BIR Ruling No. 297-82

November 23, 1982 BIR RULING NO. 297-82 34-h 00-000 297-82 Philippine Rural Development Project Irrigation Component National Irrigation Administration Sta. Cruz, Occidental Mindoro Attention: Mr . Wenceslao L . Ginool Chief, CIS Division Gentlemen : This refers to your letter dated June 15, 1982 requesting exemption of the land title holders falling under the provision of Section 112 of the Public Land Act, as amended by Presidential Decree 635 from the final schedule capital gains tax prescribed by Section 34(h) of the Tax Code as amended by Batas Pambansa Blg. 37. It is represented that the National Irrigation Administration (NIA) acquired for from lands considered as homestead lands for irrigation facilities meet the provision of Section 112 of the Public Land Act 141 as amended by Presidential Decree 635, that it entered into a canal right of way agreement with the landowners/homesteaders stipulating, among others, that in the area occupied by the irrigation network is no longer needed by the NIA, the possession of such area shall revert to the landowner, and that the title holders did not receive any consideration for the said acquisition. In reply, please be informed that since no capital gain was derived by the landowners/homesteaders in the aforesaid transfer, they are not, subject to the capital gains tax prescribed by Section 34(h) of the Tax Code as amended by Batas Pambansa Blg. 37. cdta Very truly yours, RUBEN B. ANCHETA Acting Commissioner