Thursday, January 07, 2016

First Lepanto Taisho Insurance Corporation vs. CIR [GR No. 197117, April 10, 2013]

FACTS: After submitting its corporate income tax return for taxable year ending December 31, 1997, petitioner received a Letter of Authority, dated October 30, 1998, from respondent Commissioner of Internal Revenue (CIR) to allow it to examine their books of account and other accounting records for 1997 and other unverified prior years.

On 29 December 1999, CIR issued internal revenue tax assessments for deficiency income, withholding, expanded withholding, final withholding, value-added and documentary stamp taxes for taxable year 1997. On 24 February 2000, petitioner protested the said tax assessments.

ISSUE: Whether a stipulation between contending parties as to correct withholding of taxes is sufficient evidence for deductibility of expense

RULING: As to service/contractors and purchases, petitioner contends that both parties already stipulated that it correctly withheld the taxes due. Thus, petitioner is of the belief that it is no longer required to present evidence to prove the correct payment of taxes withheld. As correctly ruled by the CTA Second Division and En Banc, however, stipulations cannot defeat the right of the State to collect correct taxes due on an individual or juridical person because taxes are the lifeblood of our nation so its collection should be actively pursued without unnecessary impediment.

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