2. Each of the plaintiffs' remaining claims is dismissed.

3. The costs of lawsuit are five-minutes and three are assessed against the plaintiffs, and the remainder is assessed against the defendants.

The following facts are no dispute between the parties, or evidence No. 1-4, evidence No. 1-2, evidence No. 3-1 through 4 (Evidence No. 1-1 through 4), evidence No. 4, evidence No. 5, evidence No. 6, evidence No. 7-1 through 4 (Evidence No. 2-1 through 4), evidence No. 8, evidence No. 10, evidence No. 11, evidence No. 25, evidence No. 26, evidence No. 27-1 through 6, evidence No. 28-1 through 6, evidence No. 29-1 through 6, evidence No. 30, evidence No. 1 through 7, evidence No. 32-1 through 5, evidence No. 3-1 through 5, and evidence No. 3-4, respectively.

A. Skjin Construction Co., Ltd. (hereinafter “Skjin Construction Co., Ltd.”) was established around June 30, 1986 and engaged in stone processing and interior construction business. Nonparty 1 again acquired 13,44 shares, 12.22% of the total outstanding shares of Skjin Construction Co., Ltd. on May 7, 197 under the name of Plaintiff 1, 4.9%, 5,378 shares, 4.9% under the name of Plaintiff 2, respectively. On May 28, 1997, 110 shares issued by Skjin Construction Co., Ltd. under the name of Plaintiff 1,444, 25,378 shares under the name of Plaintiff 1, 200 won per share, and participated in the new shares issued by Skjin Construction Co., Ltd. on May 28, 1997 under the name of Plaintiff 1,370 shares issued under the name of Plaintiff 1,97.

B. On December 27, 1998, Sejong-do Co., Ltd.: (a) transferred 4 billion won of the asset revaluation reserve to capital and issued 400,000 won of new shares to shareholders; and (b) granted 48,88 shares in proportion to the shares held at the time. Nonparty 1 was issued 48,88 shares in the name of the Plaintiff 1 and 19,556 shares in the name of the Plaintiff 2.

C. On April 21, 2001, the head of Gangnam District Tax Office: (a) the Plaintiff 1 calculated the value of each gift as stated in the separate sheet; (b) around 13,44 weeks around May 7, 1997; (c) around 28, 13,44 weeks around December 30 of the same year; (d) around 9,778 weeks around December 30 of the same year; and (e) around 48,88 shares under title trust; (b) presumed the donation as the donation; (c) notified the Plaintiff 1 of each gift tax, as stated in the separate sheet of calculation of gift tax; and (d) notified the Plaintiff 1 of each gift tax office’s domicile as his resident registration; and (e) notified the Plaintiff 1 of each reported emigration as his resident registration; and (e) notified the Plaintiff 1 of each reported report as his domicile; and (e) notified the Plaintiff 1 of each reported resident’s domestic address as his resident registration.

D. On March 1, 2001, the director of the tax office of Yananananan District calculated each gift amount as stated in the separate sheet of calculation of gift tax, and imposed each gift tax, as stated in the separate sheet of calculation of gift tax, on the ground that the Plaintiff 2 received each title trust of the shares of Yananan District from Nonparty 1 5,378, around May 7, 1997, around 5,378, around 28, around December 30, 300, around 3,911, and around December 27, 198, around 198, around December 27, 1998.

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

(1) Defect in the procedure of notifying Plaintiff 1 of the instant disposition

Plaintiff 1, in a regular manner, issued a residence passport by reporting emigration to the Ministry of Foreign Affairs and Trade, and issued a visa by the U.S. Embassy, and thereafter registered overseas Koreans to the competent mission under the Act on the Registration of Overseas Koreans pursuant to the Act on the Registration of Overseas Koreans. As such, in the case of overseas emigrants who regularly reported emigration to the Republic of Korea and registered overseas Koreans, the address of the overseas emigrants can be grasped in the Ministry of Foreign Affairs and Trade. Nevertheless, in the case of Defendant Gangnam-nam Tax Office’s service by public notice without confirming Plaintiff 1’s address to the Ministry of Foreign Affairs and Trade, it is illegal and illegal and thus, the imposition of each gift tax on Plaintiff 1 is not effective.

(2) Illegal taxation of gift tax on title trust with no tax avoidance purpose

The non-party 1, who is the actual owner of the stocks of this case, was engaged in the real estate construction and lease business, and was at the time of acquiring the stocks of this case in the name of the plaintiffs, and was likely to be subject to compulsory execution against his own property because the creditors had been urged to perform their obligations in a severe manner at the time of acquiring them in the name of the plaintiffs. Thus, it is not the acquisition of the stocks of the Sejong Agency under the name of the plaintiffs for the purpose of evading taxes under Article 43 (5) of the Inheritance Tax and Gift Tax Act, and thus, it cannot be presumed as a donation. Thus, the disposition of this case on which the gift

(3) The illegality of appraisal of the value of the shares issued with capital increase

(A) As long as the title trust is presumed to be a donation under the Inheritance and Gift Tax Act, the initial title trust shares in this case should be deemed to be owned by the Plaintiffs, not by Nonparty 1, but by the shareholders on the register of shareholders. Since the preemptive right is granted to the Plaintiffs, the preemptive right is not a title trust with the Plaintiffs by exercising the preemptive right but a title trust with respect to the shares paid to the Plaintiffs, namely, the shares paid to Plaintiff 1, the amount of KRW 13,444 million for the shares paid to the Plaintiffs, i.e., the shares paid to Plaintiff 1, May 28, 1997, i.e., the amount of KRW 9,778 million for the shares paid to Plaintiff 1, Dec. 30, 1997; KRW 23,222 million for the shares paid to Plaintiff 2; and KRW 5,378 million for the shares paid to Plaintiff 2 on May 28, 1997.

(B) Even if the plaintiffs consider the object received from non-party 1 as the shares of this case, the supplementary evaluation method under Article 56 (2) of the former Enforcement Decree of the Inheritance and Gift Tax Act (the method of calculating the net profit and loss amount per share for the last three years) is null and void in violation of the substance over form principle under the Framework Act on National Taxes. In other words, the net asset value may increase as the price of the increase in the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the net profit and loss, but it cannot be said that the net profit and loss per share increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the increase in the amount of the capital.

(4) The illegality of imposing gift tax on the shares with free capital gains in this case

The fact that the Plaintiffs received the instant capital increase shares is due to the transfer of the assets revaluation reserve held by the Sejong Agency to the capital, and there is no change in the company’s net assets due to capital increase without compensation. Furthermore, the Income Tax Act does not impose income tax by prescribing that the gratuitous transfer in the event of the transfer of the capital of the revaluation reserve fund under the Assets Revaluation Act is not deemed the dividend income. However, if the nominal trustee is subject to gift tax on the gratuitous transfer that was granted by the capital transfer of the assets revaluation reserve solely on the ground that the title trust was made, the nominal truster would be treated as a tax lack of equity compared to the actual owner of the stocks, and thus, the gift tax is not imposed on the capital increase shares for the instant gratuitous transfer.

B. Relevant statutes

The entry in the attached Form is as specified in the relevant statutes.

C. Determination

(1) As to whether the notice procedure of imposition is defective

In cases where the address of a person to be served with documents under the Framework Act on National Taxes is overseas and it is difficult to serve documents, or his address is unknown, the document shall be deemed lawful after the lapse of 14 days from the date of public announcement. In such cases, the term “when the address is uncertain” means when the resident registration card, etc. provides that the document cannot be confirmed even. Considering the purport of the pleading, the Plaintiff 1’s family head of the tax office’s duty of care to verify the address of the person to be served with documents under the Decree on National Taxes, including the document No. 3, No. 4, No. 5, No. 6-1, No. 3, No. 4, No. 7, No. 8, and No. 10, and No. 10, Plaintiff 1’s family registry head of the tax office to verify the address of the person to be served with the Plaintiff’s family head of the Dong-gu, Incheon Metropolitan City, and the Plaintiff 1’s family registry head of the tax office cannot be served with the Plaintiff 1’s family registry head of this case.

(2) Whether the title trust of the instant shares was for tax avoidance purpose

The legislative purport of Article 41-2(1) of the former Inheritance Tax and Gift Tax Act is to recognize an exception to the principle of substantial taxation in the purport that the act of tax avoidance by using the title trust system is effectively prevented, and thus, it is possible to apply the proviso of the same Article only if the purpose of tax avoidance is not included in the purpose of the title trust, and the taxes prescribed in the proviso cannot be limited to the gift tax, and whether there is the purpose of tax avoidance in the title trust should be determined based on the title truster. In this case, the burden of proving that there was no purpose of tax avoidance exists the person who asserts it (see Supreme Court Decisions 95Nu10778, Apr. 26, 1996; 95Nu9174, Aug. 20, 196; 9Du2192, Jul. 23, 199).

However, as alleged by the plaintiffs, it is difficult to believe that non-party 1, a title truster, entrusted the company's own shares to the plaintiffs in the name of ownership of each of the shares in this case, because it was apprehended that the non-party 1 would be subject to compulsory execution against his own shares without any tax avoidance purpose, and thus, it is difficult to believe that the statement of Gap evidence 13, Gap evidence 14, Gap evidence 15, Gap evidence 16, Gap evidence 17, Gap evidence 18, Gap evidence 19, Gap evidence 19, Eul evidence 20, Eul evidence 20, Eul evidence 22, Gap evidence 23, Gap evidence 24, Gap evidence 24, and Gap evidence 30, and there is no other evidence to find this otherwise.

Rather, according to the statement No. 12-1 of the evidence No. 12, it can be acknowledged that Nonparty 1 owned the shares that amount to 20.62% of the issued shares of this case in its name at the time of trust to the Plaintiffs, and in light of such facts of recognition, Nonparty 1 cannot be readily concluded that there was no purpose of tax avoidance, such as avoiding disadvantages under the tax law, which would be subject to the imposition of global income tax on dividends, by title trust with each of the shares of this case to the Plaintiffs.

Therefore, this part of the plaintiffs' assertion is without merit.

(3) Determination of the illegality of the appraisal method for the shares issued with capital increase in the instant case

(A) As to the assertion that the subscription price for new shares should be assessed as the donation price

The legislative intent of the former Inheritance and Gift Tax Act is one of the exceptions to the substance over form principle, and where the actual owner and its nominal owner have completed registration, registration, transfer of title, etc. by agreement or communication, such declaration of intent and consent is deemed to exist in the internal relationship, regardless of whether the actual owner and the nominal owner have expressed their intent and consent in the internal relationship, thereby estimatinging the donation to the extent that it is intended to effectively prevent the tax avoidance act using the title trust system and realize the tax justice, and it does not decide whether the title trust property belongs to the property under title trust. Therefore, the actual owner of the title trust property is still the title truster notwithstanding the provision on the presumption of donation under the

Therefore, the preemptive right to the shares issued with new shares is vested in the title truster 1, who is the actual owner of the first title trust shares. Nonparty 1 exercised its preemptive right to new shares under the name of the plaintiffs, and held title trust with the plaintiffs. Thus, in imposing gift tax on the title trust of the shares issued with new shares, it is lawful that the defendant imposed the gift tax on the title trust of the shares issued with new shares issued with new shares issued with the non-party 1, who is not the title trust price paid by the non-party 1 to the plaintiffs, on the value of the shares issued with new shares held in title trust with the non-party 1, not the title trust price paid by the non-party 1 to the plaintiffs. Thus, this part of the plaintiffs' assertion is without merit (the plaintiff's assertion that the non-party 1 contributed to the plaintiff's new shares issued with the non-party 1, who actually belongs to the plaintiffs, and thus, the rights to the shares issued with new shares to the non-party 3's shares issued with new shares were exercised under the name of the plaintiff 1, the non-party 3's title 1, 4.

(B) As to the assertion that the net value assessment of shares is illegal

The assessment of unlisted stocks under the former Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be based on the average value of net asset value per share and net profit and loss per share. First, in the assessment of net asset value, it is natural to calculate the total number of new shares by adding up the number of net asset value per share in the assessment of net asset value of new shares, as new shares are issued due to capital increase.

However, the net profit and loss per share is calculated by dividing the net profit and loss calculated during a certain period of business year into the total number of shares issued in the pertinent business year. The new shares issued with capital increase has not been fully contributed to realizing the net profit and loss in the past business year, but can contribute to realizing the net profit and loss in the business year after the issuance. Therefore, it is impossible to calculate the net profit and loss value of the new shares. However, since the net profit and loss value per share in the past three years before the issuance of the new shares is not realized but merely the future expectation value, it is impossible to calculate it. However, the average net profit and loss value per share in the past three years before the issuance of the new shares is assessed by adding up the number of new shares issued with capital increase without any contribution to realizing the net profit and loss per share in the future, and even if it is calculated based on the "total number of shares issued as at the end of the business," it cannot be deemed that it violates the principle

Therefore, it is lawful that the Defendants calculated the value of the shares issued as of the end of the business year under the Enforcement Decree of the Inheritance and Gift Tax Act in assessing the net value of each share of the shares issued with capital increase. Therefore, this part of the Plaintiffs’ assertion is without merit.

(4) Whether imposing gift tax on the shares to be gratuitously increased in the instant case is unlawful

Assets revaluation reserve fund under the Assets Revaluation Act may be disposed of only when it is offset by the amount on the balance sheet, which is incurred after the transfer of capital or revaluation, and the conversion of capital into capital does not increase the net assets of the company, unlike the transfer of surplus funds, but merely replaces the amount increased by revaluated the assets already appraised from the reserve fund account with the different time of the evaluation into the capital account, and therefore there is no change in the economic substance of the assets being valued. Even if the capitalization of such reserve fund is free of charge by the existing stockholder, it is nothing more than the actual division of the existing stocks without a net increase since the existing stockholder does not make a new investment in the company. (In this respect, income tax shall not be imposed on the value of the stocks or investment acquired by the stockholders by transferring the revaluation reserve fund under the Assets Revaluation Act into the capital in accordance with the provisions of the Income Revaluation Act).

In addition, even if the provision on presumption of gift under Article 41-2(1) of the former Inheritance and Gift Tax Act is an exception to the substance over form principle, insofar as the actual owner imposes gift tax on the title truster based on the formal act of title trust to the nominal owner, the title truster should be premised on the actor who holds the title trust of assets to the title trustee.

However, according to the change of the asset revaluation reserve whose value was already reflected in the existing shares in the capital, the shares in the name of the plaintiffs were actually divided and distributed to the existing shareholders in proportion to the shares of the existing shareholders. It cannot be deemed that the title truster 1, who is the title truster, was separately entrusted with the shares in the existing title trust to the plaintiffs who are the title trustee.

Therefore, even if the shares of this case were issued in the name of the plaintiffs, this is merely because the plaintiffs did not receive title trust from the non-party 1 separately from the previous shares entrusted with the name, but the previous shares entrusted with the name are divided substantially, and thus, it is unlawful to impose gift tax on each of the above gratuitous shares on the plaintiffs on the grounds of title trust.

(5) Sub-committee

Therefore, the disposition of imposition of KRW 183,583,750 on the ground of the gift tax made on December 27, 1998 by the head of Gangnam-gu Tax Office with respect to the shares for free capital of this case among the disposition of imposition of gift tax against the plaintiffs in relation to the title trust of shares made by the defendants against the plaintiffs by the non-party 1, and the disposition of imposition of KRW 42,237,240 on the ground of the gift tax made on March 1, 2001 by the head of the Incheon District Tax Office on December 27, 1998 is unlawful.

3. Conclusion

Therefore, on March 2, 2001, the head of Gangnam District Tax Office imposed a gift tax of KRW 183,583,750 on the ground of the gift as of December 27, 1998 on the ground of the gift as of December 27, 1998 on the Plaintiff 1, and the head of the Incheon District Tax Office imposed a gift tax of KRW 42,237,240 on the ground of the gift as of March 1, 2001 on Plaintiff 2 on the ground of the gift as of December 27, 1998 by the head of the Incheon District Tax Office. The plaintiffs' claim seeking its revocation is justified, and the remaining claims by the plaintiffs are dismissed. It is so decided as per Disposition.

Judges Mak-Jin (Presiding Judge)