Seoul Administrative Court 2015Gudan53544 ( December 18, 2015)

Tax Tribunal 2014Seoul 5118 ( December 26, 2014)

The land in this case is a transfer under the Income Tax Act because the assets are actually transferred for price.

Since the land owned by the Plaintiff was transferred, and the Plaintiff received compensation therefor, the initial disposition rejecting the claim for rectification by deeming the transfer is justifiable.

Article 88 of the Income Tax Act: The time of transfer or acquisition under Article 98 of the Income Tax Act;

Seoul High Court 2016Nu32789 Revocation of Disposition Rejecting Transfer Income Tax Correction

BOO

O Head of tax office

December 18, 2015

on March 31, 2016

October 05, 2016

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

the Gu Office's place of service and place of service

1. Purport of claim

The defendant's refusal to correct the transfer income tax of KRW 7,557,353, which was paid to the plaintiff on July 23, 2014, shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. Quotation of judgment of the first instance;

The reason for this judgment is as stated in the reasoning of the judgment of the first instance, except for using the part of the judgment of the first instance (from 4, 12 to 7, up to 3) as follows in the fourth 11th of the judgment of the first instance, and the part of the judgment of the second b. of the second b. (from 4, 12 to 7, up to 3) is as stated in the reasoning of the judgment of the first instance. Therefore, it shall be cited in accordance with Article 8(2) of the Administrative Litigation Act and Article

2. Determination

A. Relevant provisions

Article 4 (1) of the former Income Tax Act (amended by Act No. 9270 of Dec. 26, 2008; hereinafter the same) provides that "the income of a resident is classified into global income, retirement income, and transfer income, and the transfer income is "income accruing from the transfer of assets" (Article 4 (1) 3). Article 88 (1) provides that "The transfer" means the transfer of assets at a cost due to sale, exchange, investment in kind in a corporation, etc., regardless of the registration or enrollment of assets."

(b) Whether compensation, etc. has accrued from the transfer of assets;

Examining the above facts in light of the relevant provisions, the Plaintiff’s compensation and the money received as a result of the adjustment decision on the land of this case from Overcheon City (hereinafter “compensation, etc.”) constitutes income accrued from the transfer of assets, and thus, the Plaintiff’s above assertion is without merit.

① The main text of Article 88(1) of the former Income Tax Act provides that “transfer” means that an asset is actually transferred for price due to sale, exchange, investment in kind in a corporation, etc., regardless of the registration or enrollment of the asset, and a contract, such as sale and purchase, which is the cause of the transfer for price, is not required to be legally effective (see Supreme Court en banc Decision 2010Du23644, Jul. 21, 201).

② The ownership of the pertinent land was finally reverted to an excessive city. The Plaintiff, after receiving compensation from an excessive city, received additional compensation after undergoing a lawsuit, and thereby gaining compensation for the transfer of ownership of the instant land, has the economic benefits accrued from both parties’ performance. The amount of compensation, etc. for the instant land was the same as the sales amount recognized, if the price of the instant land was determined at a proper level from the beginning.

③ If the cancellation of a contract by mistake does not recognize the return of the original claim, but only the return of the original claim is recognized, the Plaintiff, after removing the facilities of the instant land and receiving the return of the original claim until the later consultation procedure, had the right to receive compensation. The same applies to the Plaintiff, who had an objection only to the amount of compensation for the instant land from the first time to the acquisition of the instant land (i.e., seeking restitution of unjust enrichment, preliminary restitution). However, even though the Plaintiff had an objection only to the amount of compensation for the instant land (i.e., seeking restitution of unjust enrichment, preliminary restitution), it appears to have brought a lawsuit seeking the return of unjust enrichment along with the cancellation of the sales contract, due to the lack of the form of lawsuit seeking the return of the original claim; (ii) the Plaintiff’s intention to seek additional payment rather than the return of the original claim; and (iii) the Plaintiff’s intention to obtain additional payment of compensation for the land at the first time to the first instance trial; and (iv) the Plaintiff and the Plaintiff’s previous agreement on the completion and ratification of the sales contract can be deemed as valid.

④ In comparison with the case where the Plaintiff entered into a contract for consultation and sales with a reasonable price as to the land at issue of this case, the Plaintiff’s result in the Plaintiff’s enjoyment of gains from transfer without taxation is contrary to tax justice and equity (the first instance court held that the year to which transfer income tax on the land at issue of this case belongs to the year 2015, which was paid in accordance with the instant conciliation decision, is subject to transfer income tax for 2015, and thus, it does not allow the Plaintiff to enjoy gains from transfer without taxation. However, in calculating gains from transfer of assets under Article 98 of the former Income Tax Act and Article 162(1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 20931 of Jul. 24, 2008), the time of acquisition and transfer shall be deemed to be the date of receipt of registration recorded in the register if the transfer registration was made before the settlement of the price, and thus, the date of transfer registration for each of the land at issue of this case shall be deemed to be the year to which belongs.

3. Conclusion

The plaintiff's claim is dismissed due to the lack of reason, and the judgment of the court of first instance is unfair with different conclusions, so the judgment of the court of first instance is revoked and the plaintiff's claim is dismissed.