2. The defendant shall pay to the plaintiff 2,298,298,000 won with 5% interest per annum from November 11, 2003 to September 10, 2009, and 20% interest per annum from the next day to the day of full payment.

3. The plaintiff's remaining appeal is dismissed.

4. All costs of the lawsuit shall be borne by the defendant.

5. The above paragraph 2 can be provisionally executed.

The following facts are not disputed between the plaintiff and the defendant, or they can be acknowledged by considering the whole purport of the pleadings in each entry in Gap evidence 1 through 22, 24 (including the number of branch numbers).

[1]

○○ New MineHD Co., Ltd (hereinafter “New MineD Co., Ltd”) and the Il Mineral Metal Co., Ltd. (hereinafter “Flachip Co., Ltd.”) have their principal office in Japan as a stock company established under the Japanese law, and a new Daily Mining Concession Co., Ltd. owned 100% of the total issued stocks of the Japanese metal.

Pursuant to the provisions of the Japanese Commercial Act on corporate division around August 2003, the Il Metal decided to divide his metal processing business division into 1) and succeed to the newly incorporated company (hereinafter the above division and succession to the company of this case) (hereinafter the above division and succession to the company of this case shall be referred to as “instant corporate division,” and the divided company shall be referred to as “divided company,” and the newly incorporated company shall be referred to as “newly incorporated company.”

○ In the instant corporate division, the new company succeeded to the assets, liabilities, contractual status, and other rights and obligations pertaining to the metal processing business sector of the sunlight metal, and the said assets and liabilities are succeeded to the book value.

At the time of 00,00 shares issued by Patti and Patis 160,00 shares of Patti and Patis Doctrine Industrial Co., Ltd. established under our law. However, in the above division plan, the above 160,00 shares and 860,000 shares were succeeded by the newly incorporated company (hereinafter the above 160,00 shares and 860,00 shares).

○ In the above division plan, the shares issued by the newly incorporated company were allocated to shareholders of the total number of sunlight metals, a divided company, according to the ratio of the total number of shares issued by the newly incorporated company to the existing issuance.

Pursuant to the above division plan, on October 1, 2003, the Japanese Metal Processing Co., Ltd. (hereinafter referred to as the "Japanese Metal Processing Co., Ltd.") which has its head office in Japan completed the registration of incorporation under the Commercial Act of Japan and entered into force of the division of the company of this case.

○ Accordingly, the instant shares were succeeded to mining metal processing, a new company, from the Japanese metal, a divided company, to the single mining metal processing, and new mining HD, a shareholder who owns 100% of the shares issued by the single mining metal, a divided company, acquired the shares by allocating 100% of the shares issued by the single mining metal processing, a new company.

[2]

○ As above, the instant shares were succeeded to the Japanese metal process, which is a new company, from the Japanese metal, which is a divided company. The Japanese metal process, which is the new company, was determined to have accrued income from the “transfer” of stocks under Article 93 subparag. 10 of the Corporate Tax Act (amended by Act No. 7005 of Dec. 30, 2003 and enforced January 1, 2004; hereinafter the same) due to such succession, and paid 2,298,298,000 won in total from the Japanese metal, which is the divided company, on November 10, 2003. < Amended by Act No. 7004, Jan. 10, 2004; Act No. 754, Oct. 10, 2003>

○ 그 후 2006. 4. 1. 분할회사인 일광금속과 신설회사인 일광금속가공이, 일본 법에 의하여 설립되어 본점을 일본에 둔 주식회사 일광 마테리아르즈(주식회사 일광 マテリアルズ)에 흡수합병되었고, 위 회사가 같은 날 상호를 원고로 변경하였다.

