BIR Ruling No. 530-2017

BUREAU OF INTERNAL RFVENUE REPUBLIG OL THE PHILIPPINES DEPARTMENI OF FINANGE

Quezon City

Section 24(D)(1). !88 and t96 of the Tax Code, as amended BIR Ruling No. 633-12 130-2017 11-17-2017

Cebu City 38 Lincoln Street ATTY.GIRLIE A. YOUNG

Dear Atty. Young.

Camingao, Plaintiffs, versus Sps. Panfilo Heludo and Teresita Heludo, Defendants " documcntary stamp tax (DST) on the reconveyance of three (3) parcels of land in favor of' your clients by vintue of a Decision rendered by the Regional Trial Court of Cebu. 7th Judicial Region. Ernesto and Thelma Camingao for exemption from the payment of capital gains tax (CGT) and Branch 8. Cebu City. in Civil Case No. This refers to your fetter dated October 25, 2013. requesting on behalf of your clients. Sps entitled "Sps. Ernesto Caminguo and Thelma

The facts as culled from the records are as foitows:

Heludo; and that soon thereafier, an Ejectment case was filed against them to vacate the premises. spouses and their signatures had been forged; that new Transfer Certificates of T'itle, to wit: TCT by the defendants-spouses Panfilo and Teresita Heludo: that upon verification by the plaintiffs- spouscs, they came to know for the first time that their properties had been sold to the defendants- Nos. of Cebu: that they have been in the possession of the said lots since the time they purchased the saine until they were informed by their caretaker on August 16, 1996. that they were to be ejected Deeds of the Province of Cebu and all are situated in Poblacion. Municipality of Carcar, Provincc executed is without their participation and involvement; that the plaintiffs-spouses owned three Certificates of Title Nos. complaint for Annulment of the Deed of Sale over three (3) parcels of tand owned by them allegcdly executed in favor of defendants-spouses Panfilo and Teresita Hleludo since their signatures appearing in the said Deed of Sale are forgeries and the Deed of Sale prepared and (3) parcels of land which are Lot Nos. Documents disclosed that the plaintiffs-spouses Ernesto and Thelma Camingao filed a and were issued to the defendants-spouses Panfito and Teresita and and respectively, issued by thc Registry of , and covered by Transfer

the thrce (3) parcels of land be reconveyed back to them as the true and legitimate landowners thereof. parcels of land through a forged Deed of Sale; that their Title thereto must be annulled: and that Plaintiffs-spouses further averred that the defendants-spouses have acquired the subiect

530-20 17

SPOUSES ERNESTO & THELMA CAMINGAO Page 2 of 2 (Reconveyance) 11-172017

The Regional Trial Court rendered its Decision dated-5th day of August, 2003. at Cebu City in favor of the plaintiffs-spouses as the real owners of the properties in dispute of which the pertinent dispositive portion of the said Decision reads:

in favor of the plaintiff and against the defendants. Judgment is hereby rendered: "In view of the foregoing. the Court finds that a preponderance of evidence exists

I. Ordering that the forged Deed of Sale over the three (3) parcels of land 2 Ordering the defendant-spouses Heludo to reconvey the three (3) parcels (Exhibit D) dated 19 February 1996, allegedly executed by plaintiffs in favor of the defendants be annulled;

of land subject of the Deed of Sale (Exhibit D) to plaintiff-spouses;

Ordering the defendants solidarily to pay plaintiffs:

a.) Moral damages in the amount of One Hundred Thousand Pesos

b.) Exemplary damages in the amount of Fifty Thousand Pesos d.) Litigation expenses in the amount of Twenty Thousand Pesos c.) Attorney's fees in the amount of Forty Thousand Pesos

The above-stated Decision of the Regional Trial Court of Cebu. 7th Judicial Region, Branch VIlI, Cebu City, became final and executory on the 3oh day of September 2003 and a Certificate of Finality was issued on the 5th day of August, 2013.

In reply. please be informed that since the reconveyance of the subject properties was pursuant to the Order of the Regional Trial Court and without any monetary consideration and that said reconveyance was in order to return thc properties covered by Lot Nos. 398-B-5, 398-B-6 and 398-B-7 to the legal owner, the transfer of the subject properties in favor of the piaintiffs-spouses is not subject to the capital gains tax imposed under Section 24(D)(1) of the Tax Code of 1997, as amended. Likewise, the

same Code. (BIR Ruling No. 633-12 dated November 26, 2012) Deed of Reconveyance is not subject to the documentary stamp tax (DST) imposed under Section 196 of the Tax Code of i997 but only to the DST imposed under Sec. 188 of the

However. if upon investigation, it will be disciosed that the facts are different. then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented.

Very truly yours. awww CAESAR R. DULAY

(Reconveyance) K-1VDPM14 Spouses Ernesto & Thetma Camingao Commissioner of internal Revenue 011193