The Court of Tax Appeals (CTA) has ordered a businessman to pay the Bureau of Internal Revenue (BIR) P6.6 million in deficiency income and value-added taxes of his company for calendar year 2016.

Redentor Agpuldo Tagala, proprietor of 7th Concept Trading and 7C Construction, filed a petition for review before the CTA seeking the cancellation and withdrawal of the Final Decision on Disputed Assessment (FDDA) dated Dec. 15, 2021 amounting to P10,108,681.35.

The total amount represented income tax of P5,210,592.63, value-added tax of P4,828,088.72, and miscellaneous tax of P70,000. The FDDA was issued after the examination of the firm's books of accounts and other accounting records for the taxable period from Jan. 1 to Dec. 31, 2016.

Tagala argued in his petition that his "attempts to refute the regional officer's findings met some cold treatment, and where volumes of documents and schedules... to disprove the examination findings were outrightly discarded and not given due recognition."

However, the CTA's first division said that Tagala's arguments are just "bare allegations" which are not backed up by any proof. Without any corroborating evidence, the CTA said that it "cannot overturn the presumption of correctness of the assessments."

Even if the CTA would give weight to Tagala's bare allegations, the court said that it would still be "unable to cancel the assessment item outright, and Petitioner (Tagala) would still be compelled to substantiate his expenses. His failure to proffer the necessary evidence prevents the cancellation of the BIR's findings."

While the CTA sustained the BIR's findings, it adjusted the amounts for Tagala's deficiency income tax and value added tax as well as cancelled the assessment for deficiency miscellaneous tax or compromise penalties.

Tagala was ordered to pay the BIR P4,919,840.24 and P1,744,602.96 representing deficiency income tax and value added tax, respectively, inclusive of the 20 percent deficiency interest imposed thereon.

The 68-page decision dated March 11 was written by Associate Justice Jean Marie A. Bacorro-Villena with the concurrence of Presiding Justice Roman G. Del Rosario.