BIR Ruling

April 23, 1975 Messrs. C. J. Valdes & Associates P. O. Box 2373, Manila Gentlemen : This refers to your letter dated July 30, 1974 requesting a ruling to whether or not the gain to be derived by your client, the Superior of the Filipino Corporation of Claretian Fathers, Inc. from the proposed sale of its parcel of land situated at Bagumbayan, Taguig, Rizal are subject to tax. It is represented that your client, the Superior of the Filipino Corporation of Claretian Fathers, Inc., is a religious corporation organized and existing under the laws of the Philippines; that your client purchased a parcel of land situated at Bagumbayan, Taguig, Rizal and covered by Transfer Certificate of Title No. 366723 of the Register of Deeds of the Province of Rizal for the purpose of constructing a seminary thereon; that the said property at present is no longer suitable for such purpose, that your client intends to sell the said parcel of land and the net proceeds thereof shall be used exclusively for the purchase of a new site and the construction thereon of a seminary building. In reply thereto, I have the honor to inform you that the profits which may be realized from the proposed sale of the aforesaid parcel of land by your client, the Superior of the Filipino Corporation of Claretian Fathers, Inc., are not subject to tax, it appearing that the proceeds of such sale will be used exclusively for the purchase of a new site and the construction thereon of a seminary building. In the case of Manila Polo Club vs. Collector of Internal Revenue (CTA Case No. 293, prom. August 31, 1959), exemption from the payment of income tax on profits derived from the sale of real properties was granted with the condition that the proceeds of such sale were to be used exclusively to acquire and develop another property essential for the purpose for which the Club was organized. aisa dc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."