2. The costs of lawsuit are assessed against the plaintiffs.

A. The Plaintiffs, established around July 15, 2004, as the shareholders of Latti Co., Ltd. (hereinafter “Datti”), “Insurance Agents”, transferred the shares of Latti Co., Ltd. (hereinafter “instant shares”) owned by the Plaintiffs at KRW 750,000 per share, 150 times per share (5,00 won per share) to Latti Co., Ltd. (the previous trade name was changed to Latcop. (the former trade name was changed to Patcop.; hereinafter “Latf”) on March 13, 2006.

B. From January 29, 2010 to March 15, 2010, the director of the Seoul Regional Tax Office conducted a tax investigation with respect to the suspicion that the plaintiffs transferred the shares of this case to PPP, and then deemed that the plaintiffs received profits from PPP from PP due to the high-priced transfer of shares. As to whether the price of the shares of this case and the legitimate reason for the transaction practice are recognized, the market price of the shares of this case shall be calculated as 14,676 won per share (16,877 won per share in the case of major shareholders who are not the plaintiffs) based on the supplementary assessment method under the Inheritance Tax and Gift Tax Act (hereinafter the Inheritance Tax and Gift Tax Act), and the profits received by the major shareholders, such as non-party 1, etc., included the difference between the price and the market price in the gross income pursuant to Article 52 of the Corporate Tax Act, and the amount equivalent to the difference between the disposal of the shares of this case to PPPP, and the profits that the plaintiffs received from PPPP are not related.

C. Accordingly, on July 1, 2010, the Defendants determined gift tax on the donation of March 13, 2006 to the Plaintiffs as follows, and imposed and notified each of the gift tax (including additional tax) for the year 2006 in the separate disposition list as indicated in the “tax amount imposed” column in the separate disposition list No. 1 (hereinafter “each of the instant dispositions”).

(unit:,000 won)

본문내 포함된 표 구 분 주식수 ⓐ대가 ⓑ시가 분여이익(ⓐ-ⓑ-3억 원) 증여세 비 고 원고 1 2,000 1,500,000 29,352 1,170,648 501,229 비특수관계 원고 2 1,000 750,000 14,676 435,324 125,307 〃 원고 3 1,000 750,000 14,676 435,324 125,307 〃 원고 4 800 600,000 11,740 288,259 77,482 ？ 원고 5 500 375,000 7,338 67,662 11,002 〃 계 5,300 3,975,000 77,782 2,397,217 840,327 〃

D. The Plaintiffs appealed and filed an appeal with the Tax Tribunal on September 28, 2010, respectively, but was dismissed on December 22, 2010.

[Ground of recognition] Gap evidence Nos. 1, 2, and 7 1 to 5, Eul evidence Nos. 3-1 to 5, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

1) The plaintiffs and polybols do not have a special relationship, and they are in an equal relationship pursuing maximize their respective economic interests, and they are engaged in free trade under their respective judgments. Thus, even though the price at which the plaintiffs transferred the shares of this case, KRW 750,00 per share, and KRW 614,928 per share, at least the price assessed as appropriate in a criminal judgment, falls under the market price due to trade practice, the defendants erred by assessing the price of the shares of this case in accordance with the supplementary evaluation methods under the Inheritance and Gift Tax Act.

2) In addition, Article 2(2) of the Inheritance Tax and Gift Tax Act declares the principle of income tax priority by prescribing that gift tax shall not be imposed in cases where income tax is imposed on a donee for donated property. Thus, even if the Plaintiffs’ shares are transferred at a high price, if income derived from such transfer is subject to capital gains tax, gift tax can only be imposed, and no gift tax may be imposed.

(b) Related statutes;

Attached Form 2 shall be as listed in attached Table 2.

(c) Fact of recognition;

1) The process of a change in the shares of DNA;

A) Around July 15, 2004, Nonparty 1 established DNA as a capital of KRW 50,000. Nonparty 1, the representative director of Nonparty 1, who was the representative director, was allocated 50% shares of KRW 10,000, KRW 334 shares of Nonparty 5, KRW 334 shares of KRW 1,000, KRW 333 shares of Nonparty 3 and KRW 4 of Nonparty 4, respectively.

B) Thereafter, on December 26, 2005, Plaintiff 5 acquired 666 additional shares from Nonparty 3 and 4 (total 1,000 shares). Plaintiff 3 acquired 1,00 shares from Nonparty 2 on December 26, 2005, and Nonparty 1 acquired 2,700 shares from Plaintiff 5 and 4 on January 9, 2006 among their shares ( Nonparty 1 acquired 50 shares from Plaintiff 5 and 2,200 shares from Plaintiff 4, and it acquired 200 shares from Plaintiff 5 and 4 in the name of Nonparty 5. At the time of transfer of each of the above shares to Nonparty 1 on January 9, 2006, the transfer value was merely the amount reported by the above Plaintiffs as transfer value of securities transaction tax and the amount reported as transfer value at the time of report by Nonparty 1 as transfer value at the time of report by the above Plaintiffs to Nonparty 1, 500 won per share.

C) On January 13, 2006, DNA increased its capital by KRW 50 million. Of the 10,000 shares issued with capital increase, Nonparty 1 was allocated to Nonparty 1 2,00 shares, Nonparty 6’s 5,00 shares, Plaintiff 1’s 2,00 shares, and Plaintiff 2 were allocated each.

D) On March 13, 2006, shareholders, including the Plaintiffs, transferred the entire amount of their shares owned to polysphere to 750,000 won per share, thereby realizing profit margins near 150 times the face value.

2) From January 18, 2006 to March 7, 2006, Nonparty 1 purchased 7.54% of the shares of polybiology through LbB Code managed by himself and Nonparty 6, a de facto related party, and acquired management rights as the largest shareholder, and held office as the representative director of polybiology through a temporary general meeting of shareholders on March 7, 2006.

3) Around January 2006, at the time of purchase of polybinal shares, Nonparty 1 had already planned to take over dibin who had been a major shareholder and a representative director through polybinal vision. Around March 9, 2006, after securing the management right of polybinal shares, Nonparty 1 requested a certified public accountant belonging to Nonparty 7 accounting corporation to assess the value of shares for purchasing dibinal shares on March 9, 2006.

4) From March 9, 2006 to March 12, 2006, Nonparty 8 assessed the value of DNA stocks on the basis of the accounting data and business plan received from Plaintiff 5. At the time of assessing the value of DNA’s stocks, Nonparty 8 did not seek opinions related to the company of the same kind and industry or those engaged in the same industry as that of the same industry, or received materials from DNA at the site of DNA. Nonparty 8 did not specifically ask its employees for business, financial status, business plan, etc. before completing the appraisal of DNA’s stocks. Nonparty 1 assessed the value of stocks acquired on March 9, 2006 to KRW 750,000, and did not consider only the average value of securities sold at a cost rate of 80,000 per share without considering only the average value of securities sold at a cost rate of 750,000 per share (the average value of securities sold at a cost rate of 80,000 per share).

5) Nonparty 1 set the purchase price of KRW 750,00 per share which was already determined on the basis of the above calculation basis, and during that process, Nonparty 1 did not examine the necessity for acquiring DNA shares or the appropriateness of the above appraised value from the standpoint of polybiology, and did not hold a board of directors or hold a debate among the executives on the purchase agenda at any time.

6) Shares of DNA 15 billion won acquired in polybates were treated as losses and losses for about 9.1 billion won in 8 months and 1 year thereafter, the value of the shares was assessed as zero won and treated as full loss.

7) The prosecutor judged that the act of Nonparty 1’s having the associates purchase of DNA stocks at a high price constitutes occupational breach of trust, and prosecuted Nonparty 1 as the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of trust), and the Seoul Central District Court (Seoul Central District Court, June 4, 2009) declared that on the judgment of June 4, 2009, DNA transferred the stock price of KRW 75,000 per share (the amount assessed by Nonparty 1 as at January 11, 2006 on the basis that it transferred KRW 8,000 per share to Nonparty 6) for the repayment of the debt amounting to KRW 60,00 per share (the transaction is not found in the statement of stock fluctuation; it is not found in the statement of stock fluctuation) that Nonparty 1 caused property damage equivalent to KRW 13.5 billion per annum.

8) On December 11, 2009, the appellate court (Seoul High Court No. 2009No1531) declared that, in light of the prosecutor’s application for change of indictment on November 18, 2009, the price of the shares was not more than KRW 614,928, which was calculated in accordance with the method of appraisal in accordance with the securities provision, Nonparty 1 suffered property damage equivalent to at least KRW 2.7 billion with respect to polybol, and the appellate court dismissed the appeal by the Supreme Court (No. 2010Do369) on May 27, 2010.

9) In the event that the shares of this case are assessed in accordance with the supplementary assessment methods stipulated in Article 63(1)1(c) of the Inheritance and Gift Tax Act, Dti is a corporation under three years after the commencement of the business as of the base date of appraisal, which is not permitted to assess the shares in consideration of the net profit and loss value under the Inheritance and Gift Tax Act. Accordingly, the price per share calculated as of February 28, 2006 nearest the date on which the plaintiffs actually transferred the shares of this case is 14,676 won (in the investigation report prepared by the Seoul Central District Prosecutors' Office, the price per share of Dti calculated under the Net Asset Value Act is 25,003 won, but this is the amount assessed as of December 31, 2005, before Dti increases its capital at a price of KRW 50,000 for the capital on January 13, 206).

[Ground of recognition] Items 3 through 6, 8, Eul evidence 1, 2, Eul evidence 5-1, 5-3, the purport of the whole pleadings

D. Determination

1) Whether the plaintiffs' transfer of the shares of this case to polysphere constitutes "the transfer of property at a price significantly higher than the market price without justifiable grounds in light of transaction practices"

A) Whether the transfer price of the plaintiffs' shares can be recognized as the market price

According to the provision of Article 60 of the Inheritance and Gift Tax Act, the calculation of the value of donated property according to the supplementary evaluation methods stipulated in Articles 61 through 65 of the same Act shall be limited to cases where it is difficult to calculate the market price as of the date of donation of donated property, and to compute the market price is difficult. According to Article 60(2) of the Inheritance and Gift Tax Act, the tax authority bears the burden of proof for the defendants, who are the defendants to bear the burden of proving that it is difficult to calculate the market price. The market price refers to the price formed through a normal transaction, i.e., an objective exchange price formed through a normal transaction where a free transaction is made between many and unspecified persons. Thus, even if there is a transaction example, it cannot be deemed that the transaction price is formed by a normal transaction that properly reflects the objective exchange value of donated property, and if the gift is non-listed stocks (see Supreme Court Decision 2004Du2271, May

As to the instant case, since the instant shares are unlisted stocks, it cannot be deemed that free trade occurs between many and unspecified persons, barring any special circumstance. However, the following circumstances acknowledged by the facts and the purport of the entire pleadings, namely, Nonparty 1, who has controled DB and DBB, attempted to acquire DB stocks at a high-priced price he thought, after acquiring DB’s management right, and otherwise, provided accurate and objective accounting data to a reliable accounting corporation and did not make efforts to assess the appropriate value of DB, or to determine a legitimate purchase price through price negotiations with DB’s shareholders. In light of the above, it appears that the instant shares transaction was conducted in a situation where it is difficult to expect a transaction by reflecting an objective exchange value in an equal relationship pursuing economic profit maximize between the parties. Nonparty 1 appears to have formally requested the appraisal of shares at 750,000 won per share, and it is difficult to recognize that Nonparty 1 traded shares at the market price per 50 won per share, which appears to be the market price per the Plaintiffs’ price per 16th of the instant shares.

