Article 104-3 of the Income Tax Act

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

A. On March 11, 2005, the Plaintiff purchased the member-gu of Ansan-si from 000-00 to 1,256 square meters, from 00-0 to 420 square meters from the same 00-0, from 1,564 square meters prior to 00-00, and 3,240 square meters from the total area (hereinafter “previous farmland”) and completed the registration of ownership transfer on June 16, 2008.

B. On June 9, 2009, the Plaintiff purchased an OO-dong 000 m2, 995 m2, 000 m2, 1,018 m2, 2,013 m2,000 m2,000 m2,000 m2,013 m2, and completed the registration of the transfer thereof.

C. On June 1, 2009, the Plaintiff filed a final return on capital gains tax on the transfer of previous farmland with the Defendant and filed an application for reduction or exemption of capital gains tax under Article 70 of the Restriction of Special Taxation Act.

D. On February 5, 2010, the Defendant applied the heavy taxation rate to the Plaintiff on the ground that the previous and substitute farmland is not a self-arable farmland, instead of applying the said reduction and exemption provision, and applied the heavy taxation rate to the land for non-business use as provided by Article 104-3(1)1(a) of the Income Tax Act (hereinafter “instant disposition”).

E. The Plaintiff, who was dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on May 24, 2010, but the said appeal was dismissed on March 10, 201.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 to 3, Eul evidence 1 and 2 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In spite of the Plaintiff’s self-refluence of the previous and substitute farmland, since the Defendant imposed capital gains tax on each of the above farmland as non-business land on the premise that the Plaintiff did not self-refluence it, the instant disposition is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Relevant legal principles

(A) The legislative purpose of Article 70(1) of the Restriction of Special Taxation Act is to promote agriculture and rural communities by preventing and lowering the tax burden of non-permanent farmers, based on Article 121(1) of the Constitution, which declares the principle of light-to-land freedom as a State’s duty, in order to liquidate the tenant farming system, which is a major legal relationship, and to eliminate inefficiency of the use of farmland caused by absence of such system.

(B) The meaning of "direct cultivation"

Article 70 (1) of the Restriction of Special Taxation Act (amended by Act No. 4661 of Dec. 31, 1993), the term "direct farming", which is defined as the requirement for reduction or exemption of capital gains tax, was used in the law, was amended by Act No. 4661 of Dec. 31, 1993, and the expression "land cultivated by oneself" was used before the above amendment. The Supreme Court's precedent also takes the concept of "land cultivated by oneself as the requirement for reduction or exemption of capital gains tax (see Supreme Court Decision 94Nu11859 delivered on Feb. 3, 1995).

Since the amendment, the term "direct cultivation" has been continuously used until now, but the newly established definition provision has been amended by Presidential Decree No. 19329 on Feb. 9, 2006, and "direct cultivation" in Article 67 (2) of the Enforcement Decree of the Restriction of Special Taxation Act means that residents are engaged in cultivating crops or growing perennial plants on their own land at all times or by cultivating or cultivating them with their own labor.

Meanwhile, according to Article 104-3 (1) 1 (a) of the Income Tax Act, Article 168-6 (1) and Article 168-8 (2) of the Enforcement Decree of the same Act, farmland owners are subject to transfer income tax by applying the tax rate of 60/100 of the tax base for non-business land.

In full view of the introduction of the term "direct farming" and the developments leading up to the establishment of the definition provisions, the legislative purpose of the provisions on the Income Tax Act and the provisions on the reduction and exemption of capital gains tax on self-Cultivating farmland as seen earlier, the "direct farming" under Article 70 (1) of the Restriction of Special Taxation Act and the "self-Cultivating" under Article 104-3 (1) 1 (a) of the Income Tax Act shall be excluded from the capital gains tax reduction in order to recognize the "direct farming" as the same concept to realize the legislative purpose of promoting agriculture and rural communities by preventing external farmland speculation and reducing the tax burden of self-employed farmers on farmland.

