2. The plaintiffs' remaining claims are all dismissed.

3. Of the costs of lawsuit, 4/5 are assessed against the Plaintiffs, and the remainder is assessed against the Defendants.

A. Busan Life Insurance Co., Ltd. (hereinafter “instant company”) established on February 22, 198, and changed its trade name to “Korea Life Insurance Co., Ltd.” on January 4, 1993, and transferred its trade name to ELD Fire Marine Co., Ltd. (hereinafter “ELD Fire”) on May 27, 200, and changed its trade name to ELG Life Insurance Co., Ltd. on April 1, 2006.

B. On March 31, 2005, the Plaintiffs and Nonparty 8 and Nonparty 7 transferred the instant company’s shares (hereinafter “instant shares”) to Nonparty 9, Nonparty 10, and Nonparty 11 (hereinafter “transferees”) at ten won per share.

Plaintiff 1, Nonparty 515,491 5,154,910 Plaintiff 412,393,412,123,93,930 Plaintiff 4613,6236,136,230 Nonparty 8412,393,123,930 Plaintiff 5108,066 1,080,660, 660, Nonparty 10871,3678,713,67, 670 Plaintiff 2128,8731,288,730 Nonparty 75,45,462,350 Nonparty 11,53,90,509,539,90,539,00

C. According to Article 63 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 7580, Jul. 13, 2005; hereinafter “former Inheritance Tax and Gift Tax Act”), the Defendants assessed the value of the shares of this case as 2,898 won per share (in addition to 30/100, 9 and 100 won per share), and determined that the Plaintiffs unfairly reduced their tax burden on capital gains in transactions with the specially related parties, the Defendants’ Head of Guro Tax Office imposed capital gains tax of 475,30,330 won (including 185,335,620 won) for 205, 2075, 207, 305, 300 won for 205, 205, 305, 207, 305, 208, 209, 205, 305, 207, 209, 205, 205, 18.

D. The Plaintiffs, who were dissatisfied with the request, filed a request for a trial with the Tax Tribunal on December 9, 201, upon filing an objection on July 25, 2011, but the said request was dismissed on December 17, 2012.

[Reasons for Recognition] Facts without dispute, Gap evidence 2, 10, 14, 15 (including each number; hereinafter the same shall apply), Eul evidence 8 and 9, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) In the case of an adopted person, the issue of whether the adopted person has a special relationship should be determined on the basis of both prices. The Plaintiffs cannot be deemed to have a special relationship since they are in the relationship of Nonparty 9 and Nonparty 10 with Nonparty 8

2) In light of the fact that the instant company had been in a capital erosion from 2001 to 2004; that as of March 31, 2005, the carried-over deficits were at least KRW 170 billion; that the Financial Supervisory Service continued to demand the Plaintiffs to participate in the capital increase; and that Nonparty 11 was not in a special relationship with the Plaintiffs; thus, Nonparty 11 may be deemed as business example for Nonparty 11’s acquisition of the instant shares; thus, it ought to be deemed as constituting a legitimate market price of the instant shares.

3) In light of the fact that at the time of the transfer of the instant shares by the Plaintiffs, there was no business example or transaction example at the time of the transfer of the shares, the instant company was in a capital erosion from 2001 to 2004, and was in a state of capital loss as of March 31, 2005, which was at least KRW 170 billion as of March 31, 2005, and that the Financial Supervisory Service continuously demanded the Plaintiffs to participate in capital increase, the economic rationality is recognized for the Plaintiffs to transfer the instant shares to ten won per share.

4) Since new contract costs do not constitute deferred assets or intangible fixed assets under the Corporate Tax Act as expenses incurred in obtaining new contracts, the new contract costs should be included in total loss when incurred under Article 40(1) of the Corporate Tax Act.

5) The plaintiffs transferred the shares of this case on March 31, 2005, which was the end of the business year 2004 of the company of this case, and the disposition of this case on the premise that the net value of the shares of this case is calculated based on the net value of the shares from 2001 to 2003 business years, as stipulated in Article 56 (1) 1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 18989, Aug. 5, 2005; hereinafter "former Enforcement Decree of the Inheritance Tax and Gift Tax Act") means the business year 2003 business year. Thus, the net value of the shares of this case shall be calculated based on the net value of the shares of this case from 200 to 2004 business year.

6) Article 56(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for the calculation method of net profit and loss, and provides that “if the value is not more than zero won, it shall be zero won.” On the other hand, Article 55(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides the calculation method of net asset value and does not provide the above provision. Thus, the disposition of this case premised on the premise that net asset value is calculated as zero won if it is calculated as incidental (-).

