BIR Ruling [DA-269-97]

August 11, 1997 BIR RULING [DA-269-97] Mr. Eulogio S. Ignacio San Roque, Marikina City S i r : This refers to your letter dated March 5, 1997 jointly signed by your wife, Mrs. Perla M. Ignacio, stating that you and your wife are absolute and registered owners of a certain parcel of land previously acquired/purchased from the Government Service Insurance System (GSIS) situated in Shoe Avenue corner H. Roxas Street, San Roque, Marikina City covered by Transfer Certificate of Title No. N-46274 of the Registry of Deeds for the Province of Rizal, with an area of Two Hundred Thirty Seven (237) square meters designated thereunder as Lot 2, Block II of the subdivision plan, Psd 77345; that you have been in possession of the said property since 1950 up to the present which is recently discovered to be Lot 1, Block II of the same subdivision plan; that you have already constructed thereat a residential house; that to subserve the ends of justice, honesty, and good faith, you are therefore reconveying Lot 1, Block II covered by Psd-77345 of the subdivision plan in favor of the GSIS, free from all liens and encumbrances of whatever kind; that for and in consideration of the foregoing, you sold, ceded, conveyed and transferred by way of reconveyance unto GSIS Lot 2, Block II covered by TCT No. N-46274 of the subdivision plan; and that the reconveyance is without monetary consideration. Based on the foregoing representation and documents submitted, you now request for exemption from the payment of the corresponding taxes due on the rectification. In reply, please be informed that since the Deed of Reconveyance executed by and between you and GSIS is without any monetary consideration, and considering further that the execution of the said document is merely to correct a mistake, this Office is of the opinion as it hereby holds that the aforementioned transaction is not subject to the capital gains tax, imposed under Section 21 (e) of the Tax Code nor to the creditable withholding tax imposed under Revenue Regulations No. 1-90. Furthermore, it is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code. However, the notarial acknowledgment to the said document is subject to the documentary stamp tax of P15.00 only pursuant to Section 188 of the Tax Code, as amended by Republic Act No. 7660. (BIR Ruling No. 027-93 dated January 15, 1993) 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, then this ruling shall be considered null and void. aIcDCA Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV OIC-Assistant Commissioner (Legal Service)