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Philamlife v. Cir SP No. 31283
Philamlife v. Cir SP No. 31283
FACTS: HELD/RATIO:
Petitioner Philippine American Life Insurance Co., Inc. (PHILAMLIFE) a
domestic corporation entered into a Management Services Agreement Section 37. Income from Services within the Philippines, (a) Gross income from
with American International Reinsurance Co., Inc. (AIRCO), a non-resident sources within the Philippines — the following items of gross income shall be treated
foreign corporation with principal place of business in Pembroke, as gross income from source within the Philippines.
Bermuda.
Whereby, effective January 1, 1972, for a fee of not exceeding $250,000.00 (4) Rentals and royalties — Rentals and royalties from properties located in the
per annum, AIRCO shall perform for PHILAMLIFE the following services Philippines or from any interest in such property, including rentals or royalties for—
regarding Investment, Underwriting and Marketing, Education and ...
Training, Accounting and Auditing, Corporate and Personnel. (c) The supply of scientic, technical, industrial or commercial knowledge
AIRCO merged with petitioner American International Group, Inc. (AIGI) or informations;
with the latter as the surviving corporation and successor-in-interest in (d) The supply of any assistance that is auxiliary and subsidiary to, and is
AIRCO's Management services Agreement with PHILAMLIFE. furnished as a means of enabling the application or enjoyment of, any property, or
CIR issued in favor of PHILAMLIFE Tax Credit Memo in the amount of right as is mentioned in paragraph (a), any such equipment as is mentioned in
P643,125.00 representing erroneous payment of withholding tax at source paragraph (b) or any such knowledge or information as is mentioned in paragraph
on remittances to AIGI for services rendered abroad in 1979. (c); or
...
PHILAMLIFE, in a letter dated March 12, 1981, led with respondent a
(f) Technical advice, assistance or services rendered in connection with the
claim for the refund of the second erroneous tax payment of P643,125.00
technical management and administration of any scientic, industrial or commercial
Without waiting for respondent to resolve the claim for refund, petitioners
undertaking, venture, project of scheme; and
led with the Honorable Court on July 29, 1982 the petition seeking said
refund.
During the pendency of the case, respondent, in a letter dated April 15, this Court rules that while it is true petitioner AIGI has no properties in the
1985, denied PHILAMLIFE's claim for refund of P643,125.00 as withholding Philippines, agreement with petitioner PHILAMLIFE necessary for the latter
tax at source for 1980. Moreover, respondent cancelled the Tax Credit company's ecient operation and growth, with petitioner AIGI deriving
Memo in the amount of P643,125.00 previously issued to PHILAMLIFE on income from said agreement, petitioner AIGI is well-within the ambit of
November 18, 1980 and requested the latter to pay the amount of Section 37 (a)(7) of the Tax Code.
P643,125.00 as deciency withholding tax at source for 1979 plus It is not the presence of any property from which one derives rentals and
increments royalties that is controlling, but rather as expressed under the expanded
Without protesting the assessment for the amount of P643,125.00 as meaning of "royalties", it includes " royalties for the supply of scientic,
deciency withholding tax at source for 1979, petitioners led with this technical, industrial, or commercial knowledge or informations; and the
Honorable Court on June 14, 1985 the petition, seeking the annulment of technical advice, assistance or services rendered in connection with the
said assessment. technical management and administration of any scientic, industrial or
commercial undertaking, venture, project or scheme", and others
WHEREFORE, the instant petition for review is DISMISSED by the Court for lack of
merit. The respondent court's decision dated March 10, 1993 and order dated May
19, 1993 in C.T.A. Cases Nos. 3504 and 3943 are hereby Armed. Costs against
petitioners.
IT IS SO ORDERED.