7) The insurance money, the extinctive prescription of which has expired, or the instant company is practically obligated to pay the dormant insurance money to the customer. Therefore, the dormant insurance money should be appropriated as the liability.

B. Relevant statutes

It is as shown in the attached Form.

C. Facts of recognition

1) The relationship between the transferor and transferee of the instant shares is as follows.

A person shall be appointed.

As seen above, “Nonindicted 2, Nonindicted 3, and Nonindicted 4” are children of Nonparty 1, and Nonparty 9 is Nonparty 3, and Nonparty 10 are children of Nonparty 4. Nonparty 2 was adopted as Nonparty 5’s children who are the death relationship of Nonparty 1. Nonparty 2 is Nonparty 2’s children, and Plaintiff 1 is Nonparty 6’s wife, and Nonparty 3, Plaintiff 4, Nonparty 8, and Plaintiff 5 is Nonparty 6’s children.

2) On November 19, 2004, the instant company issued 861,671 new shares in KRW 2,730 per share and KRW 13,247,176 per share on June 22, 2005, respectively.

3) On December 8, 2004, Nonparty 22 transferred 342 shares of the instant company to Nonparty 23, and Nonparty 24 transferred 24,875 shares of the instant company to Nonparty 25, respectively, on December 15, 2004.

4) The shareholders of the instant company prior to the transfer of the instant shares are as follows.

The shares of the voting shareholders listed in the main sentence of this paragraph (%) 10,309,832 36.12, 15,491, 341, 3412, 3931.44 Plaintiffs 4613, 623, 6232.15, 8412, 393.44, 51,855, 769.6.50 Plaintiffs 24,098, 158, 158.36, 76, 160, 160, 21.58 Doz. 4,167, 898, 21.60, 60, 545, 682.0.0

5) The status of shareholders of the instant company following the transfer of the instant shares is as follows.

The shares of the voting shareholders (ju) contained in the main sentence of this paragraph are 10,309,832.36.12, 5876, 336.07 Plaintiffs 23,969, 285 13.90 Nonparty 73,659, 990, 990, 961, 967.22, Nonparty 101, 546, 475.42, May 42, 475, Nonparty 11, 989, 378.97, 4,132, 428, 428, 28, 545, 682, 10.00

6) On April 1, 2008, the transferee transferred all of the instant shares to Korea Financial Branch Co., Ltd. (hereinafter “Korea Financial Holdings”) at KRW 24,700 per share.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 through 8, 10 through 13, Eul evidence 1 through 4, 6 through 11, and the purport of the whole pleadings

D. Determination

1) Determination on the first argument

Article 101 (1) of the former Income Tax Act (amended by Act No. 7528 of May 31, 2005; hereinafter “former Income Tax Act”) provides that “if any act or computation of a resident having a special relation of income is deemed to have reduced unreasonably the tax burden on such income through a transaction with the resident concerned, the head of a district tax office having jurisdiction over the place of tax payment or the director of a regional tax office having jurisdiction over the place of tax payment may calculate the income for the pertinent year regardless of the resident’s act or calculation.” Article 101 (4) of the former Enforcement Decree of the Income Tax Act provides that “the scope of the person having a special relation and other matters necessary for the calculation of unfair acts shall be prescribed by the Presidential Decree.” Article 98 (1) 1 of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 18850 of May 31, 2005; hereinafter “former Enforcement Decree”) provides that “a person having a special relation with the said resident” means a relative within the degree of any paternal relation.

Then, even if the adopted child was adopted without full adoption, the relationship between the adopted child and the adopted child remains as it remains. Thus, in the case of the adopted person, whether the adopted person has a special relationship not only with the injured party but also with the injured party (see Supreme Court Decision 87Nu619, Oct. 11, 1988). Based on the birth price of the non-party 2, the plaintiff 1 is the wife of the non-party 9 and the non-party 10-4 relative relationship between the non-party 9 and the non-party 10-4 relative relationship, the plaintiff 2 is the non-party 9 and the non-party 9-5 relative relationship between the non-party 9, the non-party 3, the plaintiff 4, and the non-party 5 with the non-party 10-party 9 and the non-party 10-party 10 relationship.

