Defendant, Appellant

Head of Jeju Tax Office

2. The costs of appeal shall be borne by each party.

The Defendant’s disposition of imposition of gift tax of KRW 000,000,000 against the Plaintiff on June 3, 2011 is revoked.

2. Purport of appeal

A. The plaintiff

The part against the plaintiff in the judgment of the court of first instance shall be revoked. The imposition of gift tax of KRW 00,000,000 against the plaintiff on June 3, 201 shall be revoked.

B. Defendant

The part against the defendant in the judgment of the court of first instance shall be revoked, and the plaintiff's claim shall be dismissed.

The reasoning for this Court’s reasoning is as follows: (a) the part of the judgment of the first instance except for the part concerning the Plaintiff and the Defendant’s assertion as stated in the following 2.2; and (b) the part concerning the reasoning of the judgment of the first instance is as stated in the reasoning of the judgment; (c) thus, this Court shall accept it as it is in accordance with Article 8(2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act (it is not different

2. Parts to be dried;

The portion of the first instance judgment from 17th to 12th 6th 17th 12th son is as follows. According to the above facts, 2x1 land, 2xy7-2 land, and 2x4 land, 400,000 won, which is jointly secured by each of the above lands under Article 66 of the Inheritance Tax and Gift Tax Act, is yy,120,000 won (=17,60,000 + 247,040,000 + 68,480,000 won) or 41,448,000 won (18,040,000 + 20x20,216,0000 + 70,0000,000 won) or 2x14th x27th m27th m27th m27th m20,00 of the above land.

3. Parts to be determined additionally

A. Judgment on the plaintiff's assertion

1) Summary of the Plaintiff’s assertion

A) Of Article 49(1)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (hereinafter “the Inheritance Tax and Gift Tax Act”), the portion that excludes the appraisal value of unlisted stocks from the value recognized as the market price is contrary to the purport of Article 60(2) of the Inheritance Tax and Gift Tax Act, and is invalid not only by exceeding the scope of delegation, but also by violating the principle of no taxation without law. Thus, the value assessed through the market price appraisal of the stocks of this case

B) As of December 31, 2005, the company’s total amount of KRW 41,260,800 (=AAA house 94,189,9x0 +BBB Construction Co., Ltd. 224,29x,8,00 + GGB Construction Co., Ltd. 24, 29x,87x0 + GimCC 84,87x,000) with respect to each of the above claims, which became the cause of income, become impossible due to the debtor’s bankruptcy, etc., and it has become objectively clear that the future income has become impossible to be realized. Accordingly, each of the above sales claims should be deducted from the sales claims as non-collectionable claims.

2) Determination

In light of the following circumstances, the Plaintiff’s above assertion is without merit.

A) Article 60(2) of the Inheritance Tax and Gift Tax Act provides that “The market price shall be the value which is considered to be normal in cases where a free transaction is made between many and unspecified persons, and shall include the amount which is deemed to be the market price under the conditions as prescribed by the Presidential Decree, such as the acceptance and public sale price, and the appraisal price.” According to the delegation, Article 49(1)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “the average value of the appraisal value assessed by two or more reliable appraisal institutions with respect to the pertinent property” is one of the one recognized as the market price. However, the appraisal value of the property under Article 63(1)1 of the Inheritance Tax and Gift Tax Act, such as non-listed stocks, shall be excluded. In addition, Articles 60(3) and 63(1)1(c) of the Inheritance Tax and Gift Tax Act provide that where it is difficult to calculate

As can be seen, Article 49(1)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act explicitly excludes the appraisal value of non-listed stocks from the value recognized as the market price under the latter part of Article 60(2) of the Inheritance Tax and Gift Tax Act. The purport of this provision is to integrate the appraisal value of non-listed stocks with the supplementary assessment method stipulated under the Enforcement Decree of the Inheritance Tax and Gift Tax Act in order to prevent the occurrence of a result contrary to the principles of tax equity by calculating various appraisal values according to the different appraisal methods for non-listed stocks. In the case of non-listed stocks, the ordinary transaction is not conducted between many and unspecified persons, and thus, it is difficult to derive the market price under the former part of Article 60(2) of the Inheritance Tax and Gift Tax Act, barring any special circumstance, the appraisal value of non-listed stocks cannot be deemed as the market price under Article 60(2) of the Inheritance Tax and Gift

B) In the instant case where the Plaintiff did not explicitly file an application for appraisal, the Defendant cannot be deemed unlawful to calculate the market price of the instant shares pursuant to Article 63(1)1 (c) of the Inheritance Tax and Gift Tax Act and Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax

C) In light of the fact that Article 60(1) of the Inheritance Tax and Gift Tax Act provides that "the value of the property on which gift tax is levied shall be based on the market price as of the date of donation (the base date for appraisal)", it is reasonable to determine whether the Defendant is unable to recover the sales claim on the basis of the base date for appraisal of the shares of this case. Moreover, it is difficult to view that the evidence submitted by the Plaintiff alone alone becomes impossible to recover the sales claim of the company of this case for the three businesses and its income

B. Judgment on the defendant's argument

1) Summary of the defendant's assertion

The company of this case shall be deemed to have acquired claims equivalent to the above loans against an individual or other legal entity that has used y4y,498,006 won as loans from the D bank. Thus, the company of this case is not wholly liable to the company of this case, or there are claims corresponding to the above loans obligations of this case.

2) Determination

The evidence presented by the defendant alone is insufficient to view that the above loans were used by individuals or other corporations, or that the company of this case acquired claims equivalent to the above loans against individuals or other corporations that have used the above loans. The defendant's above assertion is without merit.

4. Conclusion

Therefore, the plaintiff's claim is justified within the above scope of recognition, and the remaining claims are dismissed as it is without merit. Since the judgment of the court of first instance is just in this conclusion, all appeals of the plaintiff and the defendant are dismissed. It is so decided as per Disposition.