BIR Ruling [DA-108-03]

April 4, 2003 BIR RULING [DA-108-03] Section 24 (D) (1); DA-122-2002 Office of the Governor Province of Pangasinan Lingayen, Pangasinan Attention: Atty. Geraldine U. Baniqued Provincial Legal Officer Gentlemen : This refers to your letter dated October 29, 2002 requesting for a reconsideration of BIR Ruling No. DA-122-2002 dated July 23, 2002 denying your request for exemption from capital gains tax. In reply, please be informed that this Office has been consistent in its opinions that the sole basis for which a swapping of real properties could be a ground for exemption from the payment of capital gains tax and documentary stamp tax are confined to the following conditions: First, that there was a mistake in the construction of an improvement in the lot owned by another (having the same size, value, and situated in the same barangay) or in the issuance of title; and second, that there was no monetary consideration . Regrettably, the provision of Section 24(D)(1) of the 1997 Tax Code did not include exemption of transactions similar to the case at hand which is to prevent the disruption in the delivery of health services and to avoid a long and tedious court litigation . Thus, this Office is unable to grant your request for lack of legal basis. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service