BIR Ruling No. 192-82

June 4, 1982 BIR RULING NO. 192-82 267-b 000-77 192 Davao Light & Power Co., Inc. P.O. Box 65 183 Juan Luna Street Cebu City Attention: Mr . Manuel S . Go Counsel Gentlemen : This refers to your letter dated January 7, 1982 informing this Office that as an electric franchise holder, you intend to sell electric generating, distributing, and conducting systems consisting of generators, poles, wires, watthours, transformers, etc. You now request a ruling whether you are subject only to a franchise tax of 2% in lieu of all taxes for the income or profit that would be derived from said sale. In reply, I have the honor to inform you that the income that you would derive from the said sale of your assets are earnings incidental and necessarily connected with the operation of your franchise (Phil. Power Development Co. vs. Commissioner, CTA Case No. 1152, Oct. 13, 1965); hence, you are subject only to the 2% franchise tax which is in lieu of all taxes [Sec. 267(b), Tax Code]. Consequently, the net income that you would derive from said sale would be exempt from the corporate income tax. cdtech Very truly yours, RUBEN B. ANCHETA Acting Commissioner