Certified Photocopy of Certificate of Sale Attested by Sheriff-Executor, Sufficient Basis for Payment of CGT

August 6, 1998 BIR RULING NO. 118-98 56 (A) (3)-000-00-118-98 Mr. Bartolome B. Lapus 395 P. Guevarra Street San Juan, Metro Manila S i r : This refers to your letter dated March 5, 1998 requesting for a ruling on the following queries: "1. Whether a certified xerox copy attested by the sheriff-executor concerned of a Certificate of Sale over a real property is sufficient basis for payment of capital gains tax, the original of which has been lost?; and "2. Whether for the purpose of capital gains tax payment for real property, a situation wherein the present successor-in-interest, a lien holder, desirous to pay the tax for the covering instrument of sale, is he obligated likewise to have the unpaid tax settled for the predecessor-in-interest (previous seller), also a lien holder, before being allowed to pay the tax due from the latest transaction? prLL It is represented that Treasure Homes Industries, Inc. is the registered owner of a parcel of land situated in Cubao, Quezon City with an area of Six Hundred (600) sq.m. more or less and covered by Transfer Certificate of Title No. 191602 issued by the Registry of Deeds of Quezon City; that the said realty was sold at public auction in favor of Delta Motors Corporation by virtue of a writ of execution in Civil Case No. 36707 of the Court of First Instance, Rizal; that the registration of the arising ownership has not been effected, although said sale is annotated in the Title; and that subsequently, in a judgment execution against Delta Motors Corporation in NLRC Case Nos. 7-2356-85; 8-2688-85; 9-2828-85 and 10-3452-85 subject property was sold at public auction in your favor. In reply, please be informed that the above queries are answered as follows: 1. Your first query is answered in the affirmative. Under Section 24, Rule 132 of the Revised Rules of Court, secondary evidence of a public documents may be used as evidence even against a third person of the fact which gave rise to their execution and of the date of the latter when it appears that the officer by whom they purport to be certified had the right to the custody of the record and had authority to furnish authenticated copies, and ordinarily, it is sufficient basis for payment of the capital gains tax when the original of said documents has been lost. 2. For purposes of settling the corresponding tax liability/ies arising, from the latest auction sale, the present successor-in-interest is not under any obligation to pay the tax liability of the predecessor-in-interest, before being allowed to pay the tax due from the latest sale (auction sale) transaction. However, for purposes of registration of the said Sheriff Certificate of Sale with the Registry of Deeds concerned both tax liabilities of the predecessor-in-interest (seller) and that of the present successor-in-interest must first be settled before registration of the said Sheriff Certificate of Sale may be effected by the Registry of Deeds concerned pursuant to Section 56(A)(3) of the Tax Code of 1997 which reads: "No registration of any document transferring real property shall be effected by the Registry of Deeds unless the Commissioner or his duly authorized representative has certified that such transfer has been reported, and the tax herein imposed, if any, has been paid." Should payment of both tax liabilities be made by the present successor-in-interest, the portion of such payment pertaining to the tax liability of the predecessor-in-interest may be reimbursed by the predecessor-in-interest pursuant to Article 22 of the Civil Code, should the present successor-in-interest seek reimbursement of the same. dctai 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. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue