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

The disposition of imposition of KRW 898,359,020 on August 3, 2007 by the defendant against the plaintiffs on August 3, 2007 shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. All of the plaintiffs' claims are dismissed.

① On March 4, 2003, ParkB, who was the owner of 253,50 shares of AASP Co., Ltd. (hereinafter “AASP”), died on March 4, 2003. At the time of the death, there were Plaintiff KimCC, Plaintiff ParkWD, ParkE, and ParkF, who were his wife’s children.

② On April 15, 2003, the Plaintiffs entered into a contract to transfer AAS C’s shares 253,500 shares, a common inherited property, to 3.57,0960,580 won (hereinafter “the instant transaction price”) for the Canadian-owned Goods Inc. (hereinafter “AFT”), a shareholder of AAS C, a Canadian-registered company, hereinafter “AFT”), and subsequently, assessed the taxable value and tax base of the instant shares as KRW 3.57,0960,580,000 per share to KRW 14,086,00 (hereinafter “transfer”).

③ On September 7, 2004, the Deputy Director of the Central District Tax Office notified the result of deliberation that the transaction value of the instant case is desirable to be considered as the market price as the transaction value transferred to a third party who does not have a special relationship after the commencement date of inheritance, and calculated the transaction value of the instant case as the price of the instant shares, and determined the inheritance tax by the Plaintiffs.

④ On April 15, 2007, the defendant was pointed out that "in relation to the decision of inheritance tax of the plaintiffs by the Board of Audit and Inspection as a result of the audit conducted by the Central District Tax Office, the transaction price of this case shall not be deemed to be the market price of the shares because it is the transaction price according to the transaction with a person with a special relationship." On August 15, 2007, the defendant evaluated the difference between the amount of the shares of this case and the amount of supplementary assessment under the Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter referred to as the "former Inheritance Tax and Gift Tax Act"), Articles 60 (3) and 63 (1) (c) of the former Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 19177, Dec. 30, 2003; hereinafter the same shall apply) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act."

⑤ On November 5, 2007, the Plaintiffs filed an appeal on the instant disposition with the Tax Tribunal, but the Tax Tribunal dismissed all the appeals by the Plaintiffs on November 4, 2008.

[Ground of recognition] No dispute, Gap evidence 1, 2, Eul evidence 1-1 to 4, Eul evidence 2-1 to 2-5, Eul evidence 4, Eul evidence 6-1 and Eul evidence 6-2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

The Plaintiffs asserted that the instant disposition was unlawful on the following grounds.

1) As to the fact that the instant transaction value is the normal price reflecting the objective exchange value

On April 15, 2003, which was within six months from March 4, 2003, the inheritance date of the plaintiffs, transferred the shares of this case to AFT to 14,086 won per share. Since there was no special relationship between ParkB and CAE or CAE at the time of concluding a shareholder agreement or modification agreement between ParkB and the decedent, who was the basis for the transfer of the shares of this case, and the plaintiffs cannot be deemed to have a special relationship between AFT and AFT, it cannot be deemed that there was a special relationship between the plaintiffs and AFT. In light of the fact that the transfer of the shares of this case is a normal transaction that properly reflects the objective exchange value of the shares of this case, and thus, the inheritance tax should be calculated accordingly. Accordingly, on a different premise from this point, the assessment of the value of shares of this case under the supplementary method of assessment under the former Inheritance Tax and Gift Tax Act is unlawful.

2) As to the disposition of this case that goes against the principle of trust protection

In light of the fact that the Defendant initially rendered an inheritance tax decision based on the transaction value of this case after the deliberation by the tax dispute deliberation committee of the Central and Medium Business Office, and the Defendant rendered a disposition of this case based on the registration of the Board of Audit and Inspection after the lapse of four years, it is unreasonable to expect the first Plaintiffs to evaluate and pay the value of this case by the supplementary assessment method rather than the transaction value of this case. Therefore, it is unreasonable to expect the Plaintiffs to report and pay inheritance tax by assessing the value of this case’s stock as supplementary assessment method. Therefore, it is against the principle of protecting trust as well as justifiable grounds for not being able to cause any error to the Plaintiffs

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

① On September 3, 1999, ParkB had been engaged in the business of manufacturing screen diskettess, etc., which are parts of control manufacturing machinery, and had established AAS CY, an unlisted corporation, through an investment in kind on September 3, 199. At the time of the establishment, ParkB held 38,900 common shares, among 390,000 common shares issued AASP, 38,900 shares, and the rest of 1,100 shares, respectively, by the Plaintiffs (Plaintiff KimCC, Park DD, ParkE, and 200 shares, respectively).

② On January 18, 2001, ParkB entered into a contract between CAE International Holdings Limited (hereinafter referred to as CAE), which is a multilateral national of Canadian nationality, to sell 135,400 shares out of the shares held by CAE, and 1,100 shares held by the plaintiffs to 136,50 shares totaling of 1,100 shares held by the plaintiffs (limited to 35 percent of the total shares) at 15,385 shares per share and at the same time between CAE and AAE, which includes the following matters in relation to stock transfer restrictions (hereinafter referred to as CAE agreement):

③ On March 21, 2002, the CAE transferred 136,500 shares of its own AASP (35% equity ratio) to AFT. Accordingly, ParkB, AAS Green, CAE and AFT concluded a contract under which the content of the shareholder agreement is revised (hereinafter “revision agreement”).

④ On June 1, 2002, AFT’s CFO Epid Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod Pod 12, 2001, where AFT did not distribute adequate cash to offset its income subject to taxation to the extent that it does not receive taxation, and at the same time, it would not threaten the growth of AAS Pod Pod Pod Pod 154,687,700 won that could be distributed in the year 2002, which would interfere with the growth or operation of AFT.

⑤ Upon the death of ParkB on March 4, 2003, AFT exercised the preferential right to purchase the instant shares against the Plaintiffs, who were the successors of ParkB’s heir as stipulated in the agreement between shareholders.

6) On April 14, 2003, the 2002 AAAS Green Co., Ltd.’s ParkD, ParkE, Directors’ ChH, finland director-based director-based director, 5 Mabck-based director-based director-based director of the Canadian, attended the AAScckn Committee meeting on April 14, 2003, and paid a total of KRW 2.176,000,00 to shareholders (65%, 35% payment to the Plaintiff), and the 253,500 shares shares shares (65%) in the 2002 fiscal year’s financial statements to be approved on condition that the heir of ParkB’s 253,500 shares shares (65%) should be transferred to AFT to the 357,096,000 shares (65%).

7) On April 15, 2003, the Plaintiffs sold the instant shares to AFT at KRW 3.57 billion, the transaction value of the instant shares, KRW 580,580,000,000 ( KRW 14,086 per share). The Plaintiffs reported and paid income tax (including resident tax) for KRW 1.369,950,000,000,000,000,000,000,000,000,000 won per share, which is KRW 1.35,550,000,000,000 won per share under the revised contract.

④ At the time of the transfer of the instant shares, there was a provision that “it is prohibited from transferring shares without the approval of the board of directors.” The prohibition provision was registered on January 26, 2001, and was repealed on April 15, 2003.

① Plaintiff Park DD, ParkE was appointed on September 3, 1999, each of which was the date of establishment of AAAS Green, and Plaintiff KimCC was dismissed on April 15, 2003, which was the date of the instant stock transfer. On March 2001, 3 times in 2001, and 4 times in 2002, attended the AAS Green Green Council and was paid one million won per attendance allowance.

[Reasons for Recognition] No. 2-1, 2, 3-1 through 6, 4, 1, 2, 7, 8, 5-1, 5-2, 7, 5-2, 5, 1, 5, 1, 1, 1, 1, 1, 2, 1, 1, 2, 1, 2, 1, 1, 2, 2, 3

D. Determination as to whether the instant transaction value is an objective exchange price through normal transactions

In full view of the contents and structure of Article 60(1), (2), and (3) of the former Inheritance Tax and Gift Tax Act, and Article 49(1)1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, the value of the property subject to inheritance tax shall be the market value as of the date of commencing the inheritance. The "market price" means the value of the property at a certain point, which is the value of the property at a certain point and is generally recognized as being traded if it is freely traded between many and unspecified persons, i.e., an objective exchange value formed through a general and ordinary transaction. If there is a fact of sale of the property, the transaction value shall be recognized as the market value in principle, but if the transaction value is deemed unreasonable to the extent that it cannot be seen as an objective exchange value formed by a normal transaction, the sale price at issue shall not be recognized as the market value. Moreover, only if it is difficult to calculate the market value of the inherited property as of the date of commencing the inheritance, it shall be allowed to calculate the market value by supplementary method under Articles 61 through 65 of the Inheritance Tax Act.

Examining the following circumstances revealed by the above facts in light of the above legal principles, it cannot be deemed that the transaction value of the transfer of stocks of this case, which was made within 6 months from the date of inheritance commencement, is objectively unreasonable, such as that there was a special relationship between the plaintiffs and AFT. Rather, it is reasonable to view the transaction value of this case as the market value at the time of the evaluation base date as the transaction value reflecting the objective exchange value formed through general and normal transactions appropriately. Thus, the plaintiffs' assertion

① The Plaintiffs sold the instant shares to AFT as the instant transaction amount on April 15, 2003, which was within six months from March 4, 2003, which was the date the inheritance was commenced. Unless there are special circumstances, it is reasonable to view that the instant transaction amount falls under the “market price of the instant shares” under Article 60(1) and (2) of the former Inheritance Tax and Gift Tax Act under the main sentence of Article 49(1)1 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act.

② Considering the following circumstances, it is reasonable to view that the transaction value of this case constitutes an objective exchange value formed through normal transactions:

The Plaintiffs, in light of the fact that the issue under the shareholder agreement (Triger Evv) of the death of the ParkB in which one of the parties to the agreement was a party to the agreement, led to the transfer of the shares in this case to AFT under Article 4.5 and Article 6.4 of the Shareholders Agreement, as a matter of principle, the “value per share” under Article 1.1 (Z) (i) of the Shareholders Agreement (the value assessed by EB IT method) = 13,890 won per share = 13,890 won per share as at the end of the fiscal year immediately preceding the date on which the subscription for purchase was made ± 14,086 won per share, and there was no substantial right to determine whether and when the shares in this case were transferred, the Plaintiffs did not transfer the shares in this case to AFT at the same price as at the date on which the shares were transferred to AB, but there was no right to transfer the shares in this case to the other party’s 13th,000 won per share price per share.

In light of the fact that ParkB’s CAE, a multilateral national corporation of Canada’s nationality, transferred 35% equity shares of ParkBB to attract investments from CAE in order to attract investments, and concluded for the restriction on transfer of shares to a third party of AAAS equity shares, including part of the AAS equity shares and the shares owned by the plaintiffs, and there is no evidence to prove that ParkB and CAE are equally applied to ParkB and CAE, and that ParkB or CAE have a dominant relationship with the other party or could have exercised influence over the other party’s decision-making, it was a general and normal transaction. Thus, it is difficult to view that ParkB and CAE have a common contract between shareholders that were concluded in a collective combination with this, and that there is no evidence to prove that ParkBB and CAE have a dominant relationship with the other party or that they could exercise influence over the other party’s decision-making.

B. In light of the fact that there is no evidence to prove that AFT acquired the entire CAE stocks from CAE to become a party to a shareholder agreement, and that there is no other evidence to prove that B and AFT have a dominant relationship with the other party or could exercise influence over decision-making, the revised contract is a normal contract entered into in connection with transfer of general and normal shares, as in the case of a shareholder agreement, and it is difficult to view that B and CAE and AFT set the per share value per share of the AAAS stocks in collusion with each other for the purpose of evading future taxes.

㉣ AA스크린 주주 전체인 박BB, CAE 또는 AFT는 주주간계약 및 수정계약에 의하여 어느 누구라도 자신 소유의 주식을 양도하고자 할 경우에 우선적으로 다른 주주에게 자신의 주식을 매수하도록 청약(매매청약)을 하여야 하고, 다른 주주가 주식을 매수하지 않겠다고 하여 제3자에게 매각하고자 하는 경우에도 다른 주주에 대한 매매청약에서 제시된 내용보다 더 유리한 조건으로 매각하는 것이 금지되어 있을 뿐만 아니라, 제3자가 주주간계약의 당사자가 되는 것을 선행조건으로 해서만 제3자에게 AA스크린 주식을 양도할 수 있는 점 등에 비추어 볼 때, AA스크린 주식은 불특정다수인이 장외에서 자유롭게 거래할 수 없는 비상장주식으로서 제3자가 AA스크린 주식을 양수하고자 하는 경우에 장차 주주간계약이 자신에게도 적용되어 주식 양도 자체뿐만 아니라 그 양도 가격까지 제한받게 된다는 것을 고려할 수밖에 없고, 이러한 사정은 이 사건 주식의 객관적인 교환가치를 떨어뜨리는 요인으로 작용하게 될 것인바, 이 사건 주식 양도가 주주간계약에 따라 원고들과 AFT 사이에 이루어졌다는 사정만으로 이 사건 주식 양도가 비정상적인 거래이거나 특수한 형태의 거래이어서 AA스크린 주식의 객관적인 교환가치를 적정하게 반영할 수 없다고 볼 것은 아니다.

In the event that ParkB or the plaintiffs intend to transfer AAS stocks, the value per share, which is the value of the transfer price, is determined based on the operating income of the immediately preceding fiscal year, so that ParkB or the plaintiffs could not arbitrarily adjust the contract value, and the value per share of AAAS stocks is linked to the operating income of the fiscal year immediately preceding the transfer, so that the increase in the amount of AAAS C's operating income would increase in proportion to the increase in the amount of AAS C's operating income, and there is no evidence to support that ParkB or AFT reduced the operating income of 202 AAAS C's 202 with prior knowledge of their death and reduced the operating income of the AAS C's 202. The initial calculation method is that there is no evidence to support that BB or AFT reduced the amount of operating income of 202 in order to lower the contract value, and that the initial value of BB and CAB's shares would be based on the stock transfer price of CAB's stocks.

③ The Plaintiffs received dividends of KRW 1.36,955 million from AAS Green on the condition that the instant shares were transferred to AFT prior to the transfer of the instant shares, but such circumstance alone is difficult to deem that the instant transaction value is objectively unreasonable in light of the following circumstances.

The Plaintiffs were bound to sell the shares of this case to AFT at the price of the second agreement pursuant to the shareholder agreement and the revised agreement. Such circumstances were the same regardless of whether the Plaintiffs received dividends from AAASP prior to the transfer of the shares of this case, and thus, there is no causation between the determination of the transaction value and the dividend payment.

In the event of the allocation of dividends to the ordinary shareholders of the Republic of Korea, the objective exchange value of shares at that time is reduced. However, the trading value of this case is determined by the share value calculated by dividing the total number of shares issued after multiplying the operating income of the year immediately preceding the transfer year by 6, and is irrelevant to the decrease in the objective exchange value of shares

B. On March 4, 2003, the Plaintiff and AFT had already been holding the right to receive dividends for the fiscal year 2002 as a shareholder of AAS C, and died in a situation where only the specific timing and amount of dividends have been determined by the board of directors, etc., and the Plaintiff had the duty to sell the shares of this case to AFT through the expression of intent to purchase AFT, but there was no provision in the agreement between shareholders on the implementation date, and there was a probability that there was a legal dispute between the Plaintiffs and AFT regarding the specific timing of transfer of the shares of this case, and that there was no need to acknowledge the Plaintiff’s dividends of this case before 200 million won in light of the fact that the Plaintiff and AFT had already been holding the right to receive dividends for the fiscal year 200,000, and that there was no reasonable need to acknowledge the transfer of shares of this case to AFT 930,000,000 prior to the date of transfer of shares of this case.

④ At the time of the transfer of the instant shares, AFT was a corporation that invested more than 30 percent of the total number of shares AAS C, and since the Plaintiff KimCC was an auditor of AAS C, Plaintiff Park DoD, and Park E engaged in activities by attending the board of directors while holding office as a director, etc., Plaintiff Park DoD, and Article 19(2)2 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, and Article 4 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 20 of April 30, 2008; hereinafter the same shall apply) of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 20, Apr. 30, 2008; 30 percent or more of the total number of shares AAS CF C, the transaction value of the Plaintiff’s DoD, Park E, and Kim CC could not be seen as an objective relationship between the Plaintiffs and the transaction value.

E. Sub-decision

Therefore, the transaction value of this case is the transaction value under Article 49 (1) 1 of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act. Nevertheless, the disposition of this case imposing inheritance tax and additional tax by assessing the value of the stocks of this case by the supplementary evaluation method, considering that the transaction value with a related party of this case is deemed to be unfair.

3. Conclusion

If so, the plaintiffs' claims are justified, and the judgment of the court of first instance is just in conclusion, and all appeals of the defendant are dismissed. It is so decided as per Disposition.