Sole proprietress and her CPA charged with tax evasion for substantial underdeclaration of sales

Posted on May 24, 2012 by dofweb

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against TERESITA DEVELUZ ASLAM (ASLAM) for willful attempt to evade or defeat tax and deliberate failure to supply correct and accurate information in her Income Tax Return (ITR) and Value Added Tax (VAT) Return for taxable years 2009 and 2010, in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

Likewise charged was AMADO NAGAR SARTO (SARTO), the independent Certified Public Accountant (CPA) who certified the Financial Statements of ASLAM for 2009 and 2010, in violation of Section 257 of the Tax Code.

ASLAM is the sole proprietress of HUDGES INDUSTRIES with business address at Unit 107-A Paradise Building, Palm Grove BLS, Don Bosco, ParaƱaque City.  She is a supplier of towels and linens.

The case against ASLAM stemmed from a preliminary investigation conducted by the BIR on the alleged tax evasion schemes being perpetrated by the former.

Among the customers of ASLAM are Puregold Duty Free Subic, Inc., Puregold Duty Free, Inc., Aboitiz Transport System Corp., EVER, Makati Shangri-la Hotel and Resort, Inc., Manila Hotel, Manila Polo Club, Marie-France Bodyline International, Robinsons Inc., Rustan Commercial Corp., Sofitel Philippine Plaza, The Peninsula Manila, Gaisano Dadiangas, Inc., Megaworld Corporation and Waterfront Management Corp.

Certifications of income payments obtained from Puregold and an examination of the copies of the schedule of purchases from ASLAM which were extracted from the Summary List of Purchases (SLP) filed with the agency by ASLAM’s customers revealed that ASLAM received income payments amounting to P84.59 million in 2009 and P85.66 million in 2010.

A comparison of the ITR filed by ASLAM and the data gathered by BIR investigators showed an underdeclaration of sales of more than 30%. Under the Tax Code, an underdeclaration of more than 30% constitutes fraud tantamount to tax evasion.

ASLAM was assessed a total deficiency tax liability of P67.79 million, inclusive of surcharges and interests, broken down into: Income Tax – P32.58 million (2009) & P35.21 million (2010); and VAT – P9.97 million (2009) & P12.17 million (2010).

SARTO, on the other hand, was included in the charge sheet for issuing an unqualified opinion in his certification of the 2009 and 2010 audited financial statements of ASLAM despite knowledge of the existence of such income payments/underdeclarations.

The case against TERESITA DEVELUZ ASLAM and CPA AMADO NAGAR SARTO is the 109th filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. (reytdlc)

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