1. Articles 120(1)2 and 31(1)2 of the former Restriction of Special Taxation Act (amended by Act No. 12853, Dec. 23, 2014; hereinafter the same) and Article 28(1)2 of the Enforcement Decree of the Restriction of Special Taxation Act (hereinafter collectively referred to as “instant provision”) provide that a corporation surviving a consolidation between small and medium enterprises (hereinafter referred to as “a surviving corporation”) acquires the pertinent business property from an enterprise extinguished by the consolidation (hereinafter “a surviving corporation”), the small and medium enterprise owner is a stockholder of the surviving corporation, and the value of stocks acquired by the extinguished corporation is more than the net asset value (referring to the amount calculated by deducting the total debt including reserves from the total amount of assets appraised at the market price as of the date of the consolidation) of the extinguished company, acquisition tax on the relevant business property to be acquired by the surviving corporation shall be exempted.

According to the issues of this case, in order to be exempted from acquisition tax on property for business acquired by a surviving company, the "value of stocks acquired by the surviving company due to the relevant consolidation" of the extinguished company should be above the net asset value of the extinguished company.

In such a case, the “stocks acquired through the relevant consolidation” does not impose any restriction on the issue clause at the time of acquisition. Therefore, it is reasonable to view that the instant provision includes only the “stocks acquired in return for consolidation” even after the acquisition of business property in good faith.

On the other hand, whether a surviving company issued and acquired shares by a small and medium enterprise owner of the extinguished company constitutes such shares is based on the contents of the transaction and the intent of the parties.