B) Whether the price recognized as the basis for calculating the amount of breach of trust in a criminal trial can be deemed as the market price

Article 49(1)2 of the Enforcement Decree of the Inheritance and Gift Tax Act explicitly excludes the appraisal value of non-listed stocks from the value recognized as the market price pursuant to the latter part of Article 60(2) of the Inheritance and Gift Tax Act. The purport of the appraisal method for non-listed stocks is to unify the supplementary assessment method prescribed by the Enforcement Decree of the Inheritance and Gift Tax Act in order to prevent the occurrence of a result contrary to the principle of fair taxation by calculating various appraisal values according to the different appraisal method for non-listed stocks. In the case of non-listed stocks, the appraisal value for non-listed stocks cannot be deemed as the market price under Article 60(2) of the Inheritance and Gift Tax Act, unless there are special circumstances (see Supreme Court Decision 2008Du1849, May 13, 2011).

In this case, the Seoul High Court sentenced that the non-party 1 suffered a property loss equivalent to at least 2.7 billion won with respect to polybibibibibibients under the judgment that DNA price was at least 6.14,928 won. However, as seen above, the court found the non-party 1 guilty of the charge of occupational breach of trust with respect to the acquisition of high-priced stocks in a criminal trial against the non-party 1, i.e., the following circumstances acknowledged by the entire purport of the pleading, and even if the value of stocks is calculated in accordance with the appraisal methods or standards, it is necessary to examine the most reasonable method or standards to determine specifically the amount calculated in accordance with the Inheritance Tax and Gift Act; the price calculated in accordance with the actual transaction method with the non-party 6 and the non-party 5; the price calculated in accordance with the appraisal method under the Securities and Exchange Act; and the price calculated in accordance with the average appraisal method and the average appraisal price peribibibiiiiiiiiiiiiiiiiiiiiiiient price perient to the value of the stock.

C) In conclusion, since both the transfer price of the instant shares and the price adopted to calculate the amount of breach of trust in a criminal trial that the Plaintiffs asserted as the market price do not constitute the market price, the instant shares constitute cases where it is difficult to calculate the market price, and KRW 14,676 per share assessed by supplementary evaluation methods under the Inheritance and Gift Tax Act is the market price of the instant shares.

Furthermore, the market price of the instant shares (14,676 won per share) at the trading price (750,000 won per share) transferred by the Plaintiffs differs by not less than 30/100 of the market price. In full view of the transaction details of the instant shares, the process of determining the transaction price, etc. as seen earlier, the transfer of the instant shares by the Plaintiffs to the polybibibibibibibiiiiiiient, without justifiable grounds, constitutes a case where the assets

2) Whether the income tax priority principle is violated

Since gift tax and transfer income tax vary between the requirements, timing, and taxpayers for the establishment of tax liability and each taxation disposition are to be made independently in accordance with the substance of each taxation requirement, and if both tax requirements are satisfied, only one taxation can be made unless there is a special provision excluding double application. Even if income tax is imposed on a donee under the Income Tax Act on donated property under Article 2(2) of the Inheritance Tax and Gift Tax Act, it does not fall under any special provision excluding double application (see Supreme Court Decision 203Du1575, Dec. 10, 2004). In light of the language and text, the gift tax and the gift tax have the nature of as a supplement tax on the income tax, in a case where gift tax is imposed on a donee, it does not fall under any special provision excluding double application of transfer income tax and gift tax (see Supreme Court Decision 2003Du1575, Dec. 10, 2004).

In this case, according to Gap evidence Nos. 7-1 through 5, it can be acknowledged that the head of the tax office, the head of the military tax office, the head of the tax office, and the head of the tax office respectively calculates and imposes capital gains tax on the plaintiff 1, 2, and 4 who has reported capital gains tax on the transfer of the shares of this case based on the gains from transfer calculated on the actual transfer value. After that, since the plaintiffs transferred the shares of this case to polybibibibibibibiiiiiiibiiiiiiiiiiiiiiiiiiiencienciation by 30% or more of the appraised value at the time of transfer of the shares of this case, the above difference portion is donated as the gift value, each gift tax is deemed as the transfer value, and the above appraised value cannot be deemed as the transfer value at each tax office having jurisdiction over the above market value, and the above taxation of capital gains tax cannot be deemed as the transfer value at the time of transfer by the revised tax law No. 2831 of this case.25.

3) Accordingly, each of the instant dispositions is lawful.

3. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment]

Judge Oi- (Presiding Judge) and Lee Jae-in