2) Determination on the second argument

Article 60(1) of the former Inheritance Tax and Gift Tax Act provides that “The value of the property on which a gift tax is levied under this Act shall be the market value as of the date of donation,” and Article 60(2) of the same Act provides that “The market value under the provisions of paragraph (1) shall be the value which is generally deemed to be established in the event of free transactions between many and unspecified persons and which shall be recognized as the market value under the conditions as prescribed by the Presidential Decree, such as the expropriation and public sale price and appraisal price.” Article 49(1)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “The market value is recognized as the market value under the conditions as prescribed by the Presidential Decree” means the market value where a transaction is made within three months before or after the

In light of the following circumstances: ① the company did not trade the shares before or after March 31, 2005, which are the date of the transfer of the shares; ② the company recorded net income of approximately KRW 7.6 billion in the business year 2003, and KRW 18 billion in the business year 204; ③ the company of this case was 861,671 shares per share on November 19, 204; ② the company of this case was 13,247,176 shares per share, which were transferred to the non-party 1 to the non-party 4 and the non-party 1 to the non-party 1 to the non-party 1 to the non-party 1 to the non-party 1 to the non-party 1 to the non-party 1 to the non-party 4 to the non-party 1 to the non-party 1 to the non-party 2 to the non-party 2 to the non-party 4 to the non-party 2 to the non-party 2 to the non-party 2 to the shares.

3) Judgment on the third argument

Article 101(1) of the former Income Tax Act provides, “If it is deemed that any act or computation of a resident having any transfer income has reduced unreasonably the tax burden on such income through any transaction with the resident concerned, the head of the district tax office having jurisdiction over the place of tax payment or the director of the regional tax office having jurisdiction over the place of tax payment may calculate the amount of income for the relevant

In light of the following circumstances: ① the instant company recorded net income of approximately KRW 7.6 billion in the business year 2003; ② the instant company issued KRW 2,730 per share of KRW 2,771 on November 19, 204; and KRW 13,247,176 per share of KRW 4,180 on June 22, 2005; ③ the transferee, as junior creditors of the instant company, did not prepare a debt-to-equity swap of KRW 4,180 per share of KRW 70 on June 22, 2005; ④ the Plaintiff’s share transfer of KRW 30 on June 22, 2005; ④ the Plaintiff’s share transfer of KRW 4,180 on June 22, 2005; ④ the Plaintiff’s share transfer of KRW 30,300 on June 23, 204.

4) Judgment on the fourth argument

Article 20 of the former Framework Act on National Taxes (amended by Act No. 7582 of Jul. 13, 2005; hereinafter “former Framework Act on National Taxes”) provides that “In investigating and determining the tax base of national taxes, corporate accounting standards or practices which the relevant taxpayer continues to apply and are generally fair and reasonable, shall be respected: Provided, That the same shall not apply to cases where there are special provisions provided in the tax-related Acts.” Article 40(1) of the former Corporate Tax Act (amended by Act No. 7838 of Dec. 31, 2005; hereinafter “former Corporate Tax Act”) provides that “The business year during which gross income and deductible expenses accrue for each business year of a domestic corporation shall be the business year which includes the date on which the relevant gross income and deductible expenses are determined.” Article 43 of the former Framework Act provides that “Where the relevant corporation applies corporate accounting standards which are generally accepted as fair and reasonable in relation to the acquisition and evaluation of gross income and deductible expenses, or continuous application of corporate accounting practices, the relevant provisions or practices shall prevail.”

Article 40 of the former Corporate Tax Act and Articles 68 through 71 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18945, Jul. 15, 2005; hereinafter “former Enforcement Decree of the Corporate Tax Act”) stipulate the time of attribution of profit and loss depending on the transaction types, etc. However, the provisions concerning the time of attribution of profit and loss under the tax law according to such transaction types cannot be deemed to stipulate the time of attribution of profit and loss under the current society by predicting the various types of transactions in the modern society, and it is difficult to determine the scope of attribution of profit and loss under the above provisions. Thus, in a case where it is difficult to determine the attribution of profit and loss under the above provisions, it may determine the attribution of profit and loss by adopting the standards for the accrual of profit and loss under the corporate accounting standards generally accepted as fair and reasonable accounting practice unless it is against the principle of confirmation of profit and loss under the Corporate Tax Act. Such act conforms to the principle of respect of corporate accounting under Article 20 of the former Framework Act [see Supreme Court Decision 92Nu2Nu29363643434

Meanwhile, “new contract costs” in insurance business refers to expenses incurred in acquiring new contracts, which are the amount disbursed as expenses for insurance solicitors’ expense and personnel expenses for places of business. Article 70 of the former Enforcement Decree of the Corporate Tax Act does not separately provide for the period of attribution of new contract costs, and Article 23-6 of the Insurance Business Rule (amended by December 10, 1998), which is the basis of corporate accounting related to insurance business, provides that “project costs shall be treated as expenses upon occurrence of losses: Provided, That this shall not apply to new contract costs corresponding to other assets.” However, the tax authority imposed tax on the premise that the new contract costs should be included in deductible expenses at the time of occurrence of new contract costs. However, in the event that new contract costs are imposed as above, a large amount of civil petitions were not recognized as deductible expenses for the year during which new contract costs were paid (five years) and accordingly, a large number of new contract costs were collected in excess of the period of insurance contracts (amended by Presidential Decree No. 3750, May 27, 2007).

