ChanRobles Virtual law Library
[G.R. No. 125056.February 6, 2002]
MARUBENI CORP. vs. CA, et al.
FIRST DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated 06 FEB 2002.
G.R. No. 125056(Marubeni Corporation vs. Court of Appeals, Court of Tax Appeals and Commissioner of Internal Revenue.)
G.R. No. 125077(Commissioner of Internal Revenue vs. Marubeni Corporation. )
These cases are the separate appeal by the parties from the decision [1] cralaw of the Court of Appeals decreeing as follows:
"IN VIEW OF THE FORE-GOING, the decisions of the Court of Tax Appeals:
1)in CTA Case No. 4110 subject of CA-G. R. SP No. 31047 is hereby REVERSED AND SET ASIDE.
2)in CTA Case No. 4598 subject of CA-G. R. SP No. 37508 is hereby AFFIRMED.
SO ORDERED." [2] cralaw
The facts, as found by the Court of Appeals, are as follows:
"Petitioner [3] cralaw is the Manila Branch of Marubeni Corporation, a corporation organized and existing under the laws of Japan and engaged in the general trading (import-export business. As branch, petitioner's activities consists of rendering liaising services to its head office (Marubeni Japan) for sales which are directly made and concluded between the latter and Philippine customers. For said activities, petitioner receives from Marubeni Japan a regular subsidy intended to sustain petitioner's operating and other fiscal requirements and costs in the Philippines.
"The controversy subject of the instant petitions arose when respondent Commissioner of Internal Revenue issued against herein petitioner assessments for deficiency in commercial broker's tax on two separate dates- One on August 15, 1986 for the fiscal year ended March 31, 1985 amounting to P3,601,535.68 (subject of CTA Case No. 4110 and now CA-G. R. Sp No. 31047) and another on July 11, 1990 for the first semester of the fiscal year ended March 31, 1988 amounting to P2,134,871.23 (subject of CTA Case No. 4598 and now CA-G. R. SP No. 37508).
"The assessment contained in the letter dated August 15, 1986 served as the final decision of the Commissioner of Internal Revenue. Not agreeable to the decision of respondent Commissioner of Internal Revenue, petitioner filed a petition to the Court of Tax Appeals on September 26, 1986 which case was docketed as CTA Case No. 4110. In its petition, petitioner questions the finding of respondent Commissioner of Internal Revenue that it is a commercial broker and raised the following arguments in support of its main contention:
1.) Marubeni Manila and Marubeni Japan are one and the same entity and that therefore, Marubeni Manila cannot be considered as a broker when it solicits orders from its head office.
2.) Marubeni Manila acts as the liaison of its head office, Marubeni Japan, when the latter makes direct sales to Philippine customers. In its liasoning works, it receives subsidy from its head office which are in turn reported as income.
"Subsequently, petitioner filed its supplemental petition on May 4, 1987 raising the issue of extinguishments of its tax liabilities based on its availment of the tax amnesty under E.O. 41 and E.O. 64.
"In the meanwhile, or on July 11, 1990 respondent Commissioner of Internal Revenue issued against petitioner an assessment notice for alleged deficiency broker's tax for the first semester of the fiscal year ending March 31, 1988 in the amount of P2,134,871.23. Petitioner protested the said assessment on July 22, 1990 raising substantially the same arguments it raised in CTA Case No. 4 110. In a letter dated December 3, 1990 respondent Commissioner of Internal Revenue denied with finality petitioner's protest.
"Petitioner then appealed to the Court of Tax Appeals via a petition for review which case was docketed as CTA Case No. 4598 raising the sole issue of whether or not it is a commercial broker. While CTA Case No. 4598 pends, the Court of Tax Appeals rendered a decision dated March 1, 1993 in CTA Case No. 4110 favorable to herein respondent.
"In finding for respondent Commissioner of Internal Revenue, the Court of Tax Appeals held that Marubeni Corporation is a commercial broker and considered the percentage on sales price Marubeni Corporation received from its head office is not a subsidy but commissions. The CTA also ruled that Marubeni is disqualified from availing of the tax amnesty under E.O. 41 and E.O. 64 because it comes within the purview of the excepted taxpayers which cannot avail of the tax amnesty.
"Not satisfied with the foregoing finding of the Court of Tax Appeals, petitioner Marubeni filed a petition for review on certiorari on May 31, 1993 with this Court which is docketed as CA-G.R. SP No. 31047.
"In the meantime that the resolution of the said petition is still pending, the Court of Tax Appeals, relying upon its findings in CTA Case No. 4110, rendered a decision in CTA Case No. 4598 dated April 10, 1995 affirming the assessment made by respondent Commissioner of Internal Revenue against petitioner for deficiency in commercial broker's tax. Consequently, petitioner filed a petition for review on certiorari to this Court which is docketed as CA-G. R. SP No. 37508.
"Because the two petitions involved principally the same issues, they were consolidated pursuant to Sec. 7 (a), Rule 3 of the Revised Internal Rules of the Court of Appeals." [4] cralaw
On May 22, 1996, the Court of Appeals promulgated a decision, the dispositive portion of which is quoted in the opening paragraph of this decision.
Hence, this appeal. [5] cralaw
The issues raised are (1) whether petitioner comes within the exemptions under Executive Order No. 41, and Executive Order No. 64 and (2) whether petitioner may be considered a commercial broker, and, therefore, subject to the seven (7%) percent commercial broker's tax.
We affirm the ruling of the Court of Appeals.
On the issue of whether petitioner Marubeni may avail itself of tax amnesty under Executive Order No. 41 as amended by Executive Order No. 64, we resolved this issue in a related case. [6] cralaw We held that Marubeni validly availed itself of tax amnesty under Executive Order No. 41, as amended by Executive Order No. 64, covering deficiency income, contractors and commercial brokers taxes as of 1985.
On the issue of whether petitioner Marubeni Corporation may be considered a commercial broker subject to the seven (7%) percent commercial broker's tax, we find the appeal to be resolved by the same decision above cited [7] cralaw as the distinction is only in the years covered.
Hence, Marubeni Corporation is liable for the seven (7%) percent commercial broker's tax under Section 174 of the Tax Code, as amended.
IN VIEW WHEREOF, we DENY the petitions and AFFIRM the decision of the Court of Appeals. [8] cralaw
No costs.
Very truly yours,
(Sgd.) VIRGINIA ANCHETA-SORIANO
Clerk of Court
Endnotes:
[1] cralaw In CA-G.R. Nos. 37508 and 31047, promulgated on May 22, 1996.Abad Santos, Jr., J., ponente, Vidallon-Magtolis and Tuquero, JJ., concurring, Rollo, pp. 33-38.
[2] cralaw Rollo, p. 38.
[3] cralaw We shall refer to Marubeni Corporation as petitioner throughout the decision, even though it is petitioner in G. R. No. 125056, and the respondent in G. R. No. 125077.
[4] cralaw Rollo, p. 38.
[5] cralaw Petition filed on July 12, 1996, Rollo, pp. 11-30.On August 2, 1999, we gave due course to the petition (Rollo, pp. 192-193).
[6] cralaw Commissioner of Internal Revenue v. Marubeni Corporation, G. R. No. 137377, December 18, 2001.
[7] cralaw Supra, Note 6.
[8] cralaw In CA-G. R. SP Nos. 37508 and 31047.
HERE FOR THE LATEST SUPREME COURT JURISPRUDENCE
PHILIPPINE SUPREME COURT DECISIONS
QUICK SEARCH
