31\epublic of tbe ~bilippines

~upreme QC:ourt
Jlf[anila
FIRST DIVISION

COMMISSIONER OF G.R. No. 227121

INTERNAL REVENUE,
Petitioner, Present:

PERALTA, CJ, Chairperson,

- versus - CAGUIOA,
CARANDANG,
ZALAMEDA, and
THE HONGKONG SHANGHAI GAERLAN,JJ
BANKING CORPORATION
LIMITED PHILIPPINE Promulgated:
BRANCH,
Respondent. DEC O9 2020
X - - - - - - - - - - - - - -.- - - - - - - - - - - - - - - - - - - - - - ..: - - - - - - - - - - - - - -X

DECISION

CAGUIOA, J.:

Before the Court is a Petition for Review on Certiorari 1 under Rule 45

of the Rules of Court filed by petitioner Commissioner of Internal Revenue
(CIR), assailing the Decision2 dated May 17, 2016 and Resolution3 dated
September 9, 2016 of the Court of Tax Appeals en bane (CTA EB) in CTA
.EB Case No. 1257, which affirmed the CTA Third Division's (CTA Division)
Decision4 dated October 13, 2014 and Resolution5 dated December 10, 2014
in CTA Case No. 8428. The CTA Division granted respondent Hongkong
Shanghai Banking Corporation Limited-Philippine Branch's (respondent)
petition for review and cancelled the Final Decision on Disputed Assessment
(FDDA) dated January 18, 2012 and Final Assessment Notice (FAN) dated
June 28, 2011. 6

Rollo, pp. I 0-4 7

2 Id. at 53-71. Penned by Associate Justice Cielito N. Mindaro-Grulla with Presiding Justice Roman G.
Del Rosario and Associate Justices Juanito C. Castaneda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar
A. Casanova, Esperanza R. Pabon-Victorino, Amelia R. Cotangco-Manalastas and Ma. Belen Ringpis-
Liban, concurring.
Id. at 73-78. Penned by Associate Justice Cielito N. Mindaro-Grulla with Presiding Justice Roman G.
Del Rosario and Associate Justices Juanito C. Castaneda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar
A. Casanova, Amelia R. Cotangco-Manalastas and Ma. Belen M. Ringpis Liban, concurring while
Associate Justice Esperanza R. Pabon-Victorino, on official business.
4 Id. at 80-97. Penned by Associate Justice Lovell R. Bautista with Associate Justices Esperanza R. Fabon-
Victorino and Ma. Belen M. Ringpis-Liban, concurring.
5
Id.at 108-110.
6 Id. at 96.
Decision 2 G.R. No. 227121

Facts

The facts as summarized by the CTA Division are as follows:

[Respondent], The Hongkong and Shanghai Banking Corporation

Limited - Philippine Branch, is a duly licensed branch of The Hongkong
and Shanghai Banking Corporation Limited [(HSBC)] xx x.

xxxx

Prior to July 2008, HSBC carried on in the Asia Pacific Region,

including the Philippines, among other businesses, a Merchant Acquiring
Business [(MAB)], whereby it entered into Merchant Agreements with
accredited merchants to honor credit cards it issued under various card
associations for which it is a member.

HSBC, through [respondent], then created Global Payments Asia

Pacific-Phils., Inc. [GPAP-Phils. Inc.)] to transfer its [MAB] in the
Philippines.

On July 22, 2008, GPAP-Phils[.J was incorporated, wherein shares

of stocks were issued to [respondent] in exchange for the fair-market value
of the Point-of-Sale ("POS") Terminals, Merchant Agreements, and transfer
of the (MAB] of HSBC.

On July 24, 2008, a Share Sale and Purchase Agreement was

executed between HSBC and Global Payment Asia Pacific (Singapore
Holdings) Private Limited [(GPAP-Singapore)] for the transfer of said
shares.

On September 3, 2008, a Deed of Assignment between [HSBC] and

GPAP-Singapore was executed, wherein the former assigned its GPAP-
Phils[.] shares to the latter.

On September 5, 2008, the Documentary Stamp Tax in the amount

of '!'52,365.75, based on the par value of the shares, was paid.

On September 22, 2008, [respondent] filed an Application and Joint

Certification with [petitionerJ to secure a ruling on the tax-free exchange
under Section 40(C)(2) of the 1997 National Internal Revenue Code
[(NlRC)], as amended, regarding the transfer of the POS Terminals and
[MAB].

