BIR Ruling No. 332-61

August 9, 1961 BIR RULING NO. 332-61 The Regional Director B. I. R. Regional District No. 6 Naga City S i r : There is returned herewith the papers bearing on the pending internal revenue case of Mr. Domingo Imperial for violations of the provisions of the Bookkeeping Regulations. prcd It appears from the investigation conducted by your office on the 1958 income tax return of Mr. Imperial that he failed to provide himself with the required books of accounts and to attach the required statement of net worth and operations to said income tax return, in violation of Section 334 of the Tax Code as implemented by Rev. Reg. Nos. V-1 and V-13. In extra-judicial settlement of the violation, the amount of P150, as compromise penalty, was required of Mr. Imperial to be paid. Mr. Imperial claims that he is not subject to the requirements as mentioned above for the reason that he is not engaged in business being only a farmer or property own. The contention of Mr. Imperial is untenable. His act of leasing his commercial building in Tabaco and Legaspi and renting his house in Daraga, Albay, deriving therefrom an income of P13,528.70 in 1958, places him in the category not as a property owner as claimed by him under the Bookkeeping Regulations but as a real estate dealer as defined in Sec. 194 (s) of the Tax Code as amended. Being engaged in business, he is subject to the requirement as stated in Section 3 of Rev. Reg. V-1. Since farmers are not subject to any business tax, farming therefore in any case cannot be considered a business. (BIR Ruling No. 236, S. of 1958.) Such being the case, Mr. Imperial whose income from farming in 1958 was P19,646.17, is subject to the requirement as provided under Sec. 6 of Rev. Reg. No. V-13 as implemented by BIR Ruling No. 128. S. of 1959. Unless he chooses otherwise, however, Mr. Imperial may enter his income from farming in his regular books of accounts or simplified set of bookkeeping records, as the case may be. LLpr Should Mr. Imperial persist in his refusal to settle the violation extra-judicially, corresponding court action should be instituted against him. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue