The case is remanded to Seoul High Court.

1. On September 12, 1979, the court below acknowledged that the plaintiff acquired a portion of the land from the non-party 1 in Nam-gu Incheon Metropolitan City (the address omitted) and transferred it to the non-party 2 on April 18, 1989. The defendant assessed capital gains tax and defense tax calculated by assessing the transfer value and acquisition value of the land of this case according to the standard market price and assessed the transfer value of the land of this case on May 1, 1990. On the land of this case, the court below rejected the plaintiff's transfer of the land of this case to the non-party 1 for two years after newly constructing a house and living together with his family around March 1980. Since the plaintiff did not have been subject to the implementation of the urban planning project of Incheon Metropolitan City and Incheon Metropolitan City, the plaintiff did not have any economic reason to construct a new house, and later, the plaintiff did not have a new house on the land of this case to which the land of this case belongs to the non-party 3 or more neighboring land of this case.

In other words, in light of the purport of Article 5 subparagraph 6 (i) of the Income Tax Act and Article 15 (1) of the Enforcement Decree of the same Act, it is reasonable to view that the transferred land should be the land on which the house was constructed at the time of the transfer in order to be exempted from capital gains tax, and if the land is a site where the house was constructed at the time of the transfer in order to be exempted from capital gains tax. However, since the land of this case transferred by the plaintiff was newly constructed at the time of the transfer in March 1980 and was removed around November 1982, it cannot be deemed that the transfer of the land of this case can not be deemed the transfer of the land of this case as the land annexed to one household. Furthermore, even in the above circumstances asserted by the plaintiff, it cannot be deemed that the transfer of the land of this case where the house was not constructed can not be deemed as the transfer of the land annexed to one household under the above Act or that it can be said as the same.

2. According to subparagraph 6 (i) of Article 5 of the Income Tax Act, one house for one household as prescribed by the Presidential Decree and its appurtenant land shall not be imposed income tax on the income accruing from a transfer of the land within the area calculated by multiplying the area of the land on which the building is constructed by the ratio as determined by the Presidential Decree by region. According to Article 15 (1) 1 and 2 of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 12767 of Aug. 1, 1989), the term “one house for one household” in subparagraph 6 (i) of Article 5 of the Act means one house for one household and its spouse together with their family members living at the same address or same place of residence for three years or longer. According to Article 5 (1) 6 (i) of the former Enforcement Decree of the Income Tax Act which applies to this case, the term “one house for one household” means one house which is newly constructed and transferred within the urban planning zone for one year or more from the date on which the previous house is removed under the Urban Planning Act.

If the contents of the relevant laws and regulations are as above, it is like the judgment of the court below that income accruing from the transfer of land attached to "one house for one household" should be settled on the land before the transfer to be a non-taxable income, but if the previous house is transferred to be left on the site as a result of the removal of the previous house due to the implementation of an urban planning project, at least as long as the previous house meets the non-taxation requirements as "one house for one household" under Article 5 subparagraph 6 (i) of the Act at the time of the removal of the previous house, it shall be interpreted that the land is not the land attached to "one house for one household", and thus it shall not be subject to income tax on the income accruing from the transfer, on the ground that the land is transferred to the state of the site, is not the land attached to "one house for one household" under Article 18 (1) of the Framework Act on National Taxes. It conforms with the criteria for the interpretation and application of the relevant tax law.

Therefore, as alleged by the plaintiff in this case, the previous house on the land of this case was newly built by the plaintiff, and thus, it had already satisfied the non-taxation requirement of "one house for one household" without being subject to the restriction on the residing period pursuant to Article 15 (1) 1 of the Enforcement Decree of the Income Tax Act. However, as a result of the removal of the above house due to the implementation of an urban planning project, the plaintiff owned the land of this case and transferred it to the plaintiff. If the plaintiff and his spouse did not own another house in Korea with the family members living together with the same address or same place of residence, the income tax shall not be imposed on the income accruing from the transfer of the land of this case.

Nevertheless, the court below rejected the plaintiff's assertion and ruled that the taxation disposition in this case was legitimate solely on the ground that the land in this case was transferred in the state of site. Thus, the court below did not err by misapprehending the legal principles on non-taxation requirements for "one house per household", and it is obvious that such illegality has affected the conclusion of the judgment, and therefore, there is a reason to point this out.

3. Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yoon Jae-ho (Presiding Justice)