(2) Whether the Plaintiff directly cultivated previous and substitute farmland

(A) The following facts can be acknowledged in full view of the statements in Gap evidence Nos. 4 through 17 (including each number), the witness AA, and some of the testimonys in thisB, and the purport of the entire pleadings.

① The Plaintiff’s father-CC and model KimD are residing in the same apartment with only the Plaintiff, Dong and lake at the time of the instant disposition.

② The Plaintiff’s straight line from the Plaintiff’s house to the front farmland, 0.9km, and 18km, respectively, demand three minutes for each vehicle and 40 minutes for each vehicle.

③ 8 residents at the seat of the previous farmland, such as HaEE, were prepared with a confirmation letter to the effect that the Plaintiff had cultivated the previous farmland directly, and three residents at the seat of the large farmland, such as OO-dong, O-dong, O-dong, O-dong, O-dong, O-dong, O-dong, O-dong, O-dong, O-dong, AB, etc., were directly cultivated by the Plaintiff.

④ The Plaintiff is a member of the OO agricultural cooperative as of December 8, 2009.

⑤ From the beginning of the 2000s, the Plaintiff, the Plaintiff’s father KimCC, and the Defendant KimD purchased various agricultural chemicals, seedlings, etc. at the point of OF from the early 200s to the time of the instant disposition.

(B) On the other hand, the following facts are also acknowledged in light of the overall purport of the arguments in Gap evidence Nos. 14 and Eul evidence Nos. 3 through 5 (including each number).

① The Plaintiff, from July 15, 2007, operated the meat retail store and the refined meat restaurant under the trade name of the member-gu AAAAA 000-0 AAAS, Ansan-si, and the HH village. The Plaintiff reported the total amount of income to KRW 00 in the year 2007, KRW 000 in the year 2008, and KRW 000 in the year 2009.

② In the farmland ledger against the Plaintiff prepared by the head of Ansan-si, as of the time of the instant disposition, only 2,600-0 m2,609 m2,172 m2 of the Dong-gu, Ansan-si, and 00-0 m2,172 m2 of the same m2. The previous and substitute farmland are not registered.

③ In the farmland ledger against the Plaintiff’s father-CC, the farmland ledger with the same 00-0 square meters as well as 6,894 square meters, and the Plaintiff’s shape KimD with the same 00-00 square meters and 7,463 square meters in total.

④ Around November 2009, a public official affiliated with the Defendant stated that the Plaintiff cultivated the land before the Plaintiff transferred the previous farmland, the head of Ansan-si Dong KimF, the Dong KimF, the head of Ansan-si stated that the Plaintiff cultivated the land before the Plaintiff transferred the previous farmland. OO-dong 00 U.S. 00 U.S. O-dong 000 U.S. O-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-dong o-

(C) In light of the facts acknowledged in the above sub-paragraph (b), it is difficult to readily believe that some of the testimony of EAA and EB, which corresponds to the Plaintiff’s assertion that the Plaintiff had cultivated the previous and substitute farmland directly, and the facts acknowledged in sub-paragraph (a) are insufficient to recognize it. Rather, as shown in the facts described in the above sub-paragraph (b), ① the Plaintiff’s main business appears to have been engaged in a restaurant business in the YH HH H H H H H H H H H village, and the Plaintiff did not ordinarily engage in the farming business or have been living mainly in the farming business. ② The Plaintiff did not clearly explain that the Plaintiff had obtained a considerable amount of income from running a restaurant, and at the same time did not clearly explain how the previous and substitute farmland had been in any form, and ③ it is difficult to view that the Plaintiff’s father and Y were to have reduced the Plaintiff’s help to cultivate the farmland more than 6,000-7,000 square meters of his own farmland, as alleged by the Plaintiff.

(3) Sub-decisions

Therefore, the plaintiff's assertion, which is premised on the direct cultivation of previous and substitute farmland, is without merit, and the disposition of this case is legitimate.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.