In light of the following: ① insurance business is a business that requires public nature, sociality, and ethics and requires strict compliance with the accounting rules in order to protect policyholders, etc.; ④ The accounting rules of insurance business established under these needs should be respected in the field of insurance business as corporate accounting standards in special areas; ② the corporate tax rules of the Corporate Tax Act are amended to include the new contract costs in deductible expenses in accordance with the provisions of the accounting rules of the insurance business in the calculation of deductible expenses in accordance with the above circumstances; ② accordingly, the tax authorities imposed the new contract costs on the basis of the above provisions as mentioned above. ③ Since May 10, 2003, the company of this case also included the new contract costs in deductible expenses in the calculation of deductible expenses in accordance with the above provisions; ③ there is no special objection raised by the insurance companies including the company of this case; ④ since new contract costs were paid in the year when the new contract costs were concluded, and profits corresponding to the new contract costs were generated in the calculation of deductible expenses in accordance with the payment period of the insurance premiums, it cannot be denied that the new contract costs cannot be included in deductible expenses for the whole period of the Plaintiffs’s.

5) Judgment on the fifth argument

Article 56(1)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 17459 of Dec. 31, 2001) provides that “The amount of net profit and loss for the preceding three years means the amount of net profit and loss from the three years to the three years before the commencement of the inheritance to the one year before the commencement of the inheritance,” but was amended on December 31, 2001 to the effect that “the amount of net profit and loss for the preceding three years means the amount of net profit and loss from the three years to the three years before the base date of appraisal to the one year before the base date of appraisal”.

On the other hand, the following circumstances revealed in addition to the aforementioned evidence and the overall purport of the pleadings, namely, ① the amendment of the Enforcement Decree, the purport of the above amendment is to calculate the net profit and loss value without the need to make a settlement of accounts when the evaluation base date is the end of the business year (see reference materials submitted by the defendant 5), ② the term “transfer” is ordinarily used as the term “before the evaluation base date, including the time when it becomes the base date,” ③ the day prior to one year including March 31, 2005, which is the last day of the business year 2004 of the company of this case, was the first day of April 1, 2004, which is the first day of the business year 204 of the company of this case, ④ In particular, the calculation of the net profit and loss value based on the net profit and loss value of the business year adjacent to the evaluation base date of this case is more consistent with the accuracy of the evaluation of the stocks of this case, and thus, the Plaintiffs’ net profit and loss should not be calculated from the business year of this case.

The Plaintiffs asserts that the Enforcement Decree is used as a concept that does not include when the term “transfer” is based on Article 29(4)(b) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act. In light of the foregoing, Article 29(4) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “The calculation of profits pursuant to the provisions of paragraph (3) of the same Article shall be based on the date of payment of stock price (where a person to whom forfeited shares are allocated before the date of payment of stock price has been issued, referring to the date of issuance thereof).” Thus, even if the concept includes the time when the term “transfer” is interpreted as the term “transfer”, any inconsistency does not occur (limited to the date of issuance of preemptive rights certificates and the date of payment of stock price). Therefore, it cannot be deemed that the Enforcement Decree is used as

6) Determination on the fifth argument

A) Article 55(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 21292, Feb. 4, 2009; hereinafter “amended Enforcement Decree”) provides that “The net asset value under Article 54(2) shall be the value calculated by subtracting liabilities from the value appraised by the assets of the relevant corporation as of the base date of appraisal under Articles 60 through 66 of the Act as of the base date of appraisal; where the net asset value is not more than zero won, it shall be zero won; and Article 3 of the Addenda provides that “The amended provisions of Article 55(1) of the former Enforcement Decree shall apply to the first evaluation of unlisted stocks after this Decree enters into force.”

However, the phrase “the first evaluation of unlisted stocks after the enforcement of this Decree” under Article 3 of the Addenda to the amended Enforcement Decree does not mean “the case where the tax authority has to evaluate unlisted stocks for the purpose of calculating the value of donated stocks after the enforcement of the amended Enforcement Decree,” but rather means “the case where the evaluation base date is after the enforcement of the amended Enforcement Decree,” and “the case where the revised Enforcement Decree is after the enforcement date,” which is before the enforcement date of the amended Enforcement Decree. The Plaintiffs transfer the instant stocks on March 31, 2005, which is before the enforcement date of the amended Enforcement Decree, and thus, the amended Enforcement Decree is not applicable to the assessment of the instant stocks.”

