Seoul Administrative Court 2015Guhap70928 ( October 22, 2016)

On the condition that a lawsuit is withdrawn, the amount of low-price purchase shall not be deemed an honorarium for the commercial buildings purchased at low price.

(1) The substance of the instant money does not constitute business income or other income since it constitutes the amount of compensation for losses, etc. incurred by the delay in the extension of the instant commercial building to the Plaintiff rather than the honorarium paid in return for the withdrawal of the ownership transfer registration lawsuit.

2016Nu5579 and revocation of the detailed global income and disposition

xAA

BB Director of the Tax Office

July 22, 2016

January 12, 2017

January 26, 2017

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

1. Purport of claim

The imposition of global income tax of KRW 00,000 (including additional tax) for the year 2012 against the Plaintiff on August 1, 2014 shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Quotation of judgment of the first instance;

The reasoning of the judgment of this court is to dismiss the "Class 8" under the third letter of the judgment of the court of first instance, and the judgment of the appellate court on the plaintiff's argument is identical to the ground of the judgment of the court of first instance except for the addition of the judgment of the appellate court as stated in the following 2. Thus, it shall be cited in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the

2. Judgment on the defendant's argument on appeal

A. The assertion that the money of this case constitutes business income

The Defendant asserts to the effect that the instant money constitutes business income under Article 51(3)4 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 24356, Feb. 15, 2013; hereinafter the same).

Article 51 (3) of the Enforcement Decree of the Income Tax Act provides that "the calculation of the amount of gross income on the business income shall be calculated in accordance with the following subparagraphs," and subparagraph 4 provides that "the value of assets received without compensation in connection with the business and the amount of reduced liabilities due to the exemption from or expiration of debts shall be included in the amount of gross income: Provided, That this shall not apply to the case of Article 26

Whether business income constitutes business income under Article 51(3) of the Enforcement Decree of the Income Tax Act ought to be determined according to the ordinary social norms, taking into account the existence of the business profit purpose, the scale, frequency, and mode of the business (see, e.g., Supreme Court Decision 88Nu8753, Mar. 28, 1989).

In this case, the Plaintiff’s activities related to the occurrence of the instant money are only agreed on January 30, 2012, and even if the Plaintiff is a person who is running a medical business through the operation of Hanwon, it is difficult to see that the Plaintiff received the instant money free of charge in relation to the Plaintiff’s business. Accordingly, it cannot be deemed that the instant money is business income.In conclusion, the Defendant’s assertion that the instant money is business income is based on the premise that it is business income is not reasonable.

B. The assertion that the money of this case constitutes other income

The Defendant asserts to the effect that the instant money constitutes other income under Article 21(1)10 of the Income Tax Act (amended by Act No. 11611, Jan. 1, 2013; hereinafter the same).

Article 21 (1) of the Income Tax Act provides that "other income is income other than interest income, dividend income, business income, labor income, annuity income, retirement income, and capital gains, which are stipulated in the following subparagraphs", and Article 41 (7) of the Enforcement Decree of the Income Tax Act provides that "the penalty and compensation that are paid due to a breach or cancellation of a contract" refers to "the compensation that is paid due to a breach or termination of a contract on the property right (including the compensation that is paid due to a delay of the payment of insurance money, even if the cause for the payment of insurance money occurs)" refers to the compensation that is paid due to a breach or termination of a contract on the property right (including the compensation that is paid due to the delay of the payment of insurance money), and regardless of the name thereof,

In such cases, if the value of money, etc. returned due to a breach or cancellation of a contract does not exceed the total amount paid initially according to the contract, it shall not be deemed the value of money, etc. exceeding the damage to the payment itself.

In light of the fact that the instant money is aimed at compensating the Plaintiff for the damages incurred by the selling company due to its failure to implement the instant modified agreement, and even if each transfer registration of ownership under Articles 402-1 and 402-2 of the Commercial Building was made based on the agreement on January 30, 2012, the content of the agreement itself is required to have the selling company implement the instant modified agreement and compensate the Plaintiff for the damages caused by its failure to perform the present agreement, it can be deemed that the instant money is a penalty or compensation arising from the instant modified agreement between the Plaintiff and the selling company. However, the agreement on January 30, 2012 can be deemed that the selling company did not perform the instant modified agreement and agreed on it. Accordingly, it cannot be deemed that the Plaintiff paid the money exceeding the total amount of the money paid by the selling company due to the agreement on January 30, 2012.

Ultimately, the defendant's assertion on this part is without merit.

3. Conclusion

Since the judgment of the first instance is justifiable, the defendant's appeal is dismissed as it is groundless.