Article 153 (Non-taxation for Farmland)

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

A. On July 16, 2004, the Plaintiff transferred the same ○○○○-1 Do, Asan-si, ○○○○-1 Do (hereinafter “instant land”), and on July 26, 2004, the Plaintiff transferred the same ○○○○ Do, 4,007 square meters (hereinafter “instant land”) to Gangnam-do (hereinafter “the instant previous farmland”), along with the instant land 1.

In addition, around June 8, 2004, the Plaintiff acquired ○○○○-2 ○○○, ○○-2,031 square meters, and filed an application for non-taxation of capital gains tax on the ground that he purchased substitute farmland with the Defendant on September 30, 2004, by selling the previous farmland.

B. On September 1, 2005, the Defendant issued the instant disposition to correct and notify the Plaintiff of KRW 398,572,040 for the portion reverted to the year 2004, on the ground that the Plaintiff did not do so at the time of transfer of the previous farmland.

[Ground of recognition] Facts without dispute, entry of Gap 1 and 11 evidence, purport of the whole pleadings

2. Judgment on the plaintiff's assertion

A. The plaintiff's assertion

The Plaintiff, from April 2004 to March 2004, had authorized ○ Ginseng act for the cultivator of the previous farmland of this case, but employed directly or from April 2004 to July 200 and cultivated the previous farmland of this case. Therefore, the instant disposition based on the premise that the Plaintiff had not done so at the time of the transfer of this case was unlawful.

(b) Related statutes;

Article 89 (Non-Taxable Transfer Income Tax)

Article 153 (Non-taxation for Farmland)

(c) Fact of recognition;

(1) On September 12, 1996, the Plaintiff was inherited by the father of the previous farmland in this case from the father of the father of the farmland in this case.

(2) From January 15, 1989 to April 11, 1994, the Plaintiff operated a refined landing point, and from August 14, 1995 to August 14, 1995, the Plaintiff runs a ○○○ driving range in ○○-2, ○○○○○○, Asan-si, and from July 31, 2003 to July 31, 2003, the Plaintiff is running a real estate rental business at ○○○, ○○, Seoul, ○○-dong, ○○.

[Reasons for Recognition] Gap evidence 3, Gap evidence 5-2, 3, Eul evidence 4, Eul evidence 10-1 to 4, and the purport of the whole pleadings

D. Determination

(1) Article 89 Subparag. 4 of the Income Tax Act and Article 153(2)2 of the Enforcement Decree of the same Act provide for non-taxation requirements on income from substitute land for farmland. The purport of the provision that non-taxation on capital gains from substitute land for farmland is to protect farmers by allowing and guaranteeing free substitution of farmland by reducing the tax burden following the transfer of farmland, and thereby promoting the development and encouragement of agriculture by protecting farmers. Thus, in order to meet the above non-taxation requirements, the transferor should have resided in the location of the previous farmland for not less than three years and must have cultivated the previous farmland at the time of transfer.

In such cases, the term "self-cultivation" means cultivating a parcel of land under his/her responsibility and property, excluding cases where a third party cultivates a parcel of land due to such relations as entrusted management, surrogate cultivation, lease or loan for use, etc., and the claimant of the farmland must prove the fact that the farmland is self-arable

(2) With respect to the assertion that the Plaintiff cultivated the previous farmland of this case with the Plaintiff’s responsibility and property at the time of transfer, it is difficult to believe that the Plaintiff’s testimony at the time of transfer and partial testimony at the court of first instance, and the witness right ○○ ginseng at the court of first instance, on the sole basis of the descriptions of evidence No. 8, evidence No. 13-1, and evidence No. 17, and evidence No. 8, evidence No. 13-1, and No. 17, are insufficient to acknowledge the above assertion, and there is no other evidence to acknowledge it.

Rather, according to Eul evidence 3, Eul evidence 5-1, 2, Eul evidence 6, and 7-1 to 3, Eul evidence 5-2, Eul evidence 6, and Eul evidence 8, the fact inquiry results on the 03 head of this court's 03 head, and the purport of the whole pleadings as to the witness rights of the court of first instance, ① the plaintiff succeeded to the previous farmland on September 12, 1996, but from around 197 to the time of transfer of the previous farmland, he had the 00 head of the 2,000 head of the 2,000 head of the 3,000 head of the 2,000 head of the 2,000 head of the 3,000 head of the 3,000 head of the 2,000 head of the 3,000 head of the 3,000 head of the 2,000 head of the 3,000 head of the 3,00.

(3) Therefore, the instant disposition that the Plaintiff was not subject to capital gains tax exemption on the ground that the Plaintiff did not own the previous farmland at the time of transfer was lawful, and the Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance that shares the same conclusion is justifiable. Therefore, the plaintiff's appeal is dismissed as it is without merit, and it is so decided as per Disposition.

Daejeon District Court 2006Guhap5979 (No. 12, 2007)

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

A. On July 16, 2004, the Plaintiff transferred to Nonparty ○○, ○○, ○○○, ○○○-dong, 409-1,398 square meters (hereinafter “instant land”). On July 26, 2004, the Plaintiff transferred the same 410 square meters owned by the Plaintiff to Nonparty ○○○, ○○, ○○-dong, ○○, and the same 4,007 square meters (hereinafter “instant land”).

On August 6, 2004, the Plaintiff acquired ○○○○, ○○, ○○, ○○○, Y-2, 305-2, and four parcels, and applied for non-taxation of capital gains tax on September 30, 2004 on the ground that he purchased substitute farmland with the proceeds of sale of the previous farmland.

B. As to this, the Defendant, on September 7, 2005, deemed that the Plaintiff could not accept the application for non-taxation on the ground that the Plaintiff did not self-defluence at the time of transfer of the previous farmland, and issued the instant disposition to correct and notify the Plaintiff of KRW 398,572,040 for the transfer income tax reverted to the year 2004.

【Ground for Recognition: Unsatisfy, Entry of Evidence A Nos. 1 and 11, and the purport of the whole pleadings】

2. Judgment on the plaintiff's assertion

A. The plaintiff's assertion

The Plaintiff’s previous farmland of this case had Nonparty ○○ by proxy from March 2001 to March 2004, but had the Plaintiff directly or indirectly employed and cultivated the previous farmland of this case from March 2004 to July 2004, which was when the Plaintiff transferred the previous farmland of this case, to receive non-taxation benefits, the Defendant’s disposition imposing capital gains tax on deeming that the previous farmland of this case is not a farmland substitute, which is a non-taxation requirement for capital gains tax in relation to the transfer of the previous farmland of this case, is unlawful.

(b) Related statutes;

/ Income Tax

Article 89 (Non-Taxable Transfer Income)

No income tax on transfer income (hereinafter referred to as “transfer income tax”) shall be levied on the following incomes:

4. Income accruing from substituted land for farmland falling under such cases as prescribed by the Presidential Decree.

【Enforcement Decree of the Income Tax

Article 153 (Non-taxation for Farmland)

(2) The term “cases as prescribed by the Presidential Decree” in subparagraph 4 of Article 89 of the Act means the farmland substituted by lot of farmland for cultivation (excluding the farmland falling under any subparagraph of paragraph (4)), which satisfies the requirements falling under any of the following subparagraphs:

1. Where a person, who resided in a location of previous farmland for not less than three years and has cultivated another farmland within one year from the date of transfer of previous farmland, while residing in a new location of farmland for not less than three years, or has cultivated the previous farmland within one year from the date of acquisition of new farmland, while residing in a new location of farmland for not less than three years; and

2. Where the area of new farmland to be acquired is not less than the area of farmland to be transferred, or the value thereof is not less than half of the value of farmland

(3) The term “location of the farmland” in the proviso of paragraph (1) 3 and paragraph (2) 1 means the area falling under any of the following subparagraphs (including the area which falls under the relevant area at the time of commencement cultivation, but comes not to fall thereunder due to the opening of the administrative district):

1. An area in a Si/Gun/Gu (referring to an autonomous Gu; hereafter the same shall apply in this paragraph) where farmland is located;

2. An area within a Si/Gun/Gu adjacent to an area referred to in subparagraph 1.

(c) Fact of recognition;

(1) On September 12, 1996, the Plaintiff was inherited by the father of the previous farmland in this case from the father of the father of the farmland in this case.

(2) The Plaintiff operated a fixed landing point from January 15, 1989 to April 11, 1994. From August 14, 1995 to 00 ○○ Dong-dong 569-2, and from July 31, 2003 to 217, the Plaintiff is running a real estate rental business.

[Grounds for Recognition: Evidence No. 3, Evidence No. 5-2, 3, Evidence No. 4, Evidence No. 10-1 through 4, the purport of the whole pleadings]

D. Determination

(1) In order to be exempted from farmland as substitute land, the previous farmland must be cultivated directly while residing for not less than three years at the seat of the farmland in the Si/Gun/Gu where the farmland is located (an area in Si/Gun/Gu adjacent to the seat of the farmland or the seat of the Si/Gun/Gu).

In this case, it is necessary to cultivate the land under his responsibility and account even though he does not cultivate the land by himself, and it is excluded from the case where a third person cultivates the land by the relationship of entrusted management, surrogate cultivation, lease or loan for use, etc., and the claimant of the farmland must prove the fact of self cultivation.

(2) In the instant case, it is difficult to believe that: (a) evidence Nos. 6 through 8, 12, evidence Nos. 18, 19, 20, and 21-1, evidence Nos. 29-1, and evidence Nos. 29-1, and evidence Nos. 29-1, and evidence Nos. 6 through 8, 12, evidence Nos. 18, 19, 20, and 21, which correspond to the Plaintiff’s transfer of the previous farmland at the time of transfer for not less than 3 years; and (b) evidence Nos. 13 and 14-1 through 3, evidence Nos. 15, and part of evidence No. 17 are insufficient to acknowledge

Rather, comprehensively taking account of the following: (a) evidence Nos. 3 and 5-1, 2, and 3 of the evidence Nos. 6 and 7-1, 5-2; and (b) each statement of the evidence Nos. 8 and the witness right ○○○○○○○, the Plaintiff inherited the previous farmland around September 12, 1996; (c) from around 1997 to the time of transfer of the previous farmland, the Plaintiff allowed Nonparty ○○○ to make the previous farmland by proxy; (d) ② The right ○○○, a local confirmation on July 26, 2005, entered the previous farmland No. 1997 to 200,000,000 won with the farmland of this case; and (e) the Plaintiff received the farmland of this case with the farmland of this case from 1997 to 204 as the farmland of this case; and (e) the Plaintiff stated that the previous farmland of this case was transferred to ○○○○○ by proxy.

(3) Therefore, since the Plaintiff did not own the previous farmland for not less than three years at the time of the transfer of the previous farmland, the Defendant’s disposition of this case imposed on deeming that the income from the transfer of the previous farmland does not fall under the object of non-taxation of capital gains tax is legitimate, and the Plaintiff’s assertion is without merit

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.