BIR Ruling [DA-108-02]

June 07, 2002 BIR RULING [DA-108-02] 40 (C) (2) (6) (c) S-40-064-02/05-09-2002 Li Seng Giap & Sons, Inc. 747 Padilla Street, San Miguel, Manila Attention: Mr. Wilson T. Lee Corporate Secretary Gentlemen : This refers to your undated letter requesting for a correction of the fair market value of the properties with TCT Nos. T-37576, T-80611, T-79795, T-59687, T-59686 and T-59685, as well as the total amount of the acquisition cost of all the properties which will be transferred by Li Seng Giap & Sons, Inc. to LSG Land Development, Inc. in exchange for the latter's shares in relation to BIR Ruling No. S-40-064-2002 dated May 9, 2002. In the said BIR Ruling, this Office confirmed your representations that the fair market value of the aforementioned real properties to be transferred, are as follows: Matrix 1 Property Location Fair Market Value T-37576 J. Abad Santos, Tondo P8,262,000.00 Manila T-80611 J. Abad Santos, Tondo P6,995,740.00 Manila T-79795 G. Puyat St., Quiapo, P17,089,300.00 Manila T-59687 J. Abad Santos, Tondo P40,479,440.00 Manila T-59686 J. Abad Santos, Tondo P40,479,440.00 Manila T-59685 J. Abad Santos, Tondo P40,479,440.00 Manila However, you now assert that the correct fair market value of the subject properties should be as follows: Matrix 2 Property Location Fair Market Value T-37576 J. Abad Santos, Tondo P17,089,300.00 Manila T-80611 J. Abad Santos, Tondo P15,257,740.00 Manila T-79795 Gonzalo Puyat St., P8,317,958.21 Quiapo, Manila T-59687 Gonzalo Puyat St., P31,313,842.32 Quiapo, Manila T-59686 Gonzalo Puyat St., P685,155.00 Quiapo, Manila T-59685 Gonzalo Puyat St., P162,484.47 Quiapo, Manila In view of the foregoing, you are requesting in effect for a ruling modifying the said BIR Ruling to reflect the correct fair market value of the said properties. In reply, please be informed that upon further evaluation of the Tax Declarations pertaining to the fair market value of the subject properties to be transferred, this Office hereby confirms your request that the fair market value of the properties to be transferred should be in accordance with Matrix No. 2 of this Ruling. Thus, pages 1 and 2 of BIR Ruling No. S-40-064-2002 dated May 9, 2002, particularly the entries made relative to the abovementioned Transfer Certificates of Title, as well as the total amount of the acquisition costs of all the properties to be transferred including the abovementioned TCTs, are hereby modified insofar as the fair market value and total acquisition cost of the real properties to be transferred by Li Seng Giap & Sons, Inc. to LSG Land Development, Inc. in exchange for the latter's shares of stock, which should read as follows: Property Location Area in Fair Market Zonal Value Acquisition Sq. M. Value Cost TCT No. 14937 Barraca St., 790.60 P9,470,530.00 P9,487,200 P3,527,839.00 Binondo, Manila TCT No. 14932 Barraca St., 790.60 P9,463,480.00 P9,487,200 P3,527,839.00 Binondo, Manila TCT No. 14933 Barraca St., 790.60 P9,463,480.00 P9,487,200 P3,527,839.00 Binondo, Manila TCT No. 14934 Barraca St., 35.90 P619,220.00 P422,400 P160,194.00 Binondo, Manila TCT No. 14935 Barraca St., 22.70 P368,380.00 272,400 101,289.00 Binondo, Manila TCT No. 59677 Caballero St., 332.30 P2,439,082.00 P2,990,700 P865,000.00 Binondo, Manila TCT No. 59671 Caballero St., 700.10 P2,569,370.00 P6,300,900 P1,275,000.00 Binondo, Manila TCT No. 37576 J. Abad Santos, 1,619.70 P17,089,300.00 P60,738,750 P6,050,000.00 Tondo, Manila TCT No. 80611 J. Abad Santos, 1,200.20 P15,257,740.00 P45,007,500 P5,855,000.00 Tondo, Manila TCT No. 79795 G. Puyat St., 588.80 P8,317,958.21 P28,851,200 P1,179,790.00 Quiapo, Manila TCT No. 59687 G. Puyat St., 2,216.60 P31,313,842.32 P108,613,400 P4,440,315.00 Quiapo, Manila TCT No. 59686 G. Puyat St., 48.50 P685,155.00 P2,376,500 P97,158.00 Quiapo, Manila TCT No. 59685 G. Puyat St., 11.50 P162,484.47 P563,500 P23,037.00 Quiapo, Manila TCT No. 23517 A. Mabini St., 1,011.00 P2,780,250.00 P11,626,500 P500,000.00 Caloocan City TCT No. 4751 Taft Ave., Pasay 2,000.00 P20,000,000.00 P56,000,000 P4,795,000.00 City TCT No. 59679 Elcano St., 246.00 P4,241,590.00 P5,535,000 P1,475,000.00 Binondo, Manila TCT No. 20896 David St., 375.85 P4,824,490.00 P19,703,936.25 P2,395,000.00 Binondo, Manila TCT No. 59676 M. de Santos, 310.70 P6,612,045.00 P9,321,000 P2,820,000.00 Binondo, Manila TCT No. 59673 M. de Santos, 593.10 P11,476,485.00 P17,793,000 P5,195,000.00 Binondo, Manila TCT No. 20055 Padilla St., San 11,996.60 P38,991,990.00 P87,575,180 P16,771,684.00 Miguel, Manila TCT No. 20314 Padilla St., San 113.20 P980,770.00 P826,360 P168,316.00 Miguel, Manila TOTAL 25,794.55 197,127,642.00 P492,979,826.25 P64,750,000.00 ========= =========== =========== ========== This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, and/or any of the requirements imposed in this letter are not complied with, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Acting Assistant Commissioner Legal Service