Plaintiff

The Director of Gangnam District Office

April 6, 2010

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the plaintiff.

The Defendant’s disposition of imposition of KRW 419,262,930 on February 6, 2009 against the Plaintiff was revoked.

1. Details of the disposition;

A. On October 30, 1989, the Plaintiff: (a) from Nonparty 3, Nonparty 285.3 square meters in Gangnam-gu, Seoul ( Address 1 omitted; (b) and 109.02 square meters in its ground (hereinafter “instant site 1”); (c) the Plaintiff combined this with the instant site 1; and (d) jointly (i) Nonparty 1 (OOB) with Nonparty 1 (OB) on the same day, the Plaintiff acquired the instant real estate 282.3 square meters in Gangnam-gu, Seoul ( Address 2 omitted; hereinafter “instant site 2”); and (ii) the building 108.8 square meters in its ground (hereinafter “former building”) from Nonparty 3; and (iii) the building 2 of this case’s site and the building 2 of this case’s building.

B. The plaintiff and the non-party 1 (the non-party 1) newly constructed and owned (the plaintiff 9/10 shares, the non-party 1 (the non-party 1)'s shares, and the non-party 1/10 shares, the non-party 1 (the non-party 1)'s shares, and the non-party 1/2's shares, on August 28, 2006, on the ground of the non-party 1 and 2's ground and the non-party 1 (the non-party 1/10 shares, the non-party 1 (the non-party 1/10 shares, and the non-party 1/10 shares) on the non-party 1 and 2's ground. The plaintiff and the non-party 1 (the non-party 1 and the non-party 2) transferred the building in 4,50,000,000.

C. On June 30, 2006, the Plaintiff: (a) 4,500,000,000, acquisition value and other necessary expenses (the total acquisition value of real estate 1,200,000,000,000,000) in the actual transaction with respect to the transfer of the instant real estate on June 30, 2006; and (b) 4,100,000,000,000 (the total acquisition value of real estate 1,20,000,000,000,000,000,000, for the construction cost of the instant building; and (c) 900,000,000,000,000,000,000,000,0000,000 for the construction cost of the instant building; and (c) 10,000,000,000 won for other necessary expenses).

D. After that, the Defendant recognized the transfer value of the instant real estate as KRW 4,50,000 according to the notice of tax investigation by the director of the Seoul Regional Tax Office. However, on February 6, 2009, the acquisition value and other necessary expenses of the instant land were unclear, and on the ground that there was no data to recognize the expenses for new construction and remodeling of the instant building, the acquisition value of each of the instant land was KRW 1,179,00,000,000, which is the aggregate of the standard market price conversion amounts; and on the balance sheet submitted at the tax office at the time of filing the global income tax return in 1995, the new construction costs of the instant building were assessed as KRW 1,039,00,000,000, respectively; and on February 6, 2009, recognized the transfer of one house for one household of high-priced house after removing the expenses for remodeling, and corrected and notified the instant disposition to revert the said amount to the Plaintiff for 1,2006.

[Ground of recognition] Facts without dispute, Gap evidence 1, 8, 10, 13 evidence, Eul evidence 1 through 3, Eul evidence 8-1 and 2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

(1) On April 28, 2006, the Plaintiff: (a) at the time of transferring the instant real estate to Estecom at KRW 4,500,000,000; (b) even though the Defendant decided to transfer the instant building at KRW 2,50,000,000, the total amount of the land for KRW 2,500,000; and (c) even though the Defendant did not recognize the actual transaction value of the instant building and the building, it was unlawful to calculate the amount calculated based on the ratio of the actual transaction value of the instant real estate to the standard market value of each of the said real estate to the total amount of the standard market value of each of the said real estate.

(2) On October 30, 1989, the Plaintiff, who runs the stone wholesale business in the trade name of “Ydong Unemployment”, acquired each of 1/2 shares of the instant real estate from Nonparty 3 to KRW 820,000,000 (the sale price of KRW 775,000,000 + the additional cost of KRW 40,000) on the same day, jointly with Nonparty 4 on October 30, 1989, in order to establish an office and a stone exhibition center. Since the Plaintiff planned to immediately remove the previous building and build a new building after acquiring each of the instant real estate at the time, all of the Plaintiff’s purchase price of the instant real estate should be recognized as the acquisition price of the instant building site.

(3) Since the Plaintiff acquired real estate Nos. 1 and 2 of this case jointly with Nonparty 1 (O.S.) and contracted construction price of KRW 1,600,00,000 to Nonparty Jinjin Development Co., Ltd. for the removal of the instant and the construction of the instant building, the Plaintiff’s construction cost of KRW 1,60,000,000 should be recognized as acquisition price.

(4) The Plaintiff newly constructed the instant building in collaboration with Nonparty 1 (Outboard Person) and used it as a stone exhibition, storage, storage, etc., but due to the civil petition filed by neighboring residents, the Plaintiff should be recognized as capital expenses of KRW 900,00,000 for the construction cost to Hosan Construction Co., Ltd. around August 1995, as a studio, the first and the second floor exhibition, the reconstruction of the apartment as a studio, the alteration of the internal structure of the 6th floor, and the alteration of the internal structure of the 6th floor and the extension of 62.4 square meters of the 62.4 square meters of the 7th floor (house 40.6 square meters).

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) The actual transfer value and actual acquisition value of the instant real estate

(A) General theory on actual transaction amount

According to Articles 94(1), 96(1), 97(1)1(a) and (b), 100(1), and 114(5) of the former Income Tax Act (amended by Act No. 7873, Mar. 3, 2006; hereinafter the same), the transfer value and acquisition value shall be calculated on the basis of standard market price in calculating gains on transfer of real estate: Provided, That in cases where a real transaction is reported on the basis of actual transaction value, the transfer value, etc. shall be calculated on the basis of the actual transaction value. In such cases, where the actual transaction value at the time of acquisition cannot be confirmed, the acquisition value shall be calculated by applying the transaction example prescribed by the Presidential Decree, appraisal value, or conversion value in sequence. Furthermore, since the actual acquisition value of the relevant asset, which serves as the basis for calculating the transfer income tax, refers to the value objectively recognized by the sales contract and other evidential documents, the actual transaction price shall be determined on the basis of the transaction price and the certificate of personal seal impression, etc.

(B) Whether it is legitimate to calculate the actual transfer value of the real estate Nos. 1 and 2 of this case and the building of this case, which constitutes the real estate of this case, based on the conversion value (i.e., whether the actual transfer value of the real estate Nos. 1 and 2 of this case and the building of this case was 2.5 billion won and

1) Therefore, as alleged by the Plaintiff, it is difficult for Nonparty 2 to newly construct the instant building on April 28, 2006 at KRW 20,00,000,000 for KRW 2,50,000 as at the time of transfer of the instant real estate to Nonparty 1, 200,000,000 for KRW 20,000,000 for the aggregate of KRW 1,50,000 for KRW 206,00 for each of the instant building, the Plaintiff’s appraisal price of KRW 1,50,000 for KRW 20,000 for KRW 20,00 for each of the instant real estate at KRW 1,50,000 for KRW 20,00 for KRW 30,00 for each of the instant construction sites, as otherwise alleged by the Plaintiff. However, in light of the following facts, the Plaintiff’s assertion that the instant real estate price was KRW 1,000,000 for KRW

2) However, according to Article 100(2) of the former Income Tax Act, Article 166(4) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19463, Apr. 28, 2006; hereinafter the same), Article 48-2(4) proviso and Article 48-2(1) of the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 19463, Apr. 28, 2006; hereinafter the same), if the distinction between the value of the land and the building is unclear, the disposal of the real estate shall be calculated in proportion to the value calculated according to the standard market price as of the date of transfer contract under Article 48-2(4) proviso and 1 of the Enforcement Decree of the Value-Added Tax Act. Thus, since the real estate price of each of the above real estate should be calculated in proportion to the actual standard market price of each of the above real estate in accordance with Article 100(2) of the former Income Tax Act.

