2. The costs of lawsuit are assessed against the defendant.

A. On December 31, 1966, the Plaintiff acquired and owned “the instant land” and transferred it to 00 April 1, 2004, and on June 30, 2004, after transferring it to 00, the Plaintiff made a preliminary return on the tax base of transfer income with the transfer value of 1.38 billion won and the acquisition value of 497 million won based on the actual transaction value, and made a preliminary return on the tax base of transfer income with the tax base of 1.71,427,690 won. Accordingly, the Plaintiff voluntarily paid each income tax of 171,427,690 won.

B. Thereafter, the Defendant confirmed that the transfer value of the instant land was 1.8 billion won, and notified the original High Court on May 17, 2005 that it imposed capital gains tax of 83,505, and 960 won for the year 2004, and the Plaintiff received the notification on May 25, 2005. On May 30, 2005, the Plaintiff filed a final return on the tax base of capital gains tax after calculating the transfer gains of the instant land as the standard market price, and voluntarily paid capital gains tax of 14,61,270 won.

C. However, without recognizing the plaintiff's final return on the tax base of transfer income on May 30, 2005, the defendant made a preliminary return on the tax base of transfer income pursuant to Articles 96 (1) 6 and 97 (1) 1 (a) of the former Income Tax Act without recognizing the plaintiff's final return on the tax base of transfer income on May 30, 2005, but the return on the tax base of transfer income was different from the fact, and thus, it is possible to correct both tax base and tax amount by using the transfer value confirmed under the proviso of Article 114 (4) of the former Income Tax Act as the transfer value confirmed under the proviso of Article 114 (4) of the former Income Tax Act, and issued the disposition of this case where the transfer value was 1.83,505,960 won for the transfer income tax on June 1, 2005 and notified the correction of the tax base of transfer income for 83,505,960 won. [The grounds for recognition]

2. Whether the disposition is lawful; and

A. The plaintiff's assertion

Even if the Plaintiff made an estimated return on the tax base of transfer income on the land of this case based on the actual transaction value, at any time until the final return is made, the final return on the tax base of transfer income may be made on the basis of the standard market price, and accordingly, so long as the final return on the tax base of transfer income was made on the basis of the standard market price, it cannot be deemed as the case where the return is made on the basis of the actual transaction value under Article 96 (1) 6 of the former Income Tax Act (amended by Act No. 7837, Dec. 31, 2005; hereinafter referred to as the “former Income Tax Act”), and it does not constitute a case where the transfer margin should be calculated on the basis of the standard market price. Accordingly, the transfer margin on the land of this case shall be calculated on the basis of the standard market price.

(b) Related statutes;

As shown in the attached Form.

C. Determination

(1) Under the former Income Tax Act, gains from the transfer of land shall be calculated based on the standard market price. However, in exceptional cases such as where the transferor files a return on the actual transaction price at the time of the final return along with documentary evidence, etc., the transfer margin shall be determined based on the actual transaction price (main sentence and proviso of Article 96 (1) and Articles 96 (1) 6 and 97 (1) 1 (a) of the former Income Tax Act), and in cases where there are omissions or errors in the details of the preliminary or final return on the tax base of transfer income, the tax authority may correct the transfer margin and the tax amount if there are omissions or errors in the details of the preliminary or final return on the tax base of transfer income. In this case, the transfer margin shall be governed by Articles 96 and 97 (1) 6 of the former Income Tax Act, and Article 97 (1) 1 (a) of the former Income Tax Act shall be reported by the transferor along with documentary evidence within the final return date, and where the tax authority verifies the actual transaction price different from the actual transaction price.

(2) According to the aforementioned factual basis, the Plaintiff’s preliminary return on the tax base of transfer income of the land of this case based on evidentiary documents pursuant to Articles 96(1)6 and 97(1)1(a) of the former Income Tax Act, but the tax authority confirms the actual transaction value different from the actual transaction value. However, the transfer income tax is subject to the principle of fixed-term taxation by calculating the tax base and tax amount and filing a comprehensive return of the transfer income generated during the pertinent taxable period. The specific tax liability becomes final by adding up all the transfer income generated during the pertinent taxable period, even in the light of the implementation of the preliminary return, the disposition should be deemed unlawful by the Defendant’s tax base and tax amount under the proviso of Article 110(4) of the former Income Tax Act, Article 173(4)1 through 3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 18705, Feb. 19, 2005). Therefore, if the Plaintiff’s final return becomes final and conclusive based on the tax base and standard market price determined within 20.

3. Conclusion

Therefore, the plaintiff's claim seeking the cancellation of the disposition of this case is accepted for reasons.

former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005)

Article 94 (Scope of Capital Gains)

(1) Transfer income shall be the following incomes generated in the relevant year:

1. Income accruing from transfer of land (referring to a lot of land subject to registration of land category in the cadastral record under the Cadastral Act) or buildings (including facilities and structures annexed to the buildings);

Article 95 (Capital Gains Amount)

(1) The transfer income amount shall be the amount obtained by deducting the special long-term holding deduction amount from the amount (hereinafter referred to as "transfer margin") obtained by deducting the necessary expenses pursuant to Article 97 from the total gross income amount of transfer income as prescribed in Article 94 (hereinafter referred to as "transfer value").

Article 96 (Transfer Value)

(1) The transfer value of assets referred to in Article 94 (1) 1 and 2 shall be based on the existing market value at the time of transfer of the relevant assets: Provided, That where the relevant assets fall under any of the following subparagraphs, it shall be based on the actual transaction value between the transferor and transferee (hereinafter referred to as “actual transaction value”):

5. Where real estate is acquired or transferred by illegal means, such as preparation of a false contract or a false transfer of resident registration, which meets the standards as determined by the Presidential Decree;

6. Where the transferor reports the actual transaction price at the time of transfer and acquisition to the head of tax office having jurisdiction over the place of tax payment within the due date of final return under Article 110 (1), together with documentary evidence

Article 97 (Calculation of Necessary Expenses for Capital Gains)

(1) In calculating gains on transfer of a resident, necessary expenses to be deducted from the transfer value shall be as follows:

1. Acquisition value:

(a) In case of assets as prescribed in Article 94 (1) 1 and 2, the base market price at the time the assets are acquired: Provided, That in case where the assets concerned fall under any of subparagraphs of Article 96 (1), it shall be based on the actual transaction price which is required to be filed for the acquisition of such assets;

(5) Matters necessary for calculation of necessary expenses such as the scope of actual transaction price required for acquisition, calculation of gift tax amount, etc. shall be prescribed by the Presidential Decree.

Article 98 (Time of Transfer or Acquisition)

In calculating gains on transfer of assets, the time of acquisition and transfer shall be determined by Presidential Decree.

Article 99 (Assessment of Standard Market Price)

(1) The standard market price pursuant to the provisions of the main sentence of Article 96 (1), the main sentence of Article 97 (1) 1 (a), Articles 100 and 114 (5) shall be as follows:

1. Land or buildings under the provisions of Article 94 (1) 1:

(a) Land;

The officially assessed individual land price under the Act on the Publication of Land Prices and the Evaluation of Land, etc. (hereinafter referred to as the “officially assessed individual land price”); the price of land which has no officially assessed individual land price shall be the amount appraised by the method as determined by the Presidential Decree, taking into account the individual officially assessed land prices in the vicinity of the place of tax payment, and in the areas as prescribed by the Presidential Decree, in which the land prices rise rapidly, the price assessed by the multiple

Article 105 (Preliminary Return of Tax Base of Transfer Income)

(1) A resident who transfers assets as prescribed in subparagraphs of Article 94 (1) shall report the tax base of transfer income calculated under Article 92 (2) to the chief of the district tax office having jurisdiction over the place of tax payment within the period classified in the following subparagraphs under the conditions

1. Two months from the last day of the month in which the transfer date belongs in cases of transfer of assets under Article 94 (1) 1, 2 and 4: Provided, That it shall be two months from the last day of the month in which the permission for a land transaction contract is granted in cases of transfer of land located in a zone subject to permission for a transaction contract under Article 117 (1) of the National Land Planning and Utilization Act;

제106조 ( 예정신고자진납부 )

(1) When a resident makes a preliminary return, he shall pay the tax amount reduced or exempted under the Restriction of Special Taxation Act and other Acts, and the tax amount reduced or exempted under Article 108 and the tax amount deducted for preliminary return and payment under Article 108, to the competent district tax office having jurisdiction over the place of tax payment,

(2) The payment under paragraph (1) shall be made voluntarily by a preliminary return.

Article 110 (Final Return on Tax Base of Transfer Income)

(1) Any resident having any transfer income amount in the current year shall make a return on the tax base of transfer income to the chief of the tax office having jurisdiction over the place of tax payment from May 1 to 31 of the year following the current year (from May 1 to 31 of the year following the year to which the date of permission for land transaction contract belongs, in cases falling under the proviso of Article 105 (1) 1 belongs) as prescribed by the Presidential Decree.

(2) The provisions of paragraph (1) shall apply even when there is no tax base in the current year or there is a deficit amount.

(3) Any report on tax base of transfer income under paragraph (1) shall be filed by the final tax return.

(4) Notwithstanding the provisions of paragraph (1), any person who has made the preliminary return may not make the final return on such income: Provided, That the same shall not apply to cases where the preliminary return on assets subject to progressive rates in the current year is made two or more times, etc., as prescribed by the Presidential Decree.

(5) In filing the final return, the documents necessary for the calculation of the transfer value and necessary expenses which form the basis of the calculation of transfer income amount, as prescribed by the Presidential Decree, shall be submitted to the chief

(6) Where there are deficiencies or errors in the reports and other documents submitted under paragraph (5), the chief of the competent district tax office having jurisdiction over the place of tax payment may request them to correct them.

Article 11 (Final Return for Voluntary Payment)

(1) A resident shall pay the amount obtained by deducting the tax amount reduced or exempted and the tax amount deducted from the tax amount for transfer income on the tax base in the current year, to a national bank or a post office which has made the tax amount at the district tax office having jurisdiction over the place of tax payment by the due date for final return under the provisions of Article 110 (1) (including Article 74 (1) through

(2) The payment as referred to in paragraph (1) shall be made voluntarily by final return.

(3) In the final return, if there is any calculated tax amount on the preliminary return as provided in Article 107, the determined or adjusted tax amount as provided in Article 114, or the occasional tax amount as provided in Articles 82 and 118, it shall be paid by deducting the calculated tax amount on the final return.

Article 114 (Determination, Revision and Notification of Tax Base for Transfer Income and Amount of Tax)

(1) If a person liable to make a preliminary return under Article 105, or a person liable to make a final return under Article 110 fails to make such return, the chief of the district tax office or the director of the regional tax office having jurisdiction over the place of tax payment shall determine the tax base and the

(2) If any omission or error is found in the details of return filed by a person who files a preliminary return under Article 105 or a person who files a final return under Article 110, the chief of the district tax office or the director of the regional tax office having jurisdiction over the place of

(3) If any omission or error is found in the decision or rectification of the tax base of transfer income and the tax amount, the superintendent of the regional tax office having jurisdiction over the place of tax payment shall immediately correct it again.

(4) Where the chief of the district tax office or the director of the regional tax office having jurisdiction over the place of tax payment determines or revises the transfer income tax, the standards and amount of tax under Articles 96 and 97, he shall do so on the basis of the value under Articles 96 and 97: Provided, That in case where a resident makes a preliminary return on the transfer income tax base, or a final return under Articles 96 (1) 6 and 97 (1) 1 (a) (proviso), and such returned value is different from the fact, if the head of the district tax office having jurisdiction over the place of tax payment or the director of the regional

(5) In the application of the provisions of paragraph (4), in case where the transfer value or acquisition value is based on the actual transaction value and it is impossible to recognize or confirm the actual transaction value at the time of transfer or acquisition of the relevant assets by the books or other documentary evidence on the grounds as determined by the Presidential Decree, the quantity of the transfer value or acquisition value may be determined or corrected by making an estimated investigation in accordance with the transaction example value, appraisal value, conversion value (referring to the acquisition value converted from the actual transaction example value or appraisal value by the method

(1) Enforcement Decree of the former Income Tax Act (amended by Presidential Decree No. 18705 of Feb. 19, 2005)

Article 162-2 (Transfer Value)

(1) Deleted. < by Act No. 6297, Dec. 29, 2000>

(2) The cases where the transfer value of assets is based on the actual transaction value under Article 96 (1) 5 of the Act shall be the cases falling under any of the following subparagraphs, where real estate is acquired or transferred by unlawful means, such as preparation of a false contract or a false transfer of resident registration:

1. Where real estate has been traded in violation of the Act on the Registration of Real Estate under Actual Titleholder’s Name;

2. Where a broker under the Real Estate Brokerage Act transfers the real estate which he has directly acquired in violation of the same Act;

3. Racing that has been transferred by acquiring real estate under a minor’s name (excluding the acquisition by an inheritance or donation),

4. Where a member of a household has transferred or acquired a real estate three times or more within a year retroactive from the date of transfer, and the total amount of actual transaction values is not less than 300 million won.

5. The termination in case where the transfer margin based on the standard market price by each transaction unit is 100 million won or more.