BIR Ruling No. 144-82

April 23, 1982 BIR RULING NO. 144-82 29-000 000-00 144-82 The Regional Director Revenue Region No. 3-A San Fernando, Pampanga S i r : This refers to your letter dated December 9, 1981 requesting a ruling on the taxability of the compensation received by tenants of a landed estate from the landowner as disturbance fee. It is represented that the San Miguel Brewery bought some 66 hectares of sugar land in San Fernando, Pampanga as a site of their main compound; that out of the proceeds of the sale a substantial amount was paid to the 33 tenants of the landowner who were party to the sale; and that aside from the said amount each tenant was allocated residential lots by the said landowner along the perimeter of the San Miguel Brewery compound. In reply, please be informed that any and all amounts received by the 33 tenants on account of such sale including the fair market value of the residential lots as disturbance compensation fee are considered ordinary income within the purview of Section 29(b) (now Section 29(c)) of the Tax Code as implemented by Section 39 of Revenue Regulations No. 2 and are, therefore subject to income tax pursuant to Section 21 of the same Code (See A. L. Parker vs. Commissioner of Internal Revenue 5TC 1355). aisadc Very truly yours, RUBEN B. ANCHETA Acting Commissioner