(C) Whether the actual acquisition value of real estate Nos. 1 and 2 of the instant case is KRW 1,635,00,000

1) Therefore, on October 30, 1989, the Plaintiff’s share of KRW 820,00,00 from Nonparty 3 as well as KRW 815,00,00 of the instant real estate from Nonparty 4 on the same day, and KRW 2815,00,00 of the instant real estate from Nonparty 4 ( + KRW 775,00,000 of the purchase price + additional cost of KRW 40,000) were acquired respectively, 1/2 shares of each of the instant real estate sales contract and receipts (Evidence 3-1,2,3 of the evidence) submitted by the Plaintiff as documentary evidence on the actual acquisition price. However, in light of the above circumstances acknowledged by Nonparty 3, the Plaintiff’s share of KRW 13,00,00 and KRW 20 of the instant real estate sales contract and KRW 500,000,00 of the instant real estate, the Plaintiff’s share of KRW 300,700,00 each of the instant real estate sales contract and KRW 407.

2) Therefore, in the instant case where there is no transaction example example or appraisal value that can be the basis for calculating the acquisition value of real estate 1 and 2 in the Plaintiff’s assertion as the acquisition value of real estate 1 and 2 in the instant case, each acquisition value shall be subject to the application of the values converted under Article 114(5) of the former Income Tax Act and Article 176-2(2)2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19463, Apr. 28, 2006; hereinafter the same), and thus, the Defendant’s disposition of this case calculated based on the above conversion acquisition value is lawful. Therefore, the Plaintiff’s above assertion is difficult to accept.

(2) Whether the construction cost of the instant building is KRW 1,600,000,000

(A) The tax authority bears the burden of proving the legality of taxation, including the capital gains tax base, and the tax base is the tax authority's burden of proving necessary expenses in principle, since the tax base is the tax authority's burden of proving necessary expenses is deducted from the transfer value. However, the expenses for the new construction of the building of this case claimed by the plaintiff are favorable to the plaintiff in calculating the capital gains tax, since the basic facts are located within the controlled area of the plaintiff, and it is difficult for the tax authority to investigate the defendant as the defendant as the defendant, while it is easy for the plaintiff as the plaintiff to prove, so such necessary expenses are in accord with the principle of fairness (see Supreme Court Decision 86Nu1

(나) 그러므로 원고가 소외 1(대판:소외인)과 공동으로 이 사건 제1, 2 부동산을 취득한 후 소외 형진개발 주식회사에게 공사대금 1,600,000,000원에 이 사건 제1, 2 구 건물들의 철거와 이 사건 건물의 신축을 도급하였는지 여부에 대하여 살피건대, 이에 부합하는 증거로는 원고가 제출한 공사도급계약서(갑 제6호증), 의견서(갑 제9호증)가 있으나, 갑 제13호증, 을 제3호증의 각 기재 및 변론 전체의 취지에 의하여 인정되는 다음과 같은 사정들 즉, 원고는 종래 부동산임대업을 하면서 과세특례자로 있다가 1995년 일반과세자로 전환되면서 세무사에게 의뢰하여 1995년도 종합소득세 신고를 하게 되었는데 당시 세무사가 이 사건 건물의 실제 건축면적 2,411.4㎡에서 원고가 운영하던 영동실업의 사무실 및 석재 전시장, 주택 등의 용도로 사용하던 부분 1,039.929㎡를 제외한 나머지 1,371.471㎡을 기준으로 안분계산 한 909,000,000원(≒1,600,000,000원×1,371.471/2,411.4)을 건물가액으로 대차대조표에 기재하였다가 2005년도 대차대조표에 나머지 건물가액 7억 원을 추가로 반영하게 된 것이므로, 실제 건물가액은 신축공사 대금 1,600,000,000원 상당이라고 주장하나, 이에 부합하는 갑 제9호증(의견서)의 기재는 (주)종합건축사사무소 명가가 2008. 9. 17.경 현장실사를 하고 도면을 작성한 후 신축에 소요된 건축비 예상가액을 추정하여 산정한 것으로서 그 건축비 산정시점이 건축 당시인 1991.경인지 여부가 명확하지 않을 뿐만 아니라 그 자체로 건축비에 대한 예상가액에 불과하여 이를 그대로 신뢰하기는 어렵고, 갑 제15 내지 17호증의 각 기재만으로는 이를 인정하기에 부족하며, 달리 이러한 원고 주장을 인정할 별다른 자료가 없다는 점, 일반적으로 상업용 건물의 건축비용은 주택 및 아파트 건축비용에 비하여 상당히 낮은데, 원고가 제출한 위 공사도급계약서에 기재된 평당 건축비용은 260만 원으로서 국토해양부 장관이 고시한 1991년도 16층 이상 고층아파트 평당 표준건축비 147만 원의 1.5배를 초과한다는 점, 이 사건 건물의 신축공사 대금이 1,600,000,000원으로 상당한 거액임에도 실제 그 지급이 이루어졌음을 인정할 객관적인 금융자료, 영수증 등이 전혀 없다는 점, 위 건물의 신축공사 수급인인 소외 형진개발 주식회사가 1993. 4. 9. 폐업하여 세금계산서 수수 등의 사실 여부도 확인하기 어렵다는 점 등에 비추어 보면, 위 서증들(공사도급계약서, 의견서)의 기재 내용은 쉽사리 믿기 어렵고, 달리 원고가 주장하는 바와 같은 공사대금 액수를 인정할 증거가 없다.

(C) Therefore, since the Plaintiff’s assertion of KRW 1,60,00,00 as the cost of the new construction of the building of this case cannot be confirmed as the actual transaction amount, in this case where there is no transaction example or appraisal value that can be the basis for calculating the acquisition value of the building of this case, the actual acquisition value shall be applied to the value converted under Article 114(5) of the former Income Tax Act and Article 176-2(2)2 of the former Enforcement Decree of Income Tax Act (amended by Presidential Decree No. 19463, Apr. 28, 2006; hereinafter the same shall apply) by applying the acquisition value of the building of this case to the acquisition value of the building of this case (new construction cost of this case) calculated by the Defendant’s 909,00,000 won on the balance sheet at the time of filing the global income tax return of 195,000 won to 1,039,000 won by applying the acquisition value of the building of this case to 90.

(3) Whether the remodeling cost of the instant building is KRW 900,000,000

(A) As seen in paragraph (2) above, interpreting necessary expenses necessary for calculating the capital gains tax as the exception to the burden of proof that the Plaintiff, a taxpayer, needs to be proven is consistent with the principle of fairness (see, e.g., Supreme Court Decision 86Nu121).

(B) Therefore, according to the following circumstances, it is difficult for the Plaintiff to find that the construction cost of the instant building was increased to KRW 90,000,00 after construction of the instant building on August 195, 195, the construction cost of KRW 200,00,00,00, and as evidence corresponding thereto, the construction contract was submitted by the Plaintiff. However, under the overall purport of evidence No. 13 and evidence No. 3, there is no objective financial data, receipt, etc. to recognize that the construction cost of the instant building was actually increased to KRW 90,00,00,000, and it is difficult to find that the construction cost of the instant building was actually paid to KRW 700,000,000,000,000,000,000,000,0000,000,000,000,000,000,000,00,000,00.

(C) Therefore, it seems reasonable that the Defendant did not recognize the cost of remodeling construction of the instant building as the acquisition value, and thus, it is difficult to accept the Plaintiff’s above assertion contrary thereto.

3. Conclusion

Therefore, the plaintiff's claim of this case seeking the revocation of legitimate disposition of this case is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment Related Acts and subordinate statutes omitted]

Judges Full Order