Plaintiff (Law Firm International, Attorney Yellow Jin-soo, Counsel for the plaintiff-appellant)

Kim Jong-soo

April 20, 2011

Changwon District Court Decision 2010Guhap14 Decided July 8, 2010

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's refusal to correct the capital gains tax against the plaintiff on January 28, 2009 shall be revoked.

1. Details of the disposition;

A. On March 29, 1997, the Plaintiff, the husband of Nonparty 1, obtained from Nonparty 1, who was the husband, for inheritance the land of 7,266 m2,34 m2,34 m2,000 m2,000 m2,000 m2,000 m2,017 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,510,000 m2,000 m2,510,000 m2.

B. On February 28, 2008, the Plaintiff paid the transfer value of KRW 2,510,000,000 and the acquisition value of KRW 261,025,10 as transfer income tax and KRW 523,380,250 calculated by applying the general tax rate as transfer income tax. On May 27, 2008, the Plaintiff paid the remainder after deducting the special deduction for long-term holding from the special deduction for long-term holding and deducting the tax amount calculated by applying the heavy taxation rate.

C. After that, on January 22, 2009, the Plaintiff filed a request for reduction or correction on the ground that “The instant land cannot be deemed land for non-business use because the statutory construction permit was limited from the date of acquisition to the date of transfer,” and that “the refund of KRW 782,043,862 out of the already paid tax amount shall be changed,” but the Defendant rendered the instant disposition rejecting the request for reduction or correction on January 28, 2009, on the ground that “The period during which the instant land was used for business use shall not meet the standards for the period corresponding to the land for business use on January 10, 2008.”

[Ground of recognition] Facts without dispute, entry of Gap 1 and 2 evidence, purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The instant land is an area where the Gyeongnam-do promoted flood control plans are established for habitual flood damage areas. In fact, it functions as a reservoir for controlling the internal waters of the Yancheon-do, and at the time of development activities, the Plaintiff was subject to restrictions on the rights to the development activities as the owner, such as restrictions on the use from the time it was acquired by inheritance to the time it was obtained permission for development activities. Thus, it should be excluded from non-business land. However, the Defendant’s disposition excluding only the period from the time when the application for permission for development activities was rejected by the Plaintiff from the time when the application was rejected by Nonparty 2 and 3, who obtained the approval from the Plaintiff, to the time when the non-permission disposition was revoked by administrative litigation, should be revoked as it constitutes abuse of the right to taxation or deviation from discretionary power.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) According to Article 104-3 of the former Income Tax Act (amended by Act No. 8825, Dec. 31, 2007; hereinafter the same), the term “non-business land” means land falling under any of the following subparagraphs during the period prescribed by the Presidential Decree during which the relevant land is owned, excluding land which is exempt from or exempted from property tax, land which is subject to separate aggregate taxation or separate taxation, land which is subject to obligation under related Acts and subordinate statutes, amount of income, etc. (paragraph (1)), and in applying the provisions of paragraph (1) to the extent that the land falls under a non-business land due to the prohibition of use due to the provisions of Acts after its acquisition or other inevitable reasons prescribed by the Presidential Decree, it may not be deemed a non-business land as prescribed by the Presidential Decree (paragraph (2) of the same Article); the period exceeding 104-3 (1) of the Income Tax Act or the period exceeding 20 years prior to the acquisition of the land for which the previous construction permit exceeds 16/10 of the term.

(2) Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring special circumstances, and shall not be extensively interpreted or analogically interpreted without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret that the provision of tax reduction and exemption is clearly preferential in the provision of tax reduction and exemption requirements.

In light of the above legal principles, where land other than the land in this case, is not a land directly related to residence or business in consideration of the situation of the use of the land, the amount of income, etc., such as farmland, forest land, and stock farm land, and there are reasonable grounds to recognize that it is directly related to residence or business, if meeting the period standards prescribed in Article 168-6 of the former Enforcement Decree of the Income Tax Act, it constitutes land for non-business use. However, if the use of land is prohibited by the provisions of the Act after the acquisition of land or due to other unavoidable reasons, it may not be deemed land for non-business use. However, if land for business use can be deemed land pursuant to the above provision, "Article 168-14 (1) 1 of the former Enforcement Rule of the Income Tax Act" or "Article 3 (hereinafter "Article 168-14 (1) 1 of the former Enforcement Rule of the Income Tax Act") or subparagraph 3 (hereinafter "Article 3") of the former Enforcement Rule of the Income Tax Act.

In other words, considering the change in circumstances that occurred after the acquisition of land, it is reasonable to interpret subparagraph 1 as the provision that "where there is no prohibition or restriction on the use of land at the time of the acquisition of land, but there is only such reason, if the use of land is prohibited or restricted pursuant to the law after the acquisition of land, it shall be deemed the land for business." Unlike subparagraph 1, subparagraph 3, it is reasonable to interpret as the provision that "Where there is a general restriction on the use of land due to the public interest, etc. from the time of the acquisition of land (in this respect, it is distinguishable from subparagraph 1), although there is a possibility of use of land due to the acquisition of land from the time of the acquisition of land due to the application for authorization, permission, license, etc., and even though there is a possibility of use of land due to the application for authorization, permission, etc., related to the project in question pursuant to the provisions of Article 12 of the Building Act and administrative guidance, it shall be deemed as the land for business."

(3) In light of the above provisions, considering the overall purport of pleadings as to the above land category No. 1, No. 3, 5, and No. 1 (including various numbers), the following facts are as follows: ① The land of this case is located in the area near Ycheoncheoncheon which was located in the Ycheon River without any specific number; ② the land category of this case should be set up at the level of 3,000,000, and the land category of this case was no more than 1,000,000, which was no more than 3,000,000, and the land of this case was no more than 1,000,000,000 won for the above land for the purpose of preventing flood damage; ② The land category of this case was no more than 3,000,000,000 won for the above land for which the plaintiff's use of the above land was no more than 7,000,000 won for the above land.

(4) Therefore, the Defendant’s instant disposition rejecting the Plaintiff’s request for rectification of reduction on the ground that the period of restriction on use under the above Act does not exceed the period of time under Article 168-6 of the former Enforcement Decree of the Income Tax Act is lawful, and the Plaintiff’s assertion disputing this

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment Form 5]

Judges Jeong-young (Presiding Judge)