G.R. No. 205261 - PHILIPPINE VETERANS BANK, VS. COMMISSIONER OF INTERNAL REVENUE.

Ruling

WHEREFORE, the Petition for Review is hereby PARTIALLY GRANTED. The assessments for deficiency documentary stamp tax on the Increase in Capitalization issued by respondent against petitioner for taxable years 1995 and 1996 in the amounts of P12,337,500.00 and P5,209,066.80, respectively, are hereby CANCELLED and WITHDRAWN in view of the Termination Letter dated June 7, 2010 issued by respondent as regards petitioner's availment of the Abatement Program under Revenue Regulations No. 15-2006, as amended by Revenue Regulations No. 03-07, in relation to Sections 204 and 244 of the NIRC of 1997, as amended. The assessments for deficiency documentary stamp tax on petitioner's Special Savings Accounts, Special Savings Deposits and Golden Vs for taxable years 1994, 1995, and 1996, are hereby AFFIRMED WITH MODIFICATION. Petitioner is hereby ORDERED TO PAY respondent the amount of P25,707,090.66, computed as follows: xxx xxx xxx In addition, petitioner is likewise ORDERED TO PAY interest thereon at the rate of twenty percent (20%) per annum commencing on November 8, 2002 until full payment thereof, pursuant to Section 248(d), in relation to Section 249, both of the NIRC of 1977, as amended. The assessments for deficiency Gross Receipts Tax for taxable year 1996 and deficiency gross receipts tax for taxable year 1996 [sic], is also AFFIRMED WITH MODIFICATION. Petitioner is hereby ORDERED TO PAY respondent the amount of P3,499,320.78, computed as follows: xxx xxx xxx In addition, petitioner is likewise ORDERED TO PAY interest thereon at the rate of twenty percent (20%) per annum commencing from January 20, 1997 until full payment thereof, pursuant to the above-quoted Section 249(a) of the NIRC of 1997; and delinquency interest at the rate of twenty percent (20%) per annum commencing from November 8, 2002 until full payment thereof, pursuant to the said Section 249(c) of the same law. [27] The petitioner filed a Petition for Review of the October 8, 2010 Decision of the CTA Division before the CTA En Banc . [28] Affirming the October 8, 2010 Decision of the CTA Division, the dispositive portion of the December 20, 2012 Decision of the CTA En Banc provides: WHEREFORE, premises considered, the instant Petition for Review is hereby DISMISSED for lack of merit. [29] The petitioner filed the instant petition, assailing the December 20, 2012 Decision of the CTA En Banc . The Issues I. Whether or not the Special Savings Accounts of the Philippine Veterans Bank are subject to documentary stamp tax II. Whether or not final withholding taxes on the gross interest income of Philippine Veterans Bank are deductible from gross receipts for purpose of determining the bank's gross receipts tax [30] The Court's Ruling The petition is denied for lack of merit. On the first issue, We rule that the Special Savings Accounts of the Philippine Veterans Bank are subject to DST. On the second issue, We rule that the final withholding taxes on the gross interest income of Philippine V