BIR Ruling No. 085-61

February 14, 1961 BIR RULING NO. 085-61 Mr. Pedro C. Habaton President, Davao Business School, Inc. Davao City S i r : With reference to your letter dated June 6, 1958, requesting that the Davao Business School, Inc., Davao City, of which you are the President and Director, be exempt from the payment of income and realty taxes, pursuant to Section 27(e) of the Tax Code, I have the honor to inform you that in an investigation conducted by Mr. Eladio P. Jaen, an agent of the Provincial Revenue Officer of Davao City, it was found out that profits derived from the operation of said business school inured to the benefits of the stockholders in the form dividends received by them annually. Accordingly, Section 27(e) of the Tax Code quoted hereunder, and from which you rely and seek exemption is not applicable in your favor: "Section 27(e) Corporation or association organized and operated exclusively for religious, charitable, scientific, athletic, cultural, or veterans no part of the net income of which inures to the benefit of any stockholder or individual : Provided, however, that the income of whatever kind and character from any of its properties, real or personal or from any activity conducted profit, regardless of the disposition made of such income, shall be liable to the tax imposed under this Code" . (Emphasis supplied) cdta Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue