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

A. XX Pots Co., Ltd. (hereinafter referred to as “non-party companies”) were mainly manufacturing bags for student use and sports, and listed on KOSDAQ on February 17, 2004.

B. On November 28, 2005, OCC, KimD and Plaintiff KimA purchased the company's management right at KRW 4790,000,000 from 6,280,790 of the registered ordinary shares (500 won) of the company (22.62% of the total shares issued, 693,820, 1293, 691, 691, 450, 350, 371.3 billion won per share and purchased the company's management right at KRW 4.79,00,000 (hereinafter "representative director's acquisition of the company's management right on November 28, 2005") and the non-party company and the non-party company acquired the company's management right at KRW 1,420,79,000,000 per share (hereinafter "non-party company's representative director's acquisition of the company's management right").

C. On December 24, 2005, the OrCC and the HahH agreed to transfer the status of assignee under the acquisition agreement on November 28, 2005 to Hah HH, KimD and Plaintiff KimA agreed to transfer the status of assignee under the said agreement. On November 28, 2005, HahH, KimD and Plaintiff KimA concluded a contract with Hah HE et al. and the assignee of the acquisition agreement on November 28, 2005 to change Hahh H et al., and the non-party company entered into the contract with Hah on December 26, 2005.

D. On December 24, 2005, HH, KimD and Plaintiff KimA entered 1,420,790 shares of the company as of November 28, 2005, which were subject to a contract for acquisition of shares of 2,841,500 shares of the company (total issuance shares of 45.24%) with 3,371.3 shares per share; the above transfer was also entered into an agreement of 1,420,810 shares remaining 1,420 shares,810 shares (EE 693,830 shares, FF 691,460 shares, maximumGG 35,520 shares, and hereinafter referred to as “the shares of this case”) with 3,304,731,790 shares per share; the above transfer was also entered into an agreement of 1,371.30 shares and 305 shares per share; the above agreement of 1,291 shares each of this case (hereinafter referred to as “the shares”).

E. After that, Hah, K and the Plaintiffs changed from the transferee to the Plaintiff BB and the KK on April 3, 2006, entered into a contract to purchase KRW 473,129,730 of the shares of this case (Article HH 40,000 shares, the head of KK 396,915 shares, Plaintiff KimA 228,165 shares, and Plaintiff BB 395,730 shares) for KRW 4,731,297,300 of the shares of this case (hereinafter referred to as the “acquisition acquisition agreement of this case”), and paid KRW 473,129,730 on the same day to the third party such as the private EE and others on the same day.

F. On May 25, 2006, Plaintiff KimA received 620,810 shares from three parties, such as E, and received a receipt for payment after full payment of the price, and on August 25, 2006, Plaintiff KimA reported and paid KRW 3,30 won per share pursuant to Article 35 of the Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter “Gift”) and the difference between the acquisition price calculated as 8,505 won per share, which is the market price of May 25, 2006, and the acquisition price calculated as 3,212,691,750 won subtracting KRW 300,000 from KRW 2,912,691,750,000 per share, which is the date of settlement.

G. Plaintiff B also received a receipt on April 7, 2006 of the shares of this case, which received on April 292,645 of this year and on May 25, 2007,35 of this year, the total amount of KRW 400,000 per share of KRW 40,355 of the shares and paid the price in full, and thereafter, on August 25, 2005 of this year, the acquisition price calculated on August 25, 200 pursuant to Article 35 of the Inheritance Tax and Gift Tax Act, which was calculated on April 7, 2006 as KRW 3,386 per share, and the difference in the acquisition price calculated on May 25, 206 as KRW 1,420,620,745 of the shares and KRW 300,000 per share after subtracting the acquisition price calculated on May 25, 206 of the shares from KRW 1,420,316,274,27

H. On August 11, 2009, Plaintiff KimA claimed on December 24, 2005, which was the date of trade reservation, as the date of market price assessment of the above 620,810 shares, and sought a refund of the payable tax amount. However, on October 12, 2009, the director of the tax office of the distribution of the above shares refused the Plaintiff KimA’s request for correction on the ground that the base date for market price assessment of the above shares should be seen as May 25, 2006, the date of settlement of the price (hereinafter “instant 1 disposition”).

I. Plaintiff B also claimed on December 24, 2005, which was the date of trade reservation on August 11, 2009, that Plaintiff B should be the date of market price calculation of the above 400,000,000, and sought a refund of the payable tax amount. However, the head of the defendant Dong Dong Dongdae District Tax Office rejected Plaintiff B B B B B B’s request for a correction on the ground that the base date for market price calculation of the above shares should be the date of settlement of the price, on December 30, 2009, the date of market price calculation of the above shares should be the date of settlement (hereinafter “instant disposition 2”).

(j) Although the Plaintiffs filed an appeal on each of the dispositions of this case with the Tax Tribunal, they were dismissed on October 19 of the same year.

[Ground for Recognition: No dispute exists, Gap evidence Nos. 1 through 3, 7, 9, 10, Gap evidence Nos. 4 through 6, and 8; Eul evidence Nos. 1, 2, Eul evidence Nos. 1, 2 and 3; Eul evidence Nos. 2 and 3; Eul evidence Nos. 1 and 2; the purpose of the whole pleadings and arguments of Gap’s witness No. E]

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

For the following reasons, each of the dispositions of this case should be revoked as illegal.

1) Since the instant shares held by three parties, such as the PE, the maximum price of the instant shares, were prohibited from being protected by the Korea Securities Depository for two (2) years from the date of listing the KOSDAQ market listing rules, they were bound to enter into the instant agreement in the form of trade promise instead of the sales contract. However, since the instant agreement had already been made conclusive intent to sell the instant shares at the time of the instant agreement, the date of concluding the sales contract, which is the date of the instant agreement, is the date of signing the sales contract, and the market price should be calculated by deeming the date of concluding the sales contract, which is not on April 7, 2006 or May 25, 2006, which is the date of settlement of the price, as the date of market price calculation.

2) Even if not, three parties, such as E, did not intend to donate the amount equivalent to the difference between the market price and the acquisition price in connection with the transfer of the instant shares, and the acquisition agreement of this case aims at the transfer of management rights. Therefore, in order to prevent a dispute arising from a change in the market price, the acquisition agreement of this case is agreed at KRW 3,30,000, which is the market price at the time of the agreement of this case. Therefore, there is justifiable reason for the plaintiffs to acquire the instant shares from three parties, such as E, at a price considerably lower than the market

3) Although there was no gift intention to a third party, such as EE, and was a normal transaction related to the transfer of management rights, each disposition of this case, emphasizing only the necessity of imposing tax, violates the principle of substantial taxation under Article 14 of the Framework Act on National Taxes.

4) Article 52(1) of the Corporate Tax Act and Article 88(1) of the Enforcement Decree of the Corporate Tax Act provide that only a transaction between corporations shall be denied by wrongful calculation based on the date of contract with a related party, and Article 26(9) of the Enforcement Decree of the Gift Tax Act provides that when an individual and a corporation transfer or acquires assets between an individual and a corporation, the corporation shall not be subject to gift tax unless the provision on wrongful calculation under the Corporate Tax Act is applied to the transaction between an individual and an individual who has no special relationship, the imposition of gift tax on the basis of the date of settlement for payment violates the principle of fairness

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) As to the first argument

A) The date of sales contract of the instant shares

In other words, the following circumstances, which can be recognized by the aforementioned facts and the evidence as seen above, indicate that the instant shares were protected under the KOSDAQ Market Listing Regulations (Regulations No. 10, Jan. 21, 2005; hereinafter the same) at the time of the instant agreement, and thus, it was impossible to enter into a sales contract. At the time of the instant agreement, a separate transfer contract was entered into on the date of the instant agreement based on the instant agreement within 2 months from the time the protected amount of the instant shares was rescinded, and that it was agreed that the purchaser would take priority over the instant agreement (Article 9 of the instant agreement). At the time of the instant agreement, at the time of the instant agreement, the purchaser was Cho, KK, and the Plaintiffs, and the parties were H, K, and the purchaser did not have paid any other purchase price, such as down payment, etc. at the time of the instant agreement, and the purchase price for the instant shares was paid at KRW 473,129,730 on the date of the instant agreement.

In light of the fact that it was paid, it is reasonable to view the acquisition date of this case as April 3, 2006, which is the acquisition date of this case.

B) The market price calculation date of the instant shares

Article 26 (8) of the Enforcement Decree of the Gift Tax Act (amended by Presidential Decree No. 20621, Feb. 22, 2008; hereinafter the same) provides that in determining whether a property is acquired at a low price between persons with a special relationship under Article 35 (2) of the same Act and Article 26 (5) and (7) of the Enforcement Decree of the same Act, the date on which the price and the market price are calculated (hereinafter referred to as the "basic date for calculation") shall be based on the date of settlement of the price of the relevant property, but where it is deemed unreasonable to calculate the price of the relevant property as the basic date for calculation due to a sudden change in exchange rates after the sales contract, etc., "Where it is deemed unreasonable to calculate the market price on the basis of the date of settlement of the price of the relevant property due to a sudden change in exchange rates, etc." means cases where it is unreasonable to calculate the market price on the basis of the date of settlement of the price of the relevant property.

According to the following circumstances, the non-party company's share price was 1,420,790 shares of the non-party company on November 28, 2005, and HahH, KimD and KimA maintained the increase in the market price on December 27, 2005, since the non-party company's representative director was appointed on December 27, 2005, the above increase in the market price was 3,330 won before and after the acquisition of the shares. (2) The plaintiffs asserted that the sale price of the shares of this case was 1,420,790 shares of the non-party company on November 28, 2005, and that the market price of the shares of this case was 50,000 won at the time of the acquisition of the shares of this case. (3,50,000 won at the time of the conclusion of the contract of this case).

2) As to the second argument

A) Article 35(2) of the Gift Tax Act and Article 26(5) and (7) of the Enforcement Decree of the same Act provide that, in cases of acquisition of property between persons with a special relationship, only if the value of the property calculated by subtracting the price from the market price without justifiable grounds is transferred for the difference between 30/10 or more of the market price and the price, the amount calculated by subtracting 300 million won from the price calculated by subtracting the price from the market price shall be deemed to have been donated to the assignee’s donated property. Here, whether “justifiable cause for the practice of trading” exists or not shall be determined by whether the acquisition of property at the price significantly different from the company is deemed to have neglected economic rationality in light of sound social norms and commercial practices, and the burden of proof shall be borne by the tax authority, and in cases of acquisition of property at the price significantly different from the market price without economic rationality, it shall be presumed that the intent of donation is also assumed.

B) In light of the following circumstances, it is reasonable to view that the plaintiffs' acquisition of the shares of this case at a price significantly lower than the market price was based on the economic rationality, Gap evidence Nos. 9, 10, 14, 15, 18 through 23, Gap evidence Nos. 11, 12, 13, Eul evidence Nos. 4 and 10, Eul evidence Nos. 5-1 through 8, Eul evidence Nos. 6, 11-1 through 6, Eul evidence Nos. 7-1 through 8-3, Eul evidence Nos. 8-1, 8-2, and Eul evidence Nos. 9-1 through 4, and the purport of the whole pleadings in some testimony of the witness Es.

(1) From June 1, 2005 to May 31, 2006, the share price of the non-party company’s shares has increased rapidly, and thus, at the time of entering into the acquisition agreement of this case, had increased even at the time of entering into the acquisition agreement of this case, the Plaintiffs seems to have been sufficiently expected to have increased the share price after entering into the acquisition agreement of this case.

(2) The plaintiffs and Hah acquired 45.24% of the shares issued by the non-party company by including the shares of this case through the acquisition agreement of this case, etc., and the plaintiffs asserted that they acquired the shares of this case for the purpose of acquiring management rights for the purpose of acquiring management rights at the preparatory document dated August 22, 2011, and they were appointed as representative director, and they did not coincide with the plaintiffs' assertion on the grounds that they were to acquire the shares of this case for the purpose of investment, such as changing the assertion that they merely acquired the shares of this case.

(3) The Plaintiffs did not consider the market price at the time of entering into the instant acquisition agreement (C.3,330 won) at the time of entering into the instant acquisition agreement, but did not consider only the market price at the time of the instant agreement (C.3,389 won) and determined the sales price per share of the instant shares at KRW 3,330.

(4) It is not deemed that there was an inevitable circumstance to sell the instant stocks, which are listed stocks at a price lower than the market price, such as pressure on funds. Even if there was an intention to acquire management rights for the Plaintiffs or KH on November 28, 2005, they can carry out all procedures for acquiring management rights of the non-party company by purchasing 1,420,790 shares (22.62% of the total shares generated by the non-party company) on November 28, 2005, including the transferee’s dispatch of the non-party company to the non-party company, inspection of all data necessary for management, involvement in the affairs of the non-party company, appointment of officers, etc. (see Article 9 of the acquisition agreement as of November 28, 2005). Thus, it seems that there is no need to acquire the instant stocks even if the secured amount was not rescinded at the time of the instant agreement

(5) At the time of the instant agreement, in order to prevent disputes arising from price fluctuations, the parties agreed to pay KRW 1.5 billion for each contract to the other party, if one of the parties fails to perform the agreement (Article 3), but this appears to be necessary to prevent disputes arising from price fluctuations even in cases where the purchase price is determined in accordance with the market price at the time of the conclusion of the instant agreement.

(6) Pursuant to Article 21(1)1 of the KOSDAQ Listing Regulations of the Korea Securities and Futures Exchange, which provides that a person who is obligated to continue to hold the shares may not sell the shares held for a period of two years from the date of listing, the MF, etc. at the time of the agreement of this case cannot sell the shares of this case since two years (2 years from February 17, 2004, the date of listing) have not passed from the date of the above protection period as of December 24, 2005.

(7) 원고 김AA는 2005. 11. 28.자 양수도계약을 체결하고 사채업자 이MM으로부터 합계 14억 4,500만 원을 차용하여 소외회사의 주식 31만 주를 인수하였는데, 위 31만 주 중 2005. 11. 28. 18만 주(1주당 4,400원), 2006. 1. 5. 12만 주(1주당 2,850원), 같은 해 3. 22. 1만 주(1주당 4,630원)를 각 이MM에게 대물변제로 양도하였고, 위 각 양도가액은 각 양도 당시의 시가와 비슷한 금액인 사실, 이MM은 2005. 11. 30.부터 2006. 3. 27.까지 코스닥 시장을 통하여 위와 같이 대물변제받은 이 사건 주식 31만 주를 모두 양도한 사실, 원고 김AA는 2006. 4. 3. 이 사건 양수도계약을 체결하고 사채업자 양OO으로부터 합계 45억 5,400만 원, 사채업자 김PP로부터 합계 11억 5,000만 원을 각 차용하여 소외회사의 주식 620,810주를 인수하였는데, 위 620,810주 중 2006. 6. 26. 양OO과 김PP에게 각 19만 주(1주당 1만 원), 같은 해 8. 22 김PP에게 12,645주(1주당 11,200원)를 각 대물변제로 양도하였고, 같은 해 8. 2. 조QQ에게 15만 주(1주당 11,200원), 같은 해 11. 8. 코스닥 시장을 통하여 24,165주(1주당 8,836원)를 각 양도하였으며, 위 각 양도가액도 각 양도 당시의 사가와 비슷한 금액인 사실, 양OO과 김PP는 2006. 6. 26.부터 같은 해 8. 25.까지 코스닥 시장을 통하여 위와 같이 대물변제받은 이 사건 주식 합계 392,645주를 양도한 사실, 원고 이BB도 사채업자 양OO으로부터 3억 5,000만 원, 사채업자 원RR으로부터 10억 원을 각 차용하여 소외회사의 주식 40만 주를 인수하였는데, 위 40만 주 중 2006. 8. 2. 최SS에게 20만 주(1주당 11,000원)를 양도하여 위와 같이 차용한 돈을 변제하였고, 2006. 7. 31.부터 2007. 3. 22.까지 코스닥 시장을 통하여 나머지 20만 주를 각 양도하였으며, 최SS에게 양도한 위 20만 주의 양도가액도 양도 당시의 시가와 비슷한 금액인 사실 등에서 알 수 있는 원고들의 이 사건 주식 1주당 양수가액과 양도가액, 원고들이 양수한 이 사건 주식의 양도시기, 원고들이 인수한 이 사건 주식이 곧바로 코스닥 시장을 통하여 대부분 매각된 점 등에 비추어 보면, 원고들은 이 사건 양수도계약상의 양수대금과 시가에 의한 양도대금의 차액을 얻을 목적으로 이 사건 주식을 시가보다 낮은 가격으로 매수한 것으로 보인다.

(8) The plaintiffs asserted that HaH acquired the shares of this case for the purpose of acquiring management rights, but HaH also borrowed a total of KRW 4,467,309,00 from Plaintiff KimA and acquired 1,330,000 out of the shares of this case (930,000 shares based on the contract for acquisition by transfer on November 28, 2005 + 40,000 shares based on the contract for acquisition by transfer on November 3, 2006), but from August 3, 2006 to November 3, 2006, sold 8,000 shares out of the above 1,330,000 shares and received gains from transfer, and then resigned from the representative director of the non-party company on November 3 of the same year.

(9) On November 28, 2005, the acquisition price of the instant shares was already paid KRW 2.145 million prior to the conclusion of the contract, and when the contract for acquisition of a company was concluded, it is common to evaluate the value of the company to be acquired by the transferee by receiving data that can assess the value of the company to be acquired from the transferor, and negotiate the acquisition price with the transferor on the premise of this premise. In this case, there is no evidence to assess the corporate value of the non-party company. In addition, according to the plaintiffs' assertion, the agreement of this case was concluded according to the transferor's price presented by the transferor. According to the plaintiffs' assertion, Hah acquired the instant shares for the purpose of acquiring the management right, and the plaintiffs acquired the instant shares for the purpose of investment, and thus, Hah and the plaintiffs did not have economic interests but concluded the instant acquisition price contract at the same time, it seems that the acquisition price of November 28, 2005 and the instant agreement was not concluded in accordance with the ordinary transaction practices.

(10) Although Plaintiff KimA was not paid by May 25, 2006, KRW 500,000,000,000,000,000 from the acquisition price of the instant shares under a contract for acquisition by transfer on November 28, 2005 and the acquisition price of the instant shares, it is difficult to obtain the payment of KRW 1.23 billion, not from the transferor to Plaintiff KimA on May 25, 2006, but rather from the transferor to the Plaintiff KimA on May 25, 2006.

3) As to the third argument

As seen earlier, the Plaintiffs’ acquisition of the instant shares at a price significantly lower than the market price without justifiable grounds in light of transaction practice constitutes the requirements for gift tax imposition under Article 35(2) of the Gift Tax Act and Article 26(5) and (7) of the Enforcement Decree of the same Act. Accordingly, each of the instant dispositions based on such grounds cannot be deemed to violate the principle of substantial taxation under Article 14 of the Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010). Therefore, the Plaintiffs’ assertion is without merit.

4) On the fourth argument

(3) Article 52(1) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19891, Feb. 28, 2007; hereinafter the same shall apply) provides for the method of calculating the amount of income of a domestic corporation with no such unfair act, and Article 88 of the Enforcement Decree of the Income Tax Act provides for the method of calculating the amount of income of the corporation based on the difference between the sale and transfer of property at a lower price than that of the former Enforcement Decree and the former Enforcement Decree of the Income Tax Act (amended by Act No. 814, Dec. 30, 2006; hereinafter the same shall apply) on the grounds that the former Enforcement Decree of the Income Tax Act provides for the method of calculating the amount of income at a lower price than that of the former Enforcement Decree of the Income Tax Act (amended by Act No. 10423, Feb. 28, 2007; hereinafter the same shall apply) and thus, Article 41 and 167

3. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed as it is without merit. It is so decided as per Disposition.