 1997, petitioner asked fifteen (15) days within which to file its formal offer of evidence, but the period expired without petitioner having filed the said formal offer of evidence. Thus, the petition was denied for lack of merit. 1 A motion for reconsideration was filed but was denied in an order dated September 14, 1998. 2 Hence, this petition raising a sole issue, thus: 3 "WHETHER OR NOT THE RESPONDENT COURT OF TAX APPEALS ERRED IN NOT CONSIDERING THE RECORDS OF THE CASE AND THE ORAL EVIDENCE OF PETITIONER WHICH HAVE BEEN FORMALLY OFFERED DURING THE TESTIMONY OF ITS WITNESSES AND APPEDED (sic) TO THE RECORDS OF THE CASE, IN ITS RESOLUTION OF THE CLAIM FOR REFUND OF PETITIONER." The petition is bereft of merit. In general, there is no disagreement that a claimant has the burden of proof to establish the factual basis of his or her claim for tax credit or refund. Tax refunds, like tax exemptions, are construed strictly against the taxpayer. 4 In the case at bench, petitioner had just presented a witness in the person of Ms. Fe Francisco but no documentary evidence was formally offered, for failure of petitioner to make a formal offer of evidence within the period asked for. In this regard, worth mentioning is the rule that courts will only consider as evidence that which has been formally offered. 5 Evidence not formally offered before the trial court cannot be considered on appeal, for to consider them at this stage will deny the other parties their right to rebut them. 6 Moreso, it has been settled that mere allegations are not equivalent to proof. 7 Mere allegation is not evidence. 8 Basic and well-established is the rule that the party alleging has the burden of substantiating his allegation by preponderance of evidence and any allegation or assertion not so substantiated is, at best, a self-serving statement or declaration which is inadmissible in evidence for being hearsay. 9 Thus, petitioner's contention that the Court of Tax Appeals erred in not considering the testimony of its witness is without merit, for other than the said testimony it offered no evidence to substantiate the same. Finally, it has been ruled that the Supreme Court will not set aside the conclusion reached by the Court of Tax Appeals which is, by the very nature of its function, dedicated exclusively to the study and consideration of tax problems and has necessarily developed an expertise on the subject unless there has been abuse or improvident exercise of authority. 10 Factual findings of the Court of Tax Appeals, when supported by substantial evidence, will not be disturbed on appeal unless it is shown that the court committed gross error in the appreciation of facts. 11 In the case at bench, We find no reason to depart from this ruling. WHEREFORE, the instant petition is hereby DENIED, for lack of merit. SO ORDERED. Abesamis and * Asuncion, JJ ., concur. Footnotes * Vice Justice Agnir who is on leave. 1. Rollo, pp. 20-23, Decision, pp. 1-4. 2. Rollo, p. 24, Annex B. 3. Rollo, p. 14, Petition, p. 4. 4. Citibank, N.A. vs. Court of Appeals, 280 SCRA 459, 471. 5. Candido vs. Court of Appeals, 253 SCRA 78. 6. Servicewide Specialist, Inc. vs. Court of Appeals, 257 SCRA 643. 7. Philippine National Bank vs. Court of Appeals, 266 SCRA 136. 8. Martinez vs. National Labor Relations Commission, 272 SCRA 793. 9. Victory Liner, Inc. vs. Court of Appeals, 293 SCRA 378. 10. Commissioner of Internal Revenue vs. Court of Appeals, 271 SCRA 605. 11. Commissioner of Internal Revenue vs. Court of Appeals, 298 SCRA 83.