B) Article 54(1) main text of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “The net asset value per share of the stocks and equity shares not listed on the Korea Stock Exchange under Article 63(1)1(c) of the Act shall be the weighted average value of 3 and 2 of the net asset value per share, respectively,” and Article 54(2) of the same Decree provides that “The net asset value per share under paragraph (1) shall be the value assessed by the net asset value of the corporation concerned ± the total number of issued stocks”, and Article 55(1) provides that “The net asset value under Article 60 through 66 of the Act shall be the value calculated by subtracting the liabilities of the corporation concerned, as of the base date of appraisal, from the value assessed under Articles 66 through 66 of the Act.”

On the other hand, the following circumstances revealed by adding the aforementioned evidence and the overall purport of the pleadings, namely, ① Article 56(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for the method of calculating net profit and loss, and Article 55(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for the method of calculating net asset value and does not provide for such method. ② Article 56(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for the method of calculating net asset value, ② Article 56(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for “if net asset value is below zero won, it shall be zero won.” However, the above provision applies only after the enforcement date of the Enforcement Decree of the Inheritance Tax and Gift Tax Act as amended, and it is difficult to view the above provision as an appropriate assessment, and the purport of the amendment is as above, if net asset value is below zero won, as it can not be deemed as a net asset value as an incidental asset value.

7) Determination on the third assertion by Japan

According to Gap evidence No. 17, it is recognized that the Financial Supervisory Service prepared a plan to improve the management of dormant insurance money of an insurance company on March 30, 2005 to the effect that "the duty to notify a customer of the receipt of insurance money three months prior to the expiration of the extinctive prescription, the obligation to pay insurance money is legally extinguished, the policyholder, etc. accounts with reserve adjustment, etc. at the time when it is highly probable that he/she may claim insurance money, and reflects the grounds on which he/she may pay in the

However, even if the company of this case, as alleged by the plaintiffs, paid the dormant insurance money to some customers who claimed for the payment of the dormant insurance money, this is a performance of the obligation not to be legally enforced. Thus, the company of this case set the allowance for the payment of the dormant insurance money within reasonable scope in accordance with the corporate accounting standards or practices, notwithstanding setting the allowance for the payment of the dormant insurance, the whole amount of the insurance money for which the period of extinctive prescription expires and the legal obligation not to pay is extinguished cannot be appropriated as the liabilities (if the company of this case prepared the grounds for the payment of the dormant insurance money to the customer who claimed for the payment of the dormant insurance money, it may be included in the calculation

The plaintiffs asserts that, based on the Supreme Court Decision 2009Du14965 Decided August 17, 2012, Supreme Court Decision 2011Du9157 Decided November 29, 2012, Supreme Court Decision 2011Du9157 Decided October 25, 2012, Supreme Court Decision 2012Du15340 Decided October 25, 2012, the dormant insurance should be included in deductible expenses as well as the dormant deposit. The Supreme Court's ruling invoked by the plaintiffs states that "the bank's deposit of interest in the customer's deposit account constitutes the approval of the obligation and thus it cannot be deemed that the period of extinctive prescription has expired since the bank's deposit in the customer's deposit account constitutes the suspension of the extinctive prescription of the deposit claim, it shall not be deemed that the extinctive prescription has expired as the obligation. Accordingly, the above precedents cannot be deemed as a judgment that can be invoked in this case.

8) Calculation of a reasonable amount of tax

In accordance with the above determination, the value of the shares of this case is 2,418 won per share (3,143 won in the case of non-party 9 and non-party 10). Therefore, on May 4, 201, the part which exceeds 381,42,659 won (including additional tax 148,720,164 won) in the disposition of imposition of capital gains tax for 205, 207, 205, 2075, 2067, 205, 207, 2075, 207, 2075, 207, 205, 207, 205, 205, 306, 205, 207, 205, 207, 205, 306, 205, 205, 207, 2075, 257, 2065, 20615, 25, 207

3. Conclusion

Therefore, the plaintiffs' claims are justified within the scope of the above recognition, and the remaining claims of the plaintiffs are without merit, and all of them are dismissed. It is so decided as per Disposition.

[Attachment]

Judges Ba-hee (Presiding Judge)

1) On April 1, 2006, ELD Fire Marine Insurance Co., Ltd. changed its trade name into ELD M&D Co., Ltd.

Note 2) The roots between the ELA branch group and the NAS Group is both a EL branch group.