BIR Ruling

December 14, 1970 Bengzon, Villegas & Zarraga Attorneys & Counsellors at Law 10th Floor, Building 1010 A. Mabini, Ermita, Manila Gentlemen : This refers to your letter dated August 17, 1970 requesting opinion of this Office as to the income tax consequences of the proposed sale by your client, the La Orden de pp. Benedictinos De Las Islas Filipinas, San Beda College, Mendiola Manila, of its five (5) parcels of land situated in Pamplona, Las Pias, Rizal. It is represented that the La Orden de pp. Benedictinos De Las Islas Filipinas (hereinafter referred to as the corporation) is a duly organized corporation operated exclusively for religious purposes, no part of the net income of which inures to the benefit of any private stockholder or individual; that the corporation, the members of which are all Roman Catholic priests and brothers, has been operating religious schools ever since to Spanish regime in the Philippines, one of which is the San Beda College of Manila; that the corporation, sometime in 1969, brought (5) parcels of land situated in Pamplona, Las Pias, Rizal for the purpose of establishing thereat a school; that the corporation was about to start construction of school buildings on the aforementioned parcels of land when the Vatican disapproved the project for the reason that being a religious mission society, it should establish religious schools outside Manila and suburbs; that the corporation found a suitable location for the establishment of the proposed school in the City of Batangas; and that since the money intended to be used for the purpose of acquiring the school site is tied down with the aforesaid five (5) parcels of land situated in Pamplona, Las Pias, Rizal, the corporation therefore would wish to sell the aforesaid five (5) parcels of land and in turn use the proceeds thereof to acquire school sites in other provincial places. Based on the foregoing representatives, and following the ruling in the case of the Manila Polo Club vs. Collector of Internal Revenue (CTA Case No. 293, promulgated August 31, 1959), this Office is of the opinion and so holds that the profits to be realized by the La Orden De pp. Benedictinos De Las Islas Filipinas from the proposed sale of its five (5) parcels of land situated in Pamplona, Las Pias, Rizal, are exempt from income tax. It is to be understood that the exemption is subject to the condition that the proceeds of sale will be used in acquiring and developing another property for use of schools operated by the abovenamed corporation. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue