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

Cheong-gu Office

The Defendant’s disposition on May 16, 2017 by OOO(including additional OOO) for the transfer income tax belonging to the year 2015 against the Plaintiff is revoked.

A. On March 13, 2008, the Plaintiff acquired O-1-1 forest OOOm2 in OO-si on March 13, 2008 by inheritance, but transferred it to CCC on November 5, 2015 (hereinafter “the forest, land, inheritance, acquisition, and transfer” in this case).

B. On February 1, 2016, the Plaintiff: (a) applied Article 97(1)1(b) of the former Income Tax Act (amended by Act No. 13426, Jan. 25, 2016; hereinafter the same) to the Defendant as the conversion value; and (b) paid the transfer income tax for the year 2015 by making the transfer value as the actual transaction value as the POO; and (c) paid the transfer income tax for the year 2015.

C. On May 16, 2017, the Defendant issued a decision to increase the acquisition value of the instant forest as KRW 00 (including KRW 00 for under-reported additional tax and KRW 00 for late-paid additional tax) to the Plaintiff pursuant to Article 97(1)1(a) and (5) of the former Income Tax Act, Article 163(9) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 26982, Feb. 27, 2016; hereinafter the same shall apply), and Article 61(1)1 of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”) and notified the Plaintiff of the increase in the KRW 00 (including each of KRW 0 for under-reported additional tax and KRW 00 for late-paid additional tax) for the purpose of 2015 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on August 24, 2017, but the appeal was dismissed on November 10, 2017.

Facts without any dispute, Gap's 1, 2, Eul's 1 to 5, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion 1

1) Chapter 1: Article 100 (1) of the former Income Tax Act provides that "If the transfer value is calculated based on the actual transaction value (including the value under Article 96 (3) and the amount of transaction example, appraisal, and appraisal value in cases where the transaction example value is applied pursuant to Article 114 (7) and the amount of transaction example, appraisal, and conversion value is applied pursuant to Article 97 (7) and Article 114 (7), the acquisition value shall also be calculated based on the actual transaction value (including the value under Article 97 (7) and the amount of transaction example, appraisal, conversion value, etc. where the transaction example value, appraisal, and conversion value is applied), and if the transfer value is calculated based on the standard market price, the acquisition value shall also be calculated based on the standard market price."

2) Chapter 2: Article 163(9) of the former Enforcement Decree of the Income Tax Act goes beyond the limit delegated by Article 97(1)1(b)2 of the former Income Tax Act. Thus, the acquisition value of the instant land cannot be determined pursuant to the above Enforcement Decree, and there is no other way to verify the actual transaction value. Therefore, Article 97(1)1(b) of the former Income Tax Act should be applied not Article 97(1)1(a) of the former Income Tax Act, but Article 97(1)1(b) of the former Income Tax Act, not Article 97(1)1(a) of the former Income Tax Act. Since there is no transaction example

3) Chapter 3: Even if Article 163(9) of the former Enforcement Decree of the Income Tax Act provides that the assessed amount under Articles 60 through 66 of the Inheritance Tax and Gift Tax Act shall be deemed the actual transaction price at the time of acquisition pursuant to the above provision, if the assessed amount under the above provision is deemed the actual transaction price at the time of acquisition, the individual land price may be deemed the actual transaction price pursuant to Article 61(1)1 of the Inheritance Tax and Gift Tax Act in the case of land. Therefore, it is inconsistent with the legal system that strictly separates the officially assessed individual land price from the actual transaction price. Therefore, in the case of the Plaintiff’s doubt, it shall be deemed that the Plaintiff may select and apply the acquisition price in favor of himself under Article 97(1)1(a) of the former Income Tax Act and Article 97(1)1(b) of the former Income Tax Act selected by the Plaintiff in the order of transaction example, appraisal price or conversion price. Accordingly, there is no transaction example or appraisal price in the forest of this case.

4) Chapter 4: Article 97 (1) 1 (a) and (5) of the former Income Tax Act, and Article 163 (9) of the former Enforcement Decree of the Income Tax Act apply, even if Article 60 (1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 13796, Jan. 19, 2016; hereinafter the same) provides that "the value of the property on which the inheritance tax is levied shall be calculated based on the current market value as of the commencement date of inheritance," and Article 60 (3) of the former Inheritance Tax and Gift Tax Act provides that "where it is difficult to calculate the market value in the application of Article 97 (1) 1 (a) and (5) of the former Income Tax Act, the value assessed by the method prescribed in Articles 61 through 65 shall be deemed the market value, considering the type, scale, transaction circumstances, etc. of the relevant property at issue, only where it is difficult to calculate the market value as of the commencement date of inheritance.

5) Chapter 5: The Defendant’s calculation of acquisition price was lawful, but there was a justifiable reason not to err in breach of duty against the Plaintiff, and thus, the portion of the penalty tax out of the instant disposition is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

In applying Article 97(1)1 (a) and (5) of the former Income Tax Act, Article 163(9) of the former Enforcement Decree of the Income Tax Act, and Article 61(1)1 of the Inheritance Tax and Gift Tax Act, it is legitimate for the Defendant to calculate the acquisition value of the instant forest as an OO of the officially assessed individual land price in 2007 and impose the principal tax and penalty on the Plaintiff. The Plaintiff’s arguments disputing this are without merit. The reasons are as follows.

1) Whether Article 100(1) of the former Income Tax Act is violated: Determination on the first proposal

In cases where assets inherited or donated are transferred, the value (referring to the value appraised under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the date of commencing an inheritance or donation) equivalent to the tax base of the inheritance tax or gift tax (i.e., the value appraised under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the date of commencing an inheritance or donation) can prevent tax evasion or double taxation only when the transfer value is recognized as necessary expenses of the relevant assets and the transfer value exceeds the above value. As seen earlier, in cases of assets inherited or donated as mentioned above, separate provisions on the actual transaction value required for acquisition as of the lack of the actual transaction value required for such acquisition are established under the main provision of Article 163(9) of the former Enforcement Decree of the Income Tax Act, which was delegated by Article 97(5) of the former Enforcement Decree of the Income Tax Act, and where the transfer value is based on the actual transaction value as of the date of commencing an inheritance or donation as of the date of transfer, the Plaintiff’s assertion is unlawful against the standard market price determined otherwise.

2) Whether Article 163(9) of the former Enforcement Decree of the Income Tax Act applies Article 97(1)1(b) of the former Income Tax Act because it exceeds the limit delegated by the parent law: Determination on the second proposal

A) According to Articles 96 (1) and 97 (1) 1 (a) and (b) of the former Income Tax Act, the transfer value of assets under each subparagraph of Article 94 (1) of the same Act shall be based on the actual transaction value as at the time of transfer. Where the acquisition value is based on the actual transaction value required for the acquisition of the assets, and it is impossible to confirm the actual transaction value at the time of acquisition, the amount calculated by applying the transaction example value, appraisal value, or conversion value prescribed by the Presidential Decree in sequential order may be deemed the acquisition value. Meanwhile, Article 97 (5) of the former Income Tax Act provides that “the matters necessary for calculation of the actual transaction value required for acquisition, such as the scope of the actual transaction value required for acquisition, and the calculation of gift tax amount shall be prescribed by the Presidential Decree.” Article 163 (9) of the Enforcement Decree of the Income Tax Act provides that “Where the provisions of Article 97 (1) 1 (a) of the former Inheritance Tax and Gift Tax Act are applied to the assets acquired or donated assets (excluding the donations under Articles 333 through 60 through 60).

B) The Plaintiff’s assertion in this part is that the parent law under the main sentence of Article 163(9) of the former Enforcement Decree of the Income Tax Act is not Article 97(5) of the former Income Tax Act, but Article 97(1)1(b) of the former Income Tax Act is exempted from the delegation of the mother law. The Plaintiff’s assertion in violation of the above legal principle is without merit.

3) Whether Article 97(1)1(b) of the former Income Tax Act should be applied under the pretext of taxpayers’ interest: Determination on the third proposal

The plaintiff's assertion in this part is without merit in the following sense.

(1) Article 97(1)1 (a) of the former Income Tax Act provides for cases where it is possible to calculate the actual transaction price; and Article 97(1)1 (b) of the former Income Tax Act provides for cases where it is impracticable to calculate the actual transaction price. Therefore, the premise that two provisions may be applied simultaneously is unreasonable.

② As seen earlier, Article 163(9) of the former Enforcement Decree of the Income Tax Act is based on Article 97(5) of the former Income Tax Act and cannot be deemed as the invalid provision without delegation by the parent law. Application of Article 97(1)1 and (5) of the former Income Tax Act to land is “the legal fiction of the officially assessed individual land price as the actual transaction price, reflecting that the actual transaction price required for acquisition cannot exist in light of the nature of the assets inherited or donated, in cases of assets inherited or donated.” Therefore, it cannot be deemed contradictory to the legal system that strictly distinguish between the officially assessed individual land price and the actual transaction price.

4) Whether it is difficult to calculate the market price: Determination as to Section 4

A) In calculating gains on transfer of the inherited land, the acquisition value shall be deemed the actual transaction value as at the time of acquisition under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act (the main sentence of Article 97 (1) 1 (a) of the Income Tax Act and Article 163 (9) of the Enforcement Decree of the Income Tax Act). Meanwhile, the value of the land which is the property on which the inheritance tax is levied shall be determined based on the market value as at the date of commencing the inheritance (the main sentence of Article 60 (1) of the Inheritance Tax and Gift Tax Act). The "market price" here includes the value which is generally deemed to have been established where a free transaction is made between many and unspecified persons, including the expropriation price, public sale price, and appraisal price, and (2) where it is difficult to calculate the market price, the officially assessed land price under the Act on the Public Announcement of Real Estate Values and Gift Tax Act shall be deemed the market price (Article 60 (3) and Article 61 (1) 1 of the Inheritance Tax and Gift Tax Act).

B) In the instant case, taking into account the following facts, the entries in the evidence Nos. 6, 8, and 9-1, 2, and 3 of the evidence Nos. 9-1, 2, and 7, and the overall purport of the pleadings, it is deemed that there was a circumstance under which it is difficult to calculate the market price at the time of the commencement of the instant inheritance. The Plaintiff’s assertion on this part is

(1) There is no evidence suggesting that there exists a value generally recognized as being constituted when transactions are made freely between many and unspecified persons at the time of the commencement of the pertinent inheritance with respect to the forest of this case.

(2) Under Article 60(2) of the former Inheritance Tax and Gift Tax Act and Article 49(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act, in order to recognize the expropriation price, public auction price, appraisal price, etc. as the market price of inherited property, it should, in principle, be the case where the sale, appraisal, expropriation, auction, or public auction was made within six months before or after the date of commencing the inheritance (in the case of inheritance, before or after the date of commencing the inheritance). However, there was no case of sale, appraisal, expropriation, auction, or public auction with respect to the forest of this case within six months before or after the date of inheritance. In addition, there was no case of sale, appraisal, expropriation, auction or public auction with respect to the land adjacent to the forest of this case (OOO 2-16 land and 2-19 land adjacent to the forest of this case).

(3) In the instant forest land, a grave was installed at the time of the instant inheritance. Generally, the forest where a grave is installed is not shaken. It seems difficult to find a similar transaction example regarding the instant forest land.

(4) On the fourth day for pleading, the Plaintiff’s legal representative determined the illegality of an administrative disposition based on the law and fact-finding at the time of the administrative disposition. Since the Defendant did not review whether it was difficult to calculate the market price at the time of the commencement of inheritance of the forest of this case at the time of the instant disposition, the Defendant also argued to the effect that the Defendant should not consider the data that was collected late to ascertain whether the forest of this case falls under the market price at the time of the commencement of inheritance of this case after the instant disposition. However, the meaning that the administrative disposition should be determined based on the law and fact-finding at the time of the administrative disposition is not affected by the amendment of the law and the amendment of the law and the fact-finding at the time of the disposition, and the meaning that the illegality of the administrative disposition should be determined based on the materials that were submitted to the administrative agency at the time of the disposition is not only on the materials known to the administrative agency at the time of the closure of pleadings at the time of the fact-finding hearing, but also on the basis of all the facts presented at the time of the argument (see, 2015Du5815, supra).

5) Whether penalty tax is illegal: Determination on the fifth proposal

A) In order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under the tax law is an administrative sanction imposed as prescribed by the Act in cases where a taxpayer violates various obligations, such as a tax return and tax payment, without justifiable grounds, and thus, it cannot be subject to such a sanction in cases where there is a justifiable reason that the taxpayer cannot be aware of his/her obligations due to a conflict of opinion arising out of the meaning of interpretation of the tax law beyond the simple scope of land or misunderstanding under the tax law, or where it is unreasonable for the taxpayer to reasonably present his/her obligations or where it is unreasonable to expect the relevant party to fulfill his/her obligations. However, the determination that the taxpayer is exempt from the obligation of tax payment, etc. by interpretation of his/her own name does not constitute a justifiable ground for failing to constitute a violation of the duty (see, e.g., Supreme Court Decision 2017Du71717, Jun. 27, 2013).

B) Considering the following facts in the instant case, it cannot be deemed that there is a justifiable ground that cannot be viewed as attributable to the Plaintiff’s breach of duty. Therefore, the Plaintiff’s assertion on this part is without merit.

(1) In calculating gains on transfer of the assets inherited or donated at the time of transfer, in cases where the transfer value is based on the actual transaction value at the time of the transfer, and the market price is difficult to be calculated as of the date of commencing the inheritance or donation due to the actual transaction value at the time of the transfer, even if the individual land price, which serves as the tax base of the inheritance or gift tax, is applied, it does not violate Article 100(1) of the former Income Tax Act by Supreme Court Decision 2012Du5770 Decided September 27, 2012. Article 163(9) of the former Enforcement Decree of the Income Tax Act provides that Article 97(5) of the former Income Tax Act provides that where the transfer value is calculated based on the actual transaction value at the time of the transfer, it shall not be deemed that there is an invalid provision without delegation of the mother law, respectively, by Supreme Court Decision 20

(2) The Plaintiff merely determined that Article 97(1)1 (b) of the former Income Tax Act should apply to the acquisition value of forest land of this case at the time of the preliminary return of capital gains tax, and does not appear to have determined that Article 97(1)1 (a) and (5) of the former Income Tax Act should be applied, Article 163(9) of the former Enforcement Decree of the Income Tax Act, and Article 60(1) of the Inheritance Tax and Gift Tax

(3) The Plaintiff’s determination that the “market price” at the time of the instant inheritance does not fall under the case where it is difficult for the Plaintiff to calculate the “market price” at the time of the instant inheritance does not constitute the case where the instant woodland is difficult, and thus, it is merely an independent determination by the Plaintiff, even though Article 97(1)1 and (5) of the former Income Tax Act, Article 163(9) of

3. Conclusion

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

1) The purport of the Plaintiff’s assertion is as follows.

2) Article 97 (1) 1 (b) of the former Income Tax Act applies in cases where subparagraph 1 (a) of the same subparagraph is not applicable, the plaintiff's basic position is not the above item (a) but the above item (b) applies to the acquisition price of this case. If such position is premised, it seems that the parent law of Article 163 (9) of the former Enforcement Decree of Income Tax Act, which the plaintiff claims, constitutes the above item (a) can be logical consistency (Article 97 (5) of the former Income Tax Act) regardless of the legitimacy thereof (Article 97 (1) 1 (b) of the former Enforcement Decree, and the mother law of the above provision maintains the position that the mother law of the above item (b) of the Enforcement Decree is the above item (a) of the Income Tax Act regardless of the questions of the court, so

3) The court asked the Plaintiff several questions on whether there is a logical relationship between the issue of whether the individual publication price may be viewed as the actual transaction price and the issue of choice of the applicable legal provisions under Article 97 (1) 1 (a) or (b) of the former Income Tax Act, but there was no obvious answer. This part also states as the Plaintiff’s assertion.