2. The costs of appeal shall be borne by the Plaintiff.

(a) The relationship between the parties;

1) The Plaintiff is a KOSDAQ-listed corporation established on September 24, 1984 and run the business of manufacturing and selling wind power generation systems in Scheon-si EE DD 477. FF Co., Ltd. (hereinafter referred to as “FFF”) is an unlisted corporation established on September 2006 and engaged in manufacturing, etc. such as wind power generation lurries and power generators. The Plaintiff, as an investment company to FF, held FFF shares.

2) GG was the largest shareholder of the Plaintiff, HH is the spouse of GG, BB, and CCC.

The children of GG are children. BB was the representative director and the largest shareholder of FF, and FF’s shareholders were composed of GG, HH, BB, CCC, the Plaintiff and the Plaintiff’s former representative director.

(b) A self-rescue plan;

1) The Plaintiff promises to pay goods to KK by June 30, 2010.

In addition to the failure to pay by the due date, there was a difficulty due to liquidity shortage that delayed the settlement of the material price due to the shortage of funds from July 2010 to September 2010.

2) Accordingly, on July 13, 2010, the Plaintiff requested the so-called "small and Medium Enterprise Track Track Back" (Fast-Track) to repay all claims that arrive at around 2010 in order to overcome the managerial crisis due to liquidity shortage.

3) On July 26, 2010, the Korea Development Bank deliberated on the request for the Track Track on July 26, 2010

In all cases, 'the composition and operation of the Track Program Self-Governing Council', 'the postponement of repayment of claims', and 'the examination of an external specialized institution for the possibility of management normalization' was passed, but 'the case of new credit support' was rejected.

4) The Plaintiff, as part of a self-help plan for business normalization on December 17, 2010, includes FF, etc. as part of the plan.

The report on business normalization was submitted to the Korea Development Bank, which includes the sale of unlisted stocks and vessels owned by the plaintiff, and the promotion of the separate sale of the project part.

In addition, on December 21, 2010, the plaintiff requested the Korea Development Bank to extend the Trackor.

(c) Transfer process of stocks;

1) On October 22, 2010, the Plaintiff transferred 120,000 shares of FF owned by himself (hereinafter “instant shares”) to BB and CCC, a person with a special relationship, KRW 60,000 per share of KRW 620,000 per share.

2) On the other hand, BB, CCC, which was a shareholder of FF on June 17, 2009, had the same shareholder at that time.

From LL LL, 36,000 FF shares were acquired at KRW 6,00 per share, and BB and CCC acquired at KRW 72,000 shares of FF shares at KRW 6,00 per share from JJ as of October 25, 201, which was the representative director of the Plaintiff, at KRW 72,000 per share.

3) The FF, on October 31, 201, reduced its capital to KRW 5,000,000 per share, the total number of shares issued 1,800,000 per share of KRW 80 per share.

4) The Plaintiff: (a) on November 10, 201, from CCC on November 10, 201, issued FF shares 136,800

On November 20, 201, from BB on November 20, 201, FF shares 165,600 shares, and from HH on the same day, 57,600 shares of FF shares were acquired from H 11,520 shares each week. Accordingly, the Plaintiff became to hold 100 percent of FF shares.

5) The details of transactions of FF stocks from June 2009 to November 201, 201 are as follows:

The same shall apply.

(d) Details, etc. of gift tax return;

1) On October 25, 2010, BB and CCC (hereinafter “CB”) received 72,000 shares of FF from the JJ as of October 25, 2010, from the Plaintiff’s representative director, on July 20, 2012, the head of Dongdaemun District Tax Office notified the head of Dongdaemun District Tax Office to file a voluntary report on the value of donated property calculated as KRW 12,555 per share as the subject of gift tax based on the low-price transfer of shares between related parties. On August 13, 2012, the value of donated property was calculated as KRW 100,386,00 each, and reported and paid after the deadline for the gift tax.

