COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. MANILA BANKERS' LIFE INSURANCE CORPORATION, CORPORATION, Respondent. LEONARO!E CASTRO, ". FACTS: On December 14, 1999, based on the fndings o its Revene O!cers, O!cers, the "etitioner #$R issed a %re&iminar' Assessment (otice against the res"ondent res"ondent )ani&a #an*ers +ie $nsrance Cor"oration or its defcienc' interna& revene taes or the 'ear 199-.The res"ondent agreed to a&& the assessments issed against it ece"t to the amont o%/, 01,23.9 re"resenting re"resenting defcienc' docmentar' stam" taes on its "o&ic' "remims and "ena&ties. Ths, on 5anar' 4, /, the "etitioner issed against the res"ondent a Forma& +etter o Demand 6ith the corres"onding corres"onding Assessment (otices attached. On Febrar' 0, /, the res"ondent f&ed its +etter o %rotest 6ith the #rea o $nterna& Revene 7#$R8 contesting the assessment or defcienc' docmentar' stam" ta on its insrance "o&ic' "remims. $t remained enacted "on, and ths, on October /2, /, the res"ondent f&ed a %etition or Revie6 6ith the CTA or the cance&&ation o Assessment (otice. The CTA granted the "etition, 6hich the CA a!rmed. Ths, this "etition f&ed b' the C$R. The defcienc' docmentar' docmentar' stam" ta 6as assessed on on the increases in the &ie insrance coverage o t6o *inds o "o&icies: the )one' %&s %&an, 6hich is an ordinar' term &ie insrance "o&ic' and the gro" &ie insrance "o&ic'. "o&ic'. The )one' %&s %&an is a /;'ear /;'ear term term ordinar' &ie insrance "&an 6ith a <aranteed Continit' C&ase 6hich a&&o6ed the "o&ic' ho&der to contine the "o&ic' ater the /;'ear term sb=ect to certain conditions. >nder the "&an, the "o&ic' ho&ders "aid their "remims in fve se"arate "eriods, 6ith the "remim "a'ments, ater the frst "eriod "remims, to be made on&' "on reaching a certain age. The scceeding "remim "a'ments trans&ated to increases in the sm assred. Ths, the "etitioner be&ieved that since the docmentar' stam" ta 6as a!ed on the "o&ic' based on&' on the frst "eriod "remims, then the scceeding "remim "a'ments sho&d &i*e6ise be sb=ect to docmentar' stam" ta. $n the case o res"ondents gro" gro" insrance, the defcienc' docmentar' stam" ta 6as im"osed on the "remims or the additiona& members to a&read' eisting and e?ective master "o&icies. The "etitioner conc&ded that an' additiona& member to the gro" o em"&o'ees, 6ho 6ere a&read' insred nder the eisting mother "o&ic', sho&d simi&ar&' be sb=ected to docmentar' stam" ta.
$SS>@: hether or not docmentar' stam" ta sho&d be im"osed on increase de to additiona& "remims in the )one' %&s %&an and the gro" insrance "&an B@+D: The "etition is granted. granted. TAAT$O(: TAAT$O(: Docmentar' stam" stam" ta on insrance insrance "o&icies. >nder Section 1-0 o the Ta Code, the docmentar' stam" ta becomes de and "a'ab&e at the time the insrance "o&ic' is issed, 6ith the ta based on the amont insred b' the "o&ic' as "rovided or in Section 130. The "rovision 6hich s"ecifca&&' a""&ies to rene6a&s o &ie insrance "o&icies is Section 130, 6hich states that on a&& "o&icies o insrance or other instrments b' 6hatever name the same ma' be ca&&ed, 6hereb' an' insrance sha&& be made or rene6ed "on an' &ie or &i ves, there sha&& be co&&ected a docmentar' stam" ta. Bere, it is c&ear rom the tet o the garanteed continit' c&ase that 6hat the res"ondent 6as acta&&' o?ering in its )one' %&s %&an 6as the o"tion to rene6 the "o&ic', ater the e"iration o its origina& term. Conseent&', the acce"tance o this o?er 6o&d give rise to the rene6a& o the origina& "o&ic'. e cannot agree 6ith the CTA in its ho&ding that the rene6a&, is in e?ect treated as an increase in the sm assred since no ne6 insrance "o&ic' 6as issed. The rene6a& 6as not meant to restore the origina& terms o an o&d agreement, bt instead it 6as meant to etend the &ie o an eisting agreement, 6ith some o the contracts terms modifed. This rene6a& 6as sti&& sb=ect to the acce"tance and to the conditions o both the insred and the res"ondent. Ths, it 6as sb=ect to the im"osition o docmentar' stam" ta nder Section 130as insrance rene6ed "on the &ie o the insred. ith regard to the gro" "o&ic', the res"ondent asserts that since the docmentar' stam" ta, b' its natre, is "aid at the time o the i ssance o the "o&ic', then there can be no other i m"osition on the same, regard&ess o an' change in the nmber o em"&o'ees covered b' the eisting gro" insrance. Bo6ever, ever' time the res"ondent registers registers and attaches another em"&o'ee an eisting master "o&ic', it eercises eercises its "rivi&ege to condct its bsiness o insrance and this is "atent&' sb=ect to docmentar' stam" ta as insrance made "on a &ie nder Section 130. henever a master "o&ic' admits o another member, another &ie is insred and covered. %etition is