On September 28, 2008, the Capital Gains Tax [(CGT)] in the

amount of 1"89,929,292.10 was paid, in relation to the above said Deed of
Assignment dated September 3, 2008.

On January 23, 2009, a Certification/Ruling No. SN:018-2009 was

issued by Assistant Commissioner of Legal Service, certifying that the
transfer of POS Terminals and [MAB] with Substituted Basis, in exchange
for the GPAP-Phils[.J shares are not subject to tax pursuant to Section
40(C)(2) of the 1997 NIRC, as amended.
Decision 3 G.R. No. 227121

On September 8, 2010, however, [petitioner] issued a Notice of

Informal Conference addressed to [respondent], the same was received by
the latter on September 17, 2010.

On January 7, 2011, [petitioner] issued a Preliminary Assessment

Notice ("PAN") against [respondent] for deficiency Income Tax in the
amount ofl":296,936, 948.59, inclusive of interest, from its gain on the sale
of the [MAB]; the same was received on January 18, 2011.

On February 2, 2011, [respondent] filed its Protest of even date to

the said PAN. [It also filed a Supplemental Position Paper on March 10,
201 I.]

On March 14, 2011, [petitioner] issued a Letter, granting

[respondent's] request to refer the matter to the Legal and Inspection Group
for resolution; the same was received on March 30, 2011.

On March 15, 2011, [respondent] then executed and duly filed a

Waiver of the Statute of Limitations; the same was duly received and
acknowledged by [petitioner].

On June 28, 2011, [petitioner], thus, issued a [FAN] against

[respondent] for deficiency Income Tax in the amount of 1"318,781,625.17,
inclusive of interest, on the sale of "Goodwill," pursuant to Section 27(A)
of the 1997 NIRC, as amended; the same was received by [respondent] on
July 11,2011.xxx

xxxx

On July 26, 2011, [respondent] filed its Administrative Protest,

which was received by [petitioner] on even date.

On January 18, 2012, [petitioner] issued a Final Decision on

Disputed Assessment, which was received by [respondent] on January 24,
2012.

On February 16, 2012, [respondent], thus, filed the present Petition

for Review [with the CTA Division].

[In its Answer, the CIR claimed that the Deed of Assignment did not
pertain to a sale of shares but to a sale or transfer of business or "Goodwill,"
which is subject to ordinary income tax and not CGT]. 7

CTA Division Ruling

In its Decision dated October 13, 2014, the CTA Division granted
respondent's petition and cancelled the FDDA and FAN.

Id. at 81-90.
Decision 4 G.R. No. 227121

The CTA Division found that, contrary to the CIR's assertion, the
evidence bears that the transaction in question is a sale or transfer of capital
asset, and not a sale of an ordinary asset, to wit:

xx x based on the records of the case-the creation ofGPAP-Phils[.]

to transfer the Merchant Acquiring Business of HSBC by way of additional
paid-in capital; the subscription of 139,640 shares of stocks of GPAP-Phils
in exchange for HSBC's POS terminals; the subscription of I common
share ofGPAP-Phils[.] in exchange for HSBC's Merchant Agreements; and
the subsequent assignment of the total number of shares of 139,641,
subscribed by HSBC to GP AP-Singapore, clearly shows that it is a sale of
capital asset, as earlier quoted under Section 39(A)(l) of the 1997 NIRC, as
amended, to which [respondent] paid the total amount ofl"89,929,292.I0. 8

The CTA Division further ruled that "Goodwill" is connected to the

business itself and cannot be allocated without regard to the business. Thus,
the CIR cannot treat separately the alleged sale of "Goodwill" from the
transfer of HSBC's MAB to GPAP Phils. and conveniently allocate and
reclassify the same as a sale of ordinary asset subject to income tax. 9

In its Resolution dated December 10, 2014, the CTA Division denied
CIR's motion for reconsideration.

CTA EB Ruling

In the assailed Decision, the CTA EB affirmed the findings of the CTA
Division.

The CTA EB reiterated that "Goodwill" is an intangible asset, cannot

exist independently of the business, nor can it be sold, purchased or transferred
separately without carrying out the same transactions for the business as a
whole. Thus, while HSBC and GP AP-Singapore agreed to recognize and
value the goodwill of the MAB in the Share Sale and Purchase Agreement,
the same cannot be sold or purchased independently of the MAB. 10

Further, the CTA EB agreed with the CTA Division that the sale of
HSBC's GPAP-Phils. Inc. shares to GPAP-Singapore at a premium, whereby
the goodwill of the MAB was recognized and valued, involves a sale of capital
asset subject to CGT and not Income Tax. 11

The CIR sought reconsideration but the same was denied m a

Resolution dated September 9, 2016.

8
Id. at 95.
9
Id. at 96.
w Id. at 65-66.
11
Id. at 67-70.
Decision 5 G.R. No. 227121

Hence, this petition.

Issue

Whether the CTA EB erred in cancelling the deficiency income tax

assessment against respondent on the alleged sale of "Goodwill" of its MAB
for taxable year 2008.

The Court's Ruling

The Petition lacks merit.

In its intention to restructure its MAB in the Asia-Pacific Region in

order to achieve efficiency, HSBC, through respondent, entered into two
transactions: (1) the transfer of its Point of Sales Terminals, other information
technology assets and Merchant Agreements of its MAB in the Philippines, in
exchange for GP AP-Phils. Inc. shares and (2) the subsequent sale or
assigmnent of its GPAP-Phils. Inc. shares to GPAP-Singapore.

It is beyond dispute that the first transaction qualifies as a tax-free

exchange under Section 40, paragraphs (C)(2) 12 and (6)(c) 13 of the 1997
N1RC, as amended. Pursuant to this provision, no gain or loss shall be
recognized both to the transferor and transferee corporation on the transfer or
exchange of property provided the following requirements are present: (1) the
transferee is a corporation; (2) the transferee exchanges its shares of stock for
property/ies of the transferor; (3) the transfer is made by a person, acting alone
or together with others, not exceeding four persons; and, (4) as a result of the
exchange the transferor, alone or together with others, not exceeding four,
gains control of the transferee. 14

All the foregoing requirements are present in this case.

HSBC, through respondent, transferred the assets of its MAB in the

Philippines to GPAP-Phils. Inc. as payment for the subscription of the
139,641 common shares of GPAP-Phils. Inc. As a result of such transfer,
HSBC became the majority stockholder of GP AP-Phils. Inc. and gained
99.99% control of the transferee corporation. Thus, both HSBC and GPAP-
Phils. Inc. shall not recognize any gain or loss on the transfer of the MAB in

12
(C) Exchange of Property. -
xxxx
No gain or loss shall also be recognized if property is transfened to a corporation by a person in exchange
for stock or unit of participation in such a corporation of which as a result of such exchange said person,
alone or together with others, not exceeding four ( 4) persons, gains control of said corporation: Provided,
That stocks issued for services shall not be considered as issued in return for property.
13
(c) The term "contror, when used in this Section, shall mean ownership of stocks in a corporation
possessing at least fifty-one percent (51 %) of the total voting power of all classes of stocks entitled to
vote.
14
Commissioner qf Internal Revenue v. Fi/invest Development Corporation, G.R. No. 163653 & 167689,
July 19.2011. 654 SCRA 56. 76.
Decision 6 G.R. No. 227121

exchange for shares. Consequently, respondent will not be liable for capital
gains tax, income tax or creditable withholding tax arising from such
exchange of properties. Notably, in its Certification 15 dated January 23, 2008,
the CIR recognized that the first transaction between HSBC and GPAP-Phils.
Inc. is not subject to income tax, capital gains tax, expanded withholding tax
and gross receipts tax. 16

It should be emphasized, however, that when the property or shares of

stock acquired through a tax-free exchange is subsequently sold, the said
subsequent sale shall now be subject to income tax. 17 This is because, in a tax-
free exchange, the recognition of gain or loss arising from the exchange is
merely deferred. 18 Thus, the second transaction, wherein HSBC subsequently
assigned its GP AP Phils. Inc. shares to GP AP Singapore, is now subject to
capital gains tax, 19 to which respondent paid the total amount of
'!"89,929,292.10. 20

The CIR, however, insists the second transaction involves an alleged

sale of the "goodwill" of the MAB, which makes HSBC liable for deficiency
income taxes. 21 The CIR anchors its finding on the value of the "goodwill"
indicated in the Share Sale and Purchase Agreement in the amount of
'!"885,378,821.00. 22 Thus, in the FAN dated June 28, 2011, the CIR subjected
to the regular corporate income tax of 35% as provided under Section 27(A)
of the 1997 NIRC, as amended, the gain derived by HSBC on the sale of its
GPAP-Phils. Inc. shares, viz.:

INCOME TAX
Actual Selling Price 899,342,921.00
Less GP APPi Shares of Stocks 13,964,100.00
Gross i'..mount P 885,378,821.00
Income Tax Rate 35%
Income Tax Due 309,882,587.35
Advance Payment 9-29-08 89,929,292.10
Basic Income Tax Deficiency 219,953,295.25
Interest (April 16, 2009 to July 98,828,329.92
15, 2011)
Income Tax Payable P 318,781,625.1723

15
Rollo, pp. 437-439.
16
Id. at 437.
17
Hector S. De Leon and Hector M. De Leon, Jr., THE NATIONAL INTERNAL REVENUE CODE ANNOTATED,
I I th ed. Vol. I (2015), p. 542.
18 Eurrocina M. Sacdalan-Casasola, NATIONAL INTERNAL REVENUE CODE ANNOTATED, Vol. 2 (2013), p.
454.
19
See Revenue Regulations No. 6-2008, April 22, 2008, Sec. 7.
20
Rollo, p. 95 and pp. 443-444.
21
Id. at 40.
22 Id. at 27,440.
23
Id. at 362.
Decision 7 G.R. No. 227121

This is error. The Court agrees with the findings of the CTA that the
assessment has no legal and factual bases because the subject transaction is
covered by capital gains tax and not regular corporate income tax.

The records clearly show that the object of the transaction between
HSBC and GPAP-Singapore is the 139,641 GPAP-Phils shares. The Share
Sale and Purchase Agreement between HSBC and GP AP-Singapore states
that:

(E) The Seller has agreed to sell the Philippine Subsidiary Shares to the
Purchaser, and the Purchaser has agreed to purchase the Philippine
Subsidiary Shares in reliance (inter alia) upon the Seller's
representations, warranties, indemnities, covenants and
undertakings in this Agreement, for the Consideration and otherwise
upon and subject to the tenns and conditions of this Agreement.

xxxx

ARTICLE2

SALE AND PURCHASE

2.1 Sale and Purchase.

On the terms and subject to the conditions set forth in this

Agreement, at Completion the Seller shall sell, and the Purchaser
shall purchase, all outstanding shares of the Philippine Subsidiary
free of all Encumbrances and together with all the rights now
attaching thereto. 24

Further, the Deed of Assignment provides:

"3. I. Consideration
In consideration for the sale of the Philippine Subsidiary Shares, the
consummation of the Restructuring as provided in Schedule 3. Ha) and the
entering into by the Bank of the Operative Documents to which the Bank is
or will be a party, and upon and subject to the terms and conditions set forth
in this Agreement and in reliance on the representations, warranties,
indenmities, covenants and agreements of the Seller contained herein and
therein, at and subject to Completion, the purchaser shall pay the Seller in
the aggregate the sum of the U.S. Dollar equivalent of EIGHT HUNDRED
NINETY NINE MILLION THREE HUNDRED FORTY TWO
THOUSAND NINE HUNDRED TWENTY ONE PHILIPPINE PESOS
(Php899,342,921.00) at the most recent prevailing exchange rate at
completion. The exchange rate shall be the AM WT A VE found in Reuters
page PDSPESO. 25

Section 27(A) of the NIRC of 1997, as amended, provides that except

as otherwise provided in this Code, an income tax shall be imposed on the
taxable income derived by domestic corporations. Relevantly, paragraph
24
Id. at 440-442.
25
Id. at 381.
Decision 8 G.R. No. 227121

(D)(2) thereof states that a final tax at the rates of 5% or 10% shall be imposed
on the net capital gains realized during the taxable year from the sale,
exchange or other disposition of shares of stock in a domestic corporation not
traded in the stock exchange. Revenue Regulation 6-2008, 26 which
implements the aforesaid provision, echoes Section 27(D)(2) and provides for
rules on the determination of gain or loss for the purpose of the imposition of
CGT. In other words, the amount of the gain realized from the sale of shares
of stock not traded through the local stock exchange, is in lieu of the regular
corporate income tax. Moreover, in Commissioner of Internal Revenue v.
Ocier, 27 this Court clarified that the CGT for the sale of shares of stocks not
listed in the stock exchange refers to the final tax based on the net capital gains
realized during the taxable year. Hence, a taxpayer is liable to pay CGT for
the sale, barter, exchange or other disposition of shares of stock in a domestic
corporation except if the sale or disposition is through the stock exchange.

Notably, in several rulings issued by the Bureau of Internal Revenue, it

was recognized that the gain realized from the sale of shares acquired through
a tax-free exchange transaction is subject to CGT. 28 Therefore, the subsequent
disposition ofHSBC's GPAP-Phils. Inc. shares in favor of GPAP-Singapore
is subject to CGT and not to regular corporate income tax under Section
27(A), upon which the CIR's assessment is based.

Further, the Share Sale and Purchase Agreement is explicit that the
goodwill of the MAB was transfen-ed by way of additional paid-in capital to
GPAP-Phils. Inc. 29 Clearly, as the CTA Division aptly ruled, nothing in the
Share Sale and Purchase Agreement supports the CIR's position that goodwill
of the MAB was sold to GPAP-Singapore. 30

Black's Law Dictionary defines goodwill as business' reputation,

patronage and other intangible asset considered in appraising a business,
especially for purchase. 31 It is the ability of the business to generate income
in excess of a normal rate on assets due to superior managerial skills, market
position, new product technology, etc. In the purchase of business, goodwill
represents the difference between the purchase price and the value of assets. 32

Goodwill has also been refen-ed to as "the advantage or benefit which

is acquired by an establishment beyond the mere value of the capital stock,
funds or property employed therein, in consequence of the general public
patronage and encouragement which it receives from constant or habitual
customers on account of its local position, or common celebrity, or reputation

26
CONSOLIDATED REGULA TlONS PRESCRIBING THE RULES ON THE T AXAT!ON OF SALE, BARTER.
EXCHANGE OR OTHER DISPOSITION OF SHARES OF STOCK HELD AS CAP IT AL ASSETS, April 22. 2008.
27
G.R. No. 192023, November 21, 2018, 886 SCRA 235.
28
See rollo, pp. 408-426.
29
Id. at 440
30
Id. at 96.
31
BLACK'S LAW DICTIONARY (9TH ed.), p. 763.
32 Randall B. Wilhite, The Effect of Goodwill in Determining the Value ofa Business in a Divorce. Family
Law Quarterly, Volume 35, No. 2, p. 353 (2001), accessed at <http://www.jstor.org/stable/25740341>.
 Decision 9 G.R. No. 227121

for skill, or affluence, or punctuality, or from other accidental circumstances

or necessities, or even from ancient partialities or prejudices. " 33 It is derived
from the assets associated with the business, 34 inseparable from the business
to which it adds value, and exists where the business is carried on. 35 It has also
been said that goodwill "has no meaning except in connection with some
trade, business or calling;" 36 hence, "cannot exist or be transferred apart from
the business to which it is attached." 37

In accounting, goodwill is described as the "future economic benefits

arising from assets that are not capable of being individually identified and
separately recognised." 38 It "arises as a result of property specific name and
reputation, customer patronage, location, products, and similar factors, which
generate economic benefits. It is inherent to the trade related property, and
will transfer to a new owner on sale." 39

Parsed from the foregoing, goodwill is essentially characterized as an

intangible asset derived from the conduct of business, and cannot therefore be
allocated and transferred separately and independently from the business as a
whole. Thus, when HSBC transferred its MAB in the Philippines, inclusive of
the Point of Sales terminals, other information technology assets and merchant
agreements, to GP AP-Phils. Inc. in exchange for shares, the goodwill of the
business was also transferred to GPAP-Phils. Inc., being the new owner of the
MAB and its assets. When HSBC subsequently assigned its GPAP-Phils. Inc.
shares to GPAP-Singapore, the goodwill of the MAB remains with GP AP-Phils.
Inc. GPAP-Singapore merely steps into the shoes of HSBC as the majority
stockholder of GPAP-Phils. Inc. Indeed, fundamental is the rule in corporation
law that a corporation is clothed with a personality separate and distinct from its
stockholders; and the "[m]ere ownership by a single stockholder or by
another corporation of all or nearly all of the capital stock of a corporation is not
of itself sufficient ground for disregarding the separate corporate personality." 40

The CIR however finds the methodology employed by respondent as a

form of a tax evasion scheme to escape income tax liability. According to the
CIR, the formation of GPAP-Phils. Inc. was to circumvent the law by

33
Bachrach Motor Co. v. Esteva, G.R. No. 44510, December 24, 1938, 67 Phil. 16, 29.
34
See Mona Shin, Lightened Taxpayer Burdens in the Sale of Personal Goodwill After H&M, Inc. v.
Commissioner, The Tax Lawyer, Volume 67, No. 2 (2014), accessed at <http://www.jstor.org/stable/24
247753>.
35
Richard N. Owens, Goodwill in the Accounts. The University Journal qfBusiness, Volume I, No. 3, p.
284 (I 923), accessed at <http://www.jstor.org/stable/2354868>.
36
Walter J. Derenberg, Territorial Scope and Situs of Trademarks and Good Will, Virginia law
Review, Volume 47, No. 5, p. 736 (1961 ), accessed at <https://www.jstor.org/stable/1071060>.
37
An Inquiry into the Nature of Goodwill, Columbia Law Review, Volume 53, No. 5, p. 673 (1953),
accessed at <https://www.jstor.org/stable/l l 18896>.
38
PRESCRIBING THE PHILIPPINE VALUATION STANDARDS (I ST EDITION) - ADOPTION or THE IVSC
VALUATION STANDARDS UNDER PHILIPPINE SETTING. Department of Finance, Department Order No.
037-09, October 19, 2009.
'' Id.
4
° Construction & Development Corporation of the Philippines v. Cuenca. G.R. No. 163981, August 12,
2005, 466 SCRA 714, 727.
Decision 10 G.R. No. 227121

classifying the subject transaction as a sale of shares of stock instead of a sale

of asset and goodwill, which is subject to regular corporate income tax.

The Court is not persuaded.

A taxpayer has the legal right to decrease the amount of what otherwise
41
would be his taxes or altogether avoid them by means which the law permits.
This is called tax avoidance. It is the use of legal means to reduce tax liability.
However, this method should be used by the taxpayer in good faith and at
arms-length. 42

In this case, when HSBC transferred the assets of its MAB in the
Philippines to GP AP-Phils. Inc. in exchange for shares, pursuant to the tax-
free exchange provision under Section 40(C)(2) of the 1997 NIRC, as
amended, and subsequently sold such shares to GP AP-Singapore and paid the
corresponding CGT in accordance with Section 27(D)(2) of the same Code, it
simply availed of tax saving devices within the means sanctioned by law.
Further, this methodology was adopted by HSBC not merely to reduce taxes
but also for a legitimate business purpose - i.e. the restructuring of the MAB
to achieve more efficiency and economies of scale. 43 Consequently, what was
employed to minimize taxes was a tax avoidance scheme.

Contrariwise, tax evasion is "a scheme used outside of those lawful

means." 44 It "connotes fraud thru the use of pretenses and forbidden
devices to lessen or defeat taxes."45 To constitute tax evasion, the following
factors must be proven: "(l) the end to be achieved, i.e., the payment of less
than that known by the taxpayer to be legally due, or the non-payment of tax
when it is shown that a tax is due; (2) an accompanying state of mind which
is described as being "evil," in "bad faith," "willful," or "deliberate and not
accidental"; and (3) a course of action or failure of action which is
unlawful. " 46 In other words, the payment of lesser taxes does not necessarily
constitute tax evasion. The taxpayer's resort to minimize taxes must be in the
context of fraud, which must be proven by clear and convincing evidence and
cannot be based on mere speculation. 47 Here, the CIR failed to proffer any
clear and convincing proof of fraud on the part of respondent.

Accordingly, the Court finds no reason to reverse the findings of the

CTA EB and uphold the validity of the CIR's assessment against respondent.

41 Yutivo Sons Hardware Co. v. Court of Tax Appeals, G.R. No. L-13203, January 28, 1961, I SCR/\ 160,
168.
42 Commissioner of Internal Revenue v. Estate of Benigno P. Toda, Jr., G.R. No. 147188, September 14,
2004, 438 SCRA 290, 298.
43
See rollo, p. 431.
~ Commissioner oflnternal Revenue v. Estate of Benigno P. Toda, Jr., supra note 42.
4
' Yutivo Sons Hardware Co. v. Court of Tax Appeals, supra note 41, at 167.
46
Commissioner of lnternai Revenue v. Estate of Benigno P. Toda, Jr., supra note 42, at 299.
47
Yutivo Sons Hardware Co. v. Court of Tax Appeals, supra note 41, at 167.
Decision ]I G.R. No. 227121

WHEREFORE, premises considered, the instant Petition is DENIED.

The Decision dated May 17, 2016 and Resolution dated September 9, 2016 of
the Court of Tax Appeals en bane in CTA EB Case No. 1257 are hereby
AFFIRMED.

SO ORDERED.

IN S. CAGUIOA

WE CONCUR:

Chie Justice
Chairperson

Associate Justice

SAMUEL H. GAER AN
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion the Court's Division.