BIR Ruling [DA-349-97]

October 29, 1997 BIR RULING [DA-349-97] SGV & Co. 6760 Ayala Avenue 1226 Makati City Attention: Atty . S . U . Salvador , Jr . Gentlemen : This refers to your letter dated October 8, 1997 stating that there are adjustments in the net asset values of the properties to be transferred by Monterey Farms Corporation (MFC) to Monterey Foods Corporation (formerly G & G Meat and Livestock Corporation, which has since changed its name to Monterey Foods Corporation or Monterey Foods) as a result of the spin-off of MFC's farming operations, as well as the revise percentage of MFC's ownership in Monterey Foods; that these adjustments are the result of finalization of MFC's audited financial statements only last October 6, 1997, which did not match the estimated values presented in your letter dated August 27, 1997; that based on these audited financial statements, a Master Deed of Assignment was subsequently executed on October 8, 1997, wherein MFC transferred to Monterey Foods some of its land and improvements, inventories, accounts receivables and other assets and liabilities pertaining to its farming operations, all amounting to a net asset value of P379,794,000.00; that as a result of this exchange, MFC will acquire 89% of the total subscribed voting stock of Monterey Foods; and that the over-all plan and business reason for the reorganization remains the same. LexLib Based on the foregoing, you are requesting for confirmation that the requirements of the tax-free exchange of property under Section 34(c)(2) and (6)(c) of the Tax Code, as amended are still maintained. In reply, please be informed that the tax consequences and requirements of this transaction as confirmed in BIR Ruling No. DA-325-97 remains valid and applicable under these new circumstances. 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. prcd Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV OIC - Assistant Commissioner (Legal Service)