BIR Ruling [DA-314-03]

September 25, 2003 BIR RULING [DA-314-03] The Revenue District Officer Revenue District Office No. 21 San Fernando, Pampanga S i r : This has reference to the application for issuance of Certificate Authorizing Registration (CAR) relative to the deed of sale executed by and between Solid Distributors, Incorporated (SDI) and Solid Manila Corporation (SMC). The capital gains and documentary stamp taxes due on the sale were already paid. However, the processing or the issuance of the CAR was held in abeyance because the Revenue Officer to whom the case was assigned believed that the consideration agreed by the parties was very low considering that it is located in a predominantly commercial area. Accordingly, a recomputation of the taxable value based on the market price of the adjacent properties be made. By virtue of the request of the taxpayer, through counsel, this Office ruled that only the Commissioner has the authority to determine the fair market value of real properties in specific zone or areas. Once the zonal value has been established in any particular area, the same shall be applied in computing all internal revenue taxes due on sales, exchanges, or other dispositions of real property. In short then, the Revenue Officer has no discretion to determine the classification or valuations different from what has been determined by the Commissioner. DCScaT In this connection, you are hereby directed to instruct the Revenue Officer concerned to compute the taxes due on the sale executed by and between SDI and SMC using the zonal valuation of the property existing at the time of sale and to process the issuance of CAR. Please be guided accordingly. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group