2) Meanwhile, on November 20, 201, BB and CCC transferred all FF shares to the Plaintiff. For the payment of capital gains tax, it was assessed as KRW 13,006 per share as a result of requesting an accounting firm and a lender accounting firm to assess the net profit and loss per share on FF shares.

E. Denial of wrongful calculation

1) The director of the Seoul Regional Tax Office, on June 21, 2013, conducted a comprehensive audit by the Plaintiff, as the result of the comprehensive audit by the Plaintiff.

BB and CCC: (a) the instant transfer of shares is identified as a low-price transfer of shares to a person with a special relationship; and (b) the Defendant requested the Defendant to correct corporate tax by applying the provision of denial of wrongful calculation under Article 52 of the former Corporate Tax Act (amended by Act No. 10423, Dec. 20, 2010; hereinafter “Corporate Tax Act”).

2) Accordingly, the Defendant against the Plaintiff (Law No. 31 December 31, 2011)

In accordance with the supplementary evaluation method for unlisted stocks under the Inheritance Tax and Gift Tax Act (amended by Act No. 11130, hereinafter "the Inheritance Tax and Gift Tax Act"), 12,55 won per share is calculated as the market price, and 786,600,000 won, which is the difference in the actual transfer value, was corrected and resolved as corporate tax was included in the calculation of earnings.

3) On September 11, 2013, the Defendant disposed of KRW 786,60,000 as other income for BB and CCC on October 14, 2013, following the prior notice procedure of taxation, and issued a notice of change in income amount of KRW 786,60,000 to the Plaintiff (hereinafter “instant disposition”).

4) On December 2, 2013, the Plaintiff filed an appeal seeking the revocation of the instant disposition with the Tax Tribunal.

However, the appeal was dismissed on May 13, 2014.

[Ground of recognition] The facts without dispute, Gap evidence Nos. 1 through 11, Gap evidence Nos. 16 through 22, Gap evidence Nos. 24, 25, Eul evidence Nos. 1 through 4, the ZZ of the first instance trial, the testimony of the JJ of the witness of the court of the first instance, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

On October 22, 2010, the Plaintiff transferred the instant shares to BB and CCC, a person with a special relationship, at KRW 6,000 per share in accordance with the self-help plan based on a managerial crisis. However, BB and CCC already acquired FF-listed stocks at KRW 6,00 per share on June 17, 2009, and the Plaintiff did not allocate any profit to BB and CCC. Thus, the transfer price of the instant shares can be deemed an objective exchange price reflecting economic rationality. Ultimately, since the transfer price of the instant shares is obvious, there is no room for denying the rejection of wrongful calculation under the Corporate Tax Act as long as the transfer price of the instant shares was conducted according to the market price. Accordingly, the instant disposition is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22577, Dec. 30, 2010; hereafter the same shall apply)

Article 88(1)3 of the Corporate Tax Act provides that one of the objects of the rejection of unfair calculation under Article 52(1) of the Corporate Tax Act refers to a case where a corporation transfers assets to a person with a special relationship, such as a stockholder, etc. at a price lower than the market price. In addition, Article 52(2) of the Corporate Tax Act and Article 89 of the Enforcement Decree of the Corporate Tax Act provides that in a situation similar to the relevant transaction, the relevant corporation’s market price is a price generally traded between many and unspecified persons, other than a person with a special relationship, or between a third party, other than a person with a special relationship, in a case where the market price is unclear,

Therefore, the assessment of the value of the transferred property by the supplementary assessment method stipulated in Articles 61 through 65 of the Inheritance Tax and Gift Tax Act is limited to cases where it is difficult to calculate the market value as of the date of transfer of the transferred property, and it is difficult to calculate the market value. According to Article 60(2) of the Inheritance Tax and Gift Tax Act, the tax authority has the burden of proof to the Defendant, who is the tax authority, to the effect that the market value is difficult to calculate. Thus, the market value refers to the value that is ordinarily established when a transaction is made freely between many and unspecified persons, i.e., an objective exchange price formed through a normal transaction. Thus, even if a transaction is made by a transaction precedent, it cannot be deemed that the market value is formed by a normal transaction that properly reflects the objective exchange value of the transferred property, and the value can be calculated according to the supplementary assessment method (see, e.g., Supreme Court Decisions 2004Du2271, May 13, 2004; 96Nu9423, Oct. 29, 199).

