2. KimB

2. The director of the tax office for male-sea.

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

Cheong-gu Office

Order.1)

A. The CCC Co., Ltd. (hereinafter referred to as “CCC”) was established on November 18, 2004 and listed on the KOSDAQ on January 23, 2008, as a company engaging in electronic device production business, and was listed on the KOSDAQ on January 23, 2008. Plaintiff EA is a shareholder of CCC, a representative director, and Plaintiff KimB as a shareholder of CCC and a director.

B. On April 21, 2009, CCC entered into a sales contract with DD Co., Ltd to purchase the remainder amount of KRW 600,000,000 and the remainder of KRW 5,550,000,000,000 with respect to the land and its ground factories located in EE FG-dong 623-5, GG, and its ground factories (hereinafter collectively referred to as “instant factory real estate”). On May 29, 2009, CCC concluded the sales contract to purchase the remainder amount of KRW 6,150,000.

C. On May 28, 2009, CCC concluded on May 29, 2009 with the resolution of the board of directors on May 29, 2009, the total face value of 4,000,000,000, KKK and the total face value of 4,000,000,000, JJJJ (hereinafter referred to as the “JJJ”) with the total face value of 2,00,00,000,000, 000, 000, 000, 00, 000, 00,000, 00, 00, 00, 00, 000, 00, 00, 00, 00, 00, 00, 00, 00, 00, 00, 00, 00, 00, 00, 00.

D. On May 29, 2009, HH, KKK, and JJJ (hereinafter collectively referred to as “HH, etc.”) transferred an amount equivalent to 60% of the new stocks acquired from the bonds issued by the instant preemptive right to MMM Co., Ltd. (hereinafter referred to as “MMM”), and MMMM transferred the total face value of KRW 3,150,000,000 out of the above new stocks acquired by the Plaintiff to the Plaintiff on the same day, KRW 1,200,000,000 of the face value of the above new stocks acquired by the Plaintiff, and KRW 1,200,000,000 of the face value of the new stocks acquired by the Plaintiff KimB on the same day.

E. On December 20, 201, the Plaintiffs: (a) exercised part of the instant new stocks acquired from MFM at KRW 4,939 per share price (hereinafter “instant new stocks acquisition securities”); and (b) Plaintiff Lee Young-B acquired 556,792 shares for common shares of CCC; and (c) Plaintiff KimB acquired 212,593 shares for common shares of CCC.

F. The Plaintiffs, upon exercising the instant preemptive right, succeed to the former inheritance by acquiring CCC’s common shares.

Under the premise that Article 40(1)2(b) of the Inheritance Tax and Gift Tax Act (amended by Act No. 121130, Dec. 31, 201; hereinafter “former Inheritance Tax and Gift Tax Act”), the Plaintiff reported KRW 3,653,198,575 as the value of donated property, and reported KRW 1,229,939,358 as the value of donated property, and the Plaintiff KimB reported KRW 1,426,62,092 as the value of donated property and paid KRW 369,598,353 as the value of donated property calculated accordingly.

As a result of the tax investigation, the amount of the gift tax on the plaintiff Lee A was reduced by KRW 35,64,531 on January 3, 2013 on the ground that the excessive report was made, which was corrected to KRW 1,194,274,827.

G. On December 13, 2013, Plaintiff KimB filed a request for correction of the reduction of the gift tax for the year 201 as indicated in the above F, with respect to the Defendant-U.S. Tax Office, and on February 10, 2014, the Defendants rejected the Plaintiffs’ request for correction of the said reduction (hereinafter “instant refusal disposition”).

H. The Plaintiffs were dissatisfied with the instant disposition rejecting the correction, and filed a tax appeal on April 15, 2014, but the Tax Tribunal dismissed the said appeal on April 6, 2015.

[Ground of Recognition] Facts without dispute, Gap evidence 1 through 5, Gap evidence 6-1, 2, Gap evidence 7-1, 2, Gap evidence 8-1 through 3, Gap evidence 9-1, 2, Gap evidence 10-1, 2, 10-2, Eul evidence 1 through 3, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The parties' assertion

The plaintiffs issued the instant bonds with warrants to raise funds to purchase the instant factory real estate, and the plaintiffs issued the instant bonds with warrants at the request of a financial institution.

Since the right of subscription was acquired, even if the plaintiffs gained a benefit equivalent to the difference between the share price due to the exercise of the new shares acquisition certificate of this case, it does not constitute the benefit under Article 40 (1) 2 of the former Inheritance Tax and Gift Tax Act, and thus, the refusal disposition of correction of the amount of gift tax, which was based on the above benefit,

As to this, the Defendants, at the issuance of CCC’s instant bonds with warrants, raise the Plaintiffs’ objection.

According to the economic substance of transactions revealed through the revealed circumstances up to the exercise of the new shares subscription certificate, the Plaintiffs’ profit equivalent to the difference between the share price and the exercise of the new shares subscription certificate of this case shall be deemed to constitute the benefit under Article 40(1)2 of the former Inheritance Tax and Gift Tax Act pursuant to Article 2(4) of the former Inheritance Tax and Gift Tax Act. Thus, the disposition rejecting the correction

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Article 2 of the former Inheritance Tax and Gift Tax Act (Article 2(1) of the same Act) includes donated property from another person’s donation

The property shall be subject to gift tax, and in paragraph 3, the property shall be transferred without compensation to another person in a direct or indirect manner, regardless of the name, form, purpose, etc. of the act or transaction.

[including a transfer at a remarkably low price] or a contribution to increase another person's property value. Paragraph 4 of Article 4 provides that "in case where inheritance tax or gift tax is deemed to have been reduced unreasonably by indirect means via a third party, or by means of two or more acts or transactions, it shall be deemed to have been directly traded by the party or by means of a continuous single act or transaction, and Paragraph 3 shall be applied."

Where it is deemed that the gift tax has been unjustly reduced by means of two or more acts or transactions under Article 2 (4) of the former Inheritance Tax and Gift Tax Act, the gift tax shall be reduced by such economic substance

The provision that a gift tax should be imposed by deeming an act or transaction as one of the acts or transactions subject to gift tax is to achieve the effect of gift bypassing or transforming various stages of transactions, but at the same time, to cope with the act of tax avoidance which unfairly reduces gift tax while avoiding the effect of gift, and to be imposed by deeming the transaction as one of the acts or transactions subject to gift tax as one of the acts or transactions subject to gift tax depending on its substance. Accordingly, the purpose of tax equity is to ensure fair taxation by stipulating one of the methods of application of the substance over form principle at the level of gift tax. Meanwhile, the taxpayer may choose one of the various legal relations in order to achieve the same economic purpose at the time of carrying out economic activity, and the tax authority shall respect the legal relationship chosen by the parties (see, e.g., Supreme Court Decision 200Du963, Aug. 21, 201). As such, the outcome after various stages of transactions may intervene not only in compensating for risks, such as losses, but also in external factors or activities.

2) In light of the above legal principles, Gap evidence 11-1 to 3, the previous 1.

In full view of the following circumstances revealed by adding the respective descriptions and the overall purport of the pleadings as stated in the evidence Nos. 12 and 13, it is difficult to conclude that, from the issuance of the instant bonds with warrants by CCC to the acquisition and exercise of the instant new stocks by the Plaintiffs, a series of abnormal and abnormal actions took place from the issuance of the instant bonds with warrants to unjustly avoid or reduce gift tax without any particular business purpose, and its substance is the same as a continuous act or transaction with the difference between market price and acquisition value by allowing the Plaintiffs, who are shareholders of CCC, to acquire new stocks at low price in excess of the share holding ratio, to acquire the new stocks at low price, and thus, it is difficult to conclude that the disposition rejecting the correction of this case is unlawful. Accordingly, by applying Article 2(4) of the former Inheritance Tax and Gift Tax Act, gift tax shall not be imposed on such grounds that it constitutes

A) The CCC had to purchase the instant factory real estate, and it was necessary to raise the purchase fund by May 29, 2009, which was the remainder payment date, but it was required to raise the funds with capital increase with capital increase or long-term loans.

CCC’s financial crisis due to the so-called so-called Sclar crisis that was launched around 2008 was difficult to take place. In fact, it appears that CCC’s proposed investment methods by HHH, etc. to issue the instant bonds with warrants to HH, etc. according to ombudsman. Thus, the issuance of the instant bonds with warrants itself is a transaction for business purpose.

B) HH et al. transferred the instant bonds with respect to the instant bonds with warrants, separated from the acquisition of new stocks in GMM et al., other than MMMM and the acquisition of new stocks that were directly exercised at the end of 2010. Moreover, HH et al. directly exercised part or all of the new stocks acquired from MMM, GMM, GMF Gundo HH et al.

C) The purchase of the instant new shares by the Plaintiffs is subject to the demand of HH, etc., and HH, etc. is a shareholder and management of CCC within the scope of the issue price.

In order for them to guarantee the repayment of bonds with warrants to obtain profits from the sale of new stocks and to gain profits from the sale of bonds with warrants, it has merits that CCC and the plaintiffs can minimize business restrictions while securing short-term funds, such as funds for purchasing factory real estate of this case. In light of this, no particular business purpose other than tax avoidance can be said to exist.

D) The CCC’s share price was KRW 6,180 per share as of May 29, 2009, for which the Plaintiffs acquired the instant new shares acquisition securities, and was based on December 20, 201, when exercising the instant new shares acquisition securities.

The plaintiffs were 19,650 won per share, and the plaintiffs acquired 4,939 won per share, which is the exercise price adjusted by 6,663 won per share, the exercise price of the preemptive right of this case. The exercise price is determined objectively by the method permitted by the Regulations on Issuance, Public Notice, etc. of Securities.

E) Meanwhile, the CCC’s share price per share has repeatedly increased and decreased by holding 4,939 won as the above event price from May 29, 2009 to December 20, 201.

Profit from the acquisition and exercise of new stocks is premised on the premise that the Plaintiffs had been at risk of the price decline due to credit risk, etc. caused by CCC’s poor business activities or customer insolvency. As a result, the share price increase through efforts to raise funds and improve business management due to the issuance of the instant bonds with warrants. There is no ground to deem that the Plaintiffs could have sufficiently predicted CCC’s share price increase at the time of the exercise when acquiring new stocks that the Plaintiffs could exercise only one year after the date of issuance of the instant bonds with warrants.

3. Conclusion

Since the plaintiffs' claims are well-grounded, it is decided as per Disposition by admitting all of them.