The costs of appeal are assessed against the defendant.

In calculating transfer margin which serves as the tax base of transfer income tax, in case where only the actual transaction price acquired by the corporation is confirmed and the actual transaction price transferred to a natural person is not confirmed, the acquisition price shall be based on the actual transaction price pursuant to the proviso of Article 170 (1) of the Enforcement Decree of the Income Tax Act, and the transfer price shall be calculated on the basis of the standard market price under Article 60 of the same Act and Article 115 (1) 1 (c) of the Enforcement Decree of the same Act, and Article 56-5 (5) 2 of the Enforcement Decree of the same Act provide that the transfer price under Article 115 (1) 1 (c) of the Enforcement Decree of the same Act shall be calculated on the basis of the difference between the standard market price at the time of the acquisition and the standard market price at the time of the transfer.

However, according to Articles 80(1)1 and 80-2 of the Enforcement Decree of the Local Tax Act, the standard market price of land shall be determined once a year by the head of a Si/Gun as of the date determined by the Ordinance of the Ministry of Land, Infrastructure and Transport in order to register the land in the land cadastre, forest ledger and tax ledger by setting a grade according to the land category, property level or circumstances as of the date determined by the Ordinance of the Ministry of Land, Infrastructure and Transport, but in cases where the land category, property level or circumstances of the land whose grade has been set significantly changed, the land category, property level or circumstances are similar to the class of the land in question shall be determined by the modified land grade in accordance with the grade of the land similar to that of the land in question. However, according to Article 46-2 of the Enforcement Rule of the same Act, in cases where the land substitution or temporary land substitution is designated by the land substitution and rearrangement project, the head of a Si/Gun shall set the land grade or temporary land substitution and rearrangement project under Article 86-2 of the Enforcement Decree of the Land Readjustment and Rearrangement Projects Act, regardless of the land price determined by the previous land category or temporary zone.

In calculating gains on transfer of the transferred asset of this case, the court below is just in holding that the defendant calculated gains on transfer by considering the transfer value as the transfer value under Article 115 (1) 1 (c) of the Enforcement Decree of the Income Tax Act and the disposal of the transfer income tax of this case is unlawful on the basis of the taxation standard amount at the time of the acquisition determined by the previous land grade price, on the ground that the provisional grade of the transferred asset of this case, which was designated as reserved land under the Land Readjustment and Rearrangement Projects Act, was not set.

We cannot accept the judgment of the court below since it criticizes the judgment of the court below in its independent opinion without properly understanding the reasons of the judgment.

Therefore, the defendant's appeal is dismissed, and the costs of appeal are assessed against the losing defendant. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Jae-sung (Presiding Justice)