2) Based on these legal principles, comprehensively taking account of the aforementioned facts and the evidence adopted and examined by the first instance court and the trial court, BB and the CCC’s acquisition of FF shares from LL on June 17, 2009 cannot be deemed as a transactional example where the market price of the shares in this case can be known, and the price per share of 6,000 won is difficult to reasonably reflect the objective exchange value of the shares in this case, and it seems difficult to calculate the market price of the shares in this case by other means. Therefore, in order to identify the market price of the shares in this case, the determination of denial of wrongful calculation can be made after using the supplementary evaluation method provided for in the Inheritance Tax and Gift Tax Act. Accordingly, the Plaintiff’s assertion contrary thereto is without merit.

① At the time of June 17, 2009, BB and CCC received non-listed stocks issued by FF from LL, a shareholder of FF at the time of transfer of the instant stocks. However, such stock transaction was conducted on or before about one year and four months from the time of transfer of the instant stocks ( October 22, 2010), and was conducted between FF’s shareholders, and its frequency is only once. Accordingly, it is difficult to view that the instant stock transaction was conducted continuously or generally between many and unspecified persons, and that the market price at the time of transfer of the instant stocks is reflected appropriately.

② BB, CCC, etc. from December 2009 to October 2010, the Plaintiff, JJ, and GG

Although the FF shares were transferred to 6,000 won per share, all of them are stock transactions between families and specially related persons, and the transaction value at the time of such transaction alone cannot be deemed as transaction example that is recognized as the market value of the shares of this case.

③ The “market price,” which is the basis of the setting aside of wrongful calculation pursuant to Article 52 of the Corporate Tax Act, means the price applied or deemed as applicable to sound social norms and commercial practices and normal transactions between unrelated parties. The Plaintiff appears to have transferred the instant shares to BB and CCC according to a self-help plan due to a managerial crisis due to liquidity shortage. The Plaintiff’s situation at the time of transfer of shares, the circumstances leading up to the transfer of shares, the details of the transfer, the relationship between the Plaintiff and FF, GG, CCC, BB, and CCC, the Plaintiff, BB, and CCC, without undergoing any objective evaluation procedure, such as the accounting firm’s appraisal of the instant shares at the time of the transaction. Considering that the transfer of the instant shares appears to have determined the sales price of the instant shares on June 17, 2009, the transfer of the instant shares appears to have been made in a situation where it is difficult to expect the parties to exchange in an equal relationship pursuing economic benefits by reflecting objective values, and thus, it is difficult to deem that the price was not reasonable.

④ On October 25, 2010, three days after the date of the transfer of the instant shares, BB and CCC calculated on August 13, 2012, KRW 12,555 per share of the FF issued shares by the JJ and calculated on August 13, 2012 as KRW 10,386,000 per share of the donated shares, and then reported and paid gift tax.

(5) In the case of unlisted stocks, transactions between specially related persons, such as family members or employees, are generally

It is difficult to calculate the market price of the instant shares as the case is most likely to be traded among many and unspecified persons due to the lack of a clear example of the transaction. In addition, in the case of unlisted shares, it is not appropriate to derive the market price by the method of appraisal as it can be calculated differently by the method of appraisal because the assessed value can be calculated differently by the method of appraisal due to the diversification of the valuation of the value. Ultimately, in this case where it cannot be deemed that there is a normal transaction that properly reflects the objective exchange value of the instant shares, it is reasonable to calculate the value according to the method