BIR Ruling No. 093-65

August 20, 1965 BIR RULING NO. 093-65 Mr. Conrado N. Paez 1811 Taft Avenue Extension Pasay City S i r : This refers to your request for information as to whether or not property consisting of land, building and machinery used as ice plant for the period from 1948 to 1960 and sold in 1961, is an ordinary asset or capital asset. In reply thereto, I have the honor to inform you that the aforesaid property is an ordinary asset inasmuch as it is used in connection with the trade or business of the taxpayer pursuant to Section 34(a)(1) of the Tax Code. For purposes of the computation of the monthly percentage tax on the sale of ice, the cost of water used in manufacture is not deductible for the producer who sold you the water paid the 3% tax prescribed by Section 191 of the Tax Code on his receipts therefrom and not the 7% sales tax prescribed by Section 186 of the same Code. The cost of ammonia and salt is not also deductible for they are not actually ingredients in the production of ice and forming part thereof but mere aids in production which vanishes in the course thereof. Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue