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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 253,328,540 for the Plaintiff on August 1, 2012 shall be revoked.

A. On February 9, 2002, the Plaintiff acquired Diplomatic Co., Ltd. (hereinafter referred to as "Diplomatic Co., Ltd.") 103, 104, and 105 (hereinafter referred to as "the above three buildings") from CE (hereinafter referred to as "transferor") on the same day from 106, 107, 108, 109 (hereinafter referred to as "the above 4 buildings") and transferred Nos. 106, 107, 108, 109 (hereinafter referred to as "the above 1 buildings and 2 buildings to FF on June 12, 2008, No. 10 D Co. 10, 106, 108, 10D Co., Ltd. (hereinafter referred to as "the building of this case") to 30D No. 10, 109, 10D No. 168, 10DA and 209.

B. The Plaintiff, on August 31, 2008, filed a preliminary return on transfer income tax for the year 2008 with the acquisition value of the building No. 1 in this case as KRW 700 million and the acquisition value of the building No. 2 in this case as KRW 80 million, but CCC, the transferor of the building No. 1 in this case, reported the transfer value of the building No. 24,520,000, and EE, the transferor of the building No. 2 in this case, as KRW 268,520,00, respectively.

C. From October 5, 2009 to November 14, 2009, the Defendant conducted the Plaintiff’s tax investigation into capital gains tax, and decided that the Plaintiff’s report of acquisition value of the instant building is justifiable. On September 28, 2010, the Defendant notified the Plaintiff of the results of the tax investigation, and notified the Plaintiff of the data on taxation that the transfer value reported by the transferor is different from the actual transaction value. On September 29, 2010, the LL director and the head of the MM director notified the transferor of the correction and notification of capital gains tax to the transferor.

D. On September 201, the transferor filed an objection with the director of the LL Tax Office and the director of the NM Tax Office and the director of the NM Tax Office, and the director of the LL Tax Office and the director of the MM Tax Office conducted a reinvestigation on the actual transaction price of the building of this case, and conducted a reinvestigation on the actual transaction price of the building of this case, and the transfer price reported by the Plaintiff and the transferor is not clear whether it is the actual transfer price. Since the reported transfer price is considerably different compared to the similar transaction price, it cannot be viewed as the transfer price, and thus, the sale price (30 million won for the building of this case, and 40 million won for the building of this case) was approved by the head of the Dongjak-gu Seoul Metropolitan Government at the time of registration of transfer of ownership as the actual transfer price, and notified the transferor of the re-revision

E. On April 1, 2012, the Defendant notified 161,242,804 won, subtracting 6,411,874 won paid by the Plaintiff from the transfer income tax for the year 2008, which was corrected and resolved by taking the acquisition value of the instant building as KRW 337,940,229, the sales price of the instant building was KRW 167,654,678, and notified 170,285,551 won, which was corrected and resolved by taking the acquisition value of the instant building as KRW 337,940,229, the sales price of the instant building was KRW 167,654,678 as the sales price under the approval agreement.

F. The Plaintiff dissatisfied with the instant disposition and filed an objection on April 27, 2012, but was dismissed on August 22, 2013, and the Tax Tribunal filed an appeal with the Tax Tribunal on November 27, 2013, and the Tax Tribunal decided to conduct a reinvestigation on June 16, 2015. Accordingly, the Defendant conducted a reinvestigation to calculate capital gains tax by calculating the conversion price as the Plaintiff’s transfer income tax on the grounds that there are no books, sales contracts, receipts, and other evidential documents necessary to verify the actual transaction price or lack important parts, and made a correction decision to reduce capital gains tax to KRW 78,19,815 from the transfer income tax reverted to the year 2008 (hereinafter “instant disposition”). On November 11, 2015, the Plaintiff notified the Plaintiff of this portion (hereinafter “Defendant’s disposition”).

[Reasons for Recognition] The entry of Gap evidence Nos. 1 through 8, Eul evidence Nos. 1 through 6 (including branch numbers), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Defendant conducted a tax investigation of capital gains tax on the Plaintiff from October 15, 2009 to November 4, 2009 and recognized that the preliminary return of capital gains tax on the instant building that the Plaintiff originally reported was justifiable. The instant disposition, which was made by applying the conversion price without specific evidence following it, violates the substance over form principle, the principle of good faith and sincerity, the principle of basis taxation, and the principle of prohibition of abuse of tax investigation authority, and is unlawful.

2) At the time of filing a transfer income tax return, the Defendant: (a) deemed that the Plaintiff’s sales contract at the time of filing a transfer income tax constituted a case where the actual acquisition value is unclear; and (b) calculated the acquisition value as an conversion value, not the actual transaction value; and (c) accordingly, rendered the instant disposition. However, the said sales contract was actually prepared between the Plaintiff and the transferor, and thus

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Whether the instant disposition violates the substance over form principle, the principle of good faith and sincerity, the principle of basis taxation, and the principle of prohibition of abuse of tax authority

Article 114 (2) of the former Income Tax Act (amended by Act No. 9270 of Dec. 26, 2008) provides that if any omission or error occurs in the details of a preliminary return on a tax base of transfer income, the tax base and the amount of tax shall be corrected. Paragraph (3) of the same Article provides that the head of a 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 or the director of a regional tax office having jurisdiction over the place of tax payment shall immediately correct such error or error after determining or correcting the tax base of transfer income and the amount of tax. In addition, Article 81-4 (2) of the former Framework Act on National Taxes (amended by Act No. 9259 of Dec. 26, 2008) provides that if there is clear evidence to acknowledge a suspicion of tax evasion (Article 9270 of the same Act) and an investigation on the other party to tax payment, imposing transfer income tax on the same real estate becomes legitimate benefit for only one taxpayer, which is determined by the Plaintiff’s or the amount of tax return.

Therefore, the disposition of this case is not illegal because it violates the substance over form principle, the good faith and sincerity principle, the basis taxation principle, and the prohibition of abuse of the right of tax investigation.

2) Whether the application of the converted value is legitimate

Article 97 of the former Income Tax Act provides that the acquisition value shall be one of the necessary expenses to be deducted from the transfer value in calculating transfer income, and where the actual transaction value at the time of acquisition is not verifiable, it shall be the transaction example value, appraisal value or conversion value prescribed by Presidential Decree. Article 114 of the former Income Tax Act provides that where there is any omission or error in the details of return on transfer income tax, the acquisition value shall be corrected based on the actual transaction value, and where it is impossible to recognize or confirm the actual transaction value at the time of acquisition of the relevant assets based on books or other evidentiary documents prescribed by Presidential Decree, the transaction example value, appraisal value, conversion value (referring to the acquisition value converted from the actual transaction value, transaction example value or appraisal value according to the method prescribed by Presidential Decree) or the standard market value, etc. In this context, the actual transaction value, which serves as the basis for calculating transfer gains, means the actual agreed amount at the time of the transaction price, not the objective exchange value, but the actual transaction price itself or payment (see, e.g., Supreme Court Decision 2002Du9694).

On the other hand, since the tax authority has the burden of proving the tax base, which is the basis of taxation in a lawsuit seeking revocation of taxation, and the tax base is deducted from the transfer value, the burden of proving necessary expenses is, in principle, the tax authority's burden of proving necessary expenses, as well as necessary expenses are favorable to the taxpayer, and most of the factual relations causing necessary expenses are located within the area controlled by the taxpayer, so it is difficult for the tax authority to prove it. Thus, if it is reasonable to have the taxpayer prove it, taking into account the difficulty of proof or the equity between the parties, it accords with the concept of fairness (see, e.g., Supreme Court Decision 2006Du16137, Oct. 26

According to Gap evidence No. 3 (including provisional number), it is recognized that the plaintiff acquired the secured debt of the right to collateral security (the maximum amount of 286 million won) established on March 8, 2002 on the building of this case, the secured debt of the right to collateral security (the maximum amount of 75.4 million won) established on the building of this case, the secured debt of the right to collateral security (the maximum amount of 75.4 million won) established on the ground of 106, among the buildings of this case No. 2 of this case, and the secured debt of the right to collateral security (the maximum amount of 234 million won) established on the ground of No. 107, 108, and 109.

However, the following circumstances, which are acknowledged by comprehensively taking account of the descriptions in subparagraphs 5-1 and 2 of the evidence No. 5-2 and the overall purport of the pleadings, are not revealed, namely, the amount of the secured obligation, and the Plaintiff does not have to prove at all as to whether the Plaintiff acquired and paid the instant building to the transferor. The sales contract (Evidence A5) reported by the transferor with the transfer value, entered the transfer value of KRW 24,520,00, and the transfer value of the instant building No. 2 as KRW 268,520,00, and entered the transfer value of the instant building in the sales contract (Evidence A4) submitted by the Plaintiff at the time of the transfer income tax, are different from the transfer value under the sales contract (Evidence A4) submitted by the Plaintiff at the time of the transfer, and there is no evidence to deem that the sales contract submitted by the transferor was forged. In full view of the fact that the Plaintiff’s succession of financial rights and interest in the item column of the sales contract submitted by the Plaintiff at the time of transfer income tax, it cannot be viewed that the acquisition value of the instant building.

3. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.