Case Digest (G.R. No. 137377) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Commissioner of Internal Revenue v. Marubeni Corporation (G.R. No. 137377, December 18, 2001), the Commissioner of Internal Revenue (petitioner) sought review of the Court of Appeals’ January 15, 1999 decision affirming the July 29, 1996 ruling of the Court of Tax Appeals in CTA Case No. 4109. The respondent, Marubeni Corporation, a Japanese foreign corporation with a Manila branch, was engaged in import-export trading, financing and construction. During the fiscal year ending March 31, 1985, BIR examiners discovered undeclared income from two 1984 “turn-key” contracts: the Leyte Industrial Development Estate Wharf/Port Complex for the National Development Company (NDC) and an ammonia storage complex for the Philippine Phosphate Fertilizer Corporation (Philphos). On August 15, 1986, the Commissioner assessed deficiency income, branch profit remittance, contractor’s and commercial broker’s taxes for 1985, amounting to over ₱462 million, inclusive of surcharges and interest. Ma Case Digest (G.R. No. 137377) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Nature of Action
- Commissioner of Internal Revenue (“Petitioner”) assessed Marubeni Corporation (“Respondent”), a Japanese corporation with a Manila branch, for FY ending March 31, 1985 deficiency Income Tax, Branch Profit Remittance Tax, Contractor’s Tax and Commercial Broker’s Tax based on undeclared income from two 1984 “turn-key” construction contracts with the National Development Company (NDC) and Philippine Phosphate Fertilizer Corporation (Philphos).
- Respondent questioned the assessments before the Court of Tax Appeals (CTA), Case Nos. 4109 (Income, Branch Profit Remittance, Contractor’s Taxes) and 4110 (Commercial Broker’s Tax).
- Assessment Details and Administrative Remedies
- BIR examiners’ March 1, 1986 recommendation led to an August 15, 1986 assessment letter totaling over P460 million (inclusive of surcharges and interest).
- Respondent filed its CTA petitions on September 26, 1986. Meanwhile, Executive Order (E.O.) No. 41 (August 2, 1986) and its amendments under E.O. No. 64 (November 17, 1986) granted one-time amnesty on various taxes for 1981–1985, subject to conditions and exceptions.
- Availment of Tax Amnesty
- October 30, 1986: Respondent filed amnesty return under E.O. No. 41 and paid 10% of net worth increase.
- December 15, 1986: Respondent filed supplemental return under E.O. No. 64 and paid an additional 5%.
- Judicial Proceedings and Prior Rulings
- July 29, 1996: CTA rendered decision ordering Petitioner to desist from collecting the challenged deficiency taxes, finding Respondent had properly availed of amnesty under E.O. Nos. 41 and 64.
- January 15, 1999: The Court of Appeals affirmed the CTA decision. Petitioner filed a petition for review before the Supreme Court.
Issues:
- Tax Amnesty Qualification
- Did Respondent fall under the exception in Section 4(b) of E.O. No. 41 (cases filed in court as of its effectivity) when it filed for amnesty?
- Does Section 4(b) exception apply to the Contractor’s Tax amnesty under E.O. No. 64, given its effectivity date?
- Liability for Assessed Taxes
- Are the deficiency Income Tax and Branch Profit Remittance Tax extinguished by Respondent’s valid amnesty?
- Is Respondent liable for Contractor’s Tax on gross receipts from the offshore portion of the NDC and Philphos “turn-key” contracts?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)