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The Bureau of Internal Revenue (BIR) has lost a P700-million tax collection case against a contractor of high-end condominium buildings in Bonifacio Global City, Taguig, after the Court of Tax Appeals nullified the deficiency assessment notice issued to the latter for sending it late or beyond the three-year prescriptive period.
The Court’s Second Division rejected the plea of the BIR that the 10-year prescriptive period should have been applied to the case of G and W Architects Engineers and Project Consultant Company for filing of fraudulent returns for 2007.
In a 33-page resolution, the court noted that the preliminary and final assessment notices sent to the taxpayer did not expressly mention that the construction firm filed false return, thus evading the payment of income and value-added taxes, R518.2 million and R181.2 million, respectively.
Otherwise, the BIR should had informed the taxpayer on the law and facts on which the tax fraud assessment was made.
Court records showed that the construction company did not pay income tax as it was just a general partnership of engineers and architects unlike real estate developers.
G and W explained that as a consultant it built the two condominium towers in Global City on a build-to-own concept wherein prospective owners of condominium units pooled their funds to build them.
The court did not touch the argument of the BIR that while G and W is a general professional partnership, it is really into the business of real estate developer, dismissing the case on technical ground for violating the three-year prescriptive period. (Jun Ramirez)