2. The plaintiff's assertion

The shares of this case were succeeded to the mining metal processing, which is a new company, from the mining metal, a divided company, to the mining metal processing, which is the new company, due to the division of the company. As such, the income from the transfer of the shares of this case was not generated, it is null and void that the mining metal processing, which is the new company, has withheld the amount of capital gains from the mining metal, the divided company, and paid the amount to the defendant. However, since the plaintiff comprehensively succeeded to his rights and obligations by absorbing the mining metal processing, which is the new company, the defendant is obligated to return the above amount of income

3. Determination

(a) Corporate division and corporate accounting;

(1) In light of the above facts, the division of the company in this case succeeds to the business sector for metal processing of the daily metal, a divided company, in proportion to the ratio of the shares issued in the total number of total number of shares issued, to the shareholders of the daily metal, a divided company, and the shares issued in the daily metal processing, a newly incorporated company.

(2) The above corporate division is a proportional personal division. Since the company division is a proportional personal division, the company’s shareholder continuously bears the risk and filial duty of the divided company even after the division, and it cannot be deemed that there was an accounting case that should change the acquisition cost because the company is divided into multiple companies and its form is changed only, it shall not be deemed that the succeeded assets and liabilities are accounted at the book value and the disposal profit and loss are not perceived.

(3) On the other hand, a spin-off should consider that a split-off acquires the shares issued by a newly incorporated company, and that a split-off invests in kind the net assets to the newly incorporated company, assess the succeeded assets and liabilities at a fair price, and recognize the disposal profit and loss.

(4) In addition, in the case of a split-off, where the shares issued by the newly incorporated company are allocated to the shareholders of the split-off company not in proportion to their shares ratio, the remaining assets and liabilities succeeded at the fair price, as in the case of a split-off, shall be assessed at the fair price and the profits and losses from the disposal shall be recognized.

(b) Division of company and the Corporate Tax Act;

(1) According to the above facts, the division of the company of this case takes effect on October 1, 2003, and accordingly, the shares of this case were succeeded to the assets, liabilities, contractual status, and other rights and obligations related to the metal processing business sector of one metal, which is the divided company. At the time of the division of the company, the Corporate Tax Act stipulated the following as to the division of the company:

▷내국법인이 분할로 인하여 해산하는 경우, 그 청산소득 금액은 분할대가의 총합계액에서 분할법인의 자기자본 총액을 공제한 금액으로 한다 주4) .

▷인적분할에 있어, 분할법인이 존속하는 경우, 그 분할로 인하여 발생한 소득금액은 분할대가의 총합계액에서 분할로 인하여 감소한 분할법인의 자기자본 금액을 차감하여 계산한 금액으로 한다 주5) .

▷비례적 인적분할에 있어, 신설법인이 분할법인의 자산을 평가하여 승계하는 경우, 분할평가차익을 손금에 산입할 수 있다 주6) .

▷물적분할에 있어, 분할법인이 신설법인의 주식을 취득한 경우, 당해 주식의 가액 중 물적 분할로 인하여 발생한 자산의 양도차익에 상당하는 금액은 이를 손금에 산입할 수 있다 주7) .

(2) The aforementioned provisions of the Corporate Tax Act, in the case of human division, imposes the liquidation income tax on the divided company on the grounds that the divided company is legally extinguished when the divided company ceases to exist. In the case where the divided company continues to exist, the divided company is not extinguished, but the divided company acquires the shares issued by the divided company, and the divided company actually liquidates the divided portion, and thus, the divided portion is deemed to be liquidated. However, in the case of proportional human division meeting certain requirements, the taxation of the liquidation income of the divided company is mitigated, and this is imposed as the “division marginal profit” of the newly incorporated company.

(3) Meanwhile, in the case of physical division, the above provision of the Corporate Tax Act considers the economic substance as investment in kind in that the divided company acquires the shares issued by the newly established △△, and imposes the "transfer margin" calculated by the divided company in accordance with the corporate accounting standards as the income of the divided company as the income for each business year, and the liquidation income is not likely to occur according to the △△△△.

(c) Transfer under the Corporate Tax Act;

(1) According to the above facts, the division of the company of this case takes effect on October 1, 2003, and accordingly, the shares of this case were succeeded to the daily metal processing, which is an incorporated company, including assets, liabilities, contractual status, and other rights and obligations related to the metal processing business sector of the daily metal, which is the divided company. According to the Corporate Tax Act, the daily metal and the daily optical metal processing, which is the incorporated company, are all divided companies, a corporation with its head office in Japan, and is a foreign corporation).

According to the Corporate Tax Act, corporate tax is imposed on income and liquidation income for each business year. For foreign corporations, income for each business year is imposed only on income for each business year, and 9). Income for each business year of foreign corporations is income for domestic source income. As one of such domestic source income, Article 93 Subparag. 10 of the Corporate Tax Act provides for income generated from transfer of stocks issued by domestic corporations.

(2) The Corporate Tax Act provides for “transfer” of stocks as above, but does not stipulate the definition of “transfer” itself. The Income Tax Act provides that “transfer” refers to transfer of assets at a cost due to sale, exchange, investment in kind in a corporation, etc. without relation to registration or enrollment of assets.

D. Whether the shares of this case are “transfer”

(1) According to the foregoing, according to the division of the instant company, the instant shares were succeeded to the mining metal processing process, which is an incorporated company, which is included in assets, liabilities, contractual status, and other rights and obligations pertaining to the metal processing business sector of one metal, which is a divided company. The instant corporate division is proportional personal division, and the mining metal, which is a divided company, remains after the instant corporate division.

(2) As seen earlier, in the corporate accounting of △△, pro rata personal division, such as the instant corporate division, is, as seen earlier, the corporate accounting of the newly incorporated company, by acquiring shares issued by the shareholders of the newly incorporated company in proportion to each other, continuously bears the risks and benefits that the shareholders of the divided company exist in the divided company even after the split-off, and the form of the company is divided into multiple companies and the acquisition cost is changed only. In addition, in the provisions of the Corporate Tax Act, the newly incorporated company shall not be deemed to have occurred. In the case of the Corporate Tax Act, since the shares issued by the divided company are acquired by the shareholders of the divided company and the capital is not reduced from the divided company, the method of calculating the liquidation income is similar to the method of calculating the liquidation income by deeming the divided company as the actual liquidation income

In addition, as seen earlier, the Corporate Tax Act allows “division evaluation marginal profit” to be included in the deductible expenses in the personnel division of △△△, while in the case of physical division of △△, “transfer marginal profit” can be included in the deductible expenses.

(3) In full view of the corporate accounting related to the above corporate division and the definitions of the Income Tax Act concerning the "transfer", the Corporate Tax Act, in cases where the assets of a divided company are succeeded to the newly incorporated company through proportional personal division, shall be treated as the issue of liquidation income or division evaluation, and it shall not be treated as the issue of capital gains.

(4) Therefore, if the instant shares were succeeded by the process of sunlight metal, which is an incorporated company, by means of a proportional human division, to the assets, liabilities, contractual status, and other rights and obligations pertaining to the business of metal processing sector, a divided company, is not a "transfer" as provided by Article 93 subparag. 10 of the Corporate Tax Act, but merely by the proportional personal division, it is merely a conversion of the instant shares from the mining metal, the owner of which is a divided company, to the mining metal processing, the new company.

(5) In addition, according to the evidence as seen earlier, the daily optical processed metal, a newly incorporated company, judged that the instant shares were transferred “transfer” and paid securities transaction tax. At that time, the Securities and Exchange Act stipulated that the ownership is transferred at a cost due to contractual or legal grounds. In the case of a personal division, the National Tax Tribunal determined that the transfer of the instant shares is unfair on the ground that the transfer of the ownership is merely a formal ownership transfer without payment due to the fact that the transfer of the instant shares does not constitute “transfer” in light of the nature of the comprehensive succession under a contract. Such determination also is the same as the judgment of the court of this case that the instant shares transfer does not constitute “transfer” under Article 93 subparag. 10 of the Corporate Tax Act.

E. The defendant's duty to return

(1) If so, it is determined that the daily optical processed metal, a newly incorporated company, caused income from the "transfer" of stocks as stipulated in Article 93 subparagraph 10 of the Corporate Tax Act due to the succession of the stocks of this case, and that the withholding agent collected 2,298,298,000 won from the daily optical metal, a divided company, and paid it to the defendant, and the withholding agent collected and paid the tax amount on income that is not subject to withholding from the source taxpayer, and the defendant received the above tax amount without any legal ground.

(2) Therefore, the defendant is obligated to pay to the plaintiff who succeeded to his rights and obligations by absorbing the sunlight processing metal that is a newly incorporated company at the rate of 2,298,298,000 won as above and 20% per annum under the Civil Act from November 11, 2003, which is the day following the day when the payment was made, to September 10, 2009, which is deemed reasonable for the defendant to dispute as to the existence or absence of the obligation to return, and 5% per annum under the 20% per annum under the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from the following day until the day when the payment was made.

4. Conclusion

Accordingly, the plaintiff's claim of this case is accepted within the above recognition scope, and since the judgment of the court of first instance is partially unfair with its conclusion, the part against the plaintiff falling under the above recognition scope among the judgment of the court of first instance is revoked, and the plaintiff's claim corresponding to that part is accepted, and the remaining appeal of the plaintiff is dismissed as it is so decided as per Disposition.

Judges Cho Young-hee (Presiding Judge)

주1) 제373조【신설분할】회사ハ 기ノ영업ノ전부 우ハ 일부ヲ 설립スル 회사ニ 승계セシムル위 신설분할ヲ위スコトヲ득(회사는 그 영업의 전부 또는 일부를 설립하는 회사에 승계하게 하는 신설분할을 할 수 있다)

주2) 제374조ノ10【신설분할の효력】①분할ニ인リテ설립シタル회사ハ분할계획서ノ기재ニ종ヒ분할ヲ위シタル회사ノ권리의무ヲ승계ス(분할에 의하여 설립하는 회사는 분할계획서의 기재에 따라 분할을 하는 회사의 권리, 의무를 승계한다)

주3) 제374조ノ9【신설분할の효력발생시기】회사ノ분할ハ지ニ인リテ설립シタル회사ガ기ノ본점ノ소재지ニ어テ전조제1항ノ등기ヲ위スニ인リテ기ノ효력ヲ생ズ(회사의 분할은 그에 의하여 설립하는 회사가 그 본점의 소재지에 전조 제1항의 등기를 함에 따라 그 효력이 발생한다)

(1) Where a domestic corporation is dissolved due to a division, the liquidation income (hereinafter referred to as "settlement income from division") shall be the total cost of division received by stockholders of a divided corporation from a corporation established by division or a counterpart corporation to a division and merger minus the total amount of equity capital as of the date of the registration of the division of the divided corporation.

(1) In the calculation of the income amount for the business year which includes the registration date of the division of the relevant divided corporation, the income amount accruing from the division shall, notwithstanding the provisions of Article 14 (1), be an amount calculated by subtracting the amount under subparagraph 2 from the amount under the following subparagraphs under the conditions as prescribed by the Presidential Decree:

6) The amount equivalent to the division evaluation marginal profit in deductible expenses under Article 46 (1) (excluding physical division) which meets the requirements of the following subparagraphs may be included in deductible expenses in the calculation of the income amount for the business year which includes the registration date of the division under the conditions as prescribed by the Presidential Decree, where a corporation established through division or counterpart corporation to a division and merger evaluated and succeeds to the assets of a divided corporation or counterpart corporation to a division and merger, among the values of succeeded assets (limited to assets prescribed by the Presidential Decree).

(1) In case where a divided corporation acquires stocks of a corporation newly established by division or counterpart corporation to a division and merger through a physical division, and the requirements under each subparagraph of Article 46 (1) (in the case of subparagraph 2 of the same paragraph, the total amount must be stocks) are met, the amount equivalent to the transfer marginal profits from the physical division among the values of the relevant stocks may be included in deductible expenses in calculating the income amount for the business year which includes the date of the registration of the physical division under the conditions as prescribed by the Presidential Decree.

8) Subparagraph 3 of Article 1

9) Article 3(1)

10) Article 3(3)

Note 11) Article 88(1)