Plaintiff (Law Firm Samduk et al., Counsel for the plaintiff-appellant)

The Director of the Pacific District Office

March 27, 2013

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 42,203,750 on October 1, 2011 against the Plaintiff shall be revoked.

1. Details of the disposition;

A. On November 15, 198, the Plaintiff acquired and owned a road of 73.4 square meters ( Address 1 omitted) on a road of 73.4 square meters (hereinafter “instant land”). On January 24, 1996, on December 11, 1998, the Plaintiff changed the land category to a site. On December 11, 1998, the instant land No. 1 and the instant land adjacent thereto, 289.9 square meters (hereinafter “instant land No. 2”) and 10 square meters (hereinafter “the instant land”) on the same ( Address 2 omitted) as the same (hereinafter “merged land”), 2,736.5 square meters (hereinafter “merged land”). On November 30, 2010, the Plaintiff transferred the merged land and the building on its ground to the Defendant on December 30, 2010, and transferred the land and the building on its land to 5,386,304,309,497,2050,2005 won.

B. In determining the acquisition value of the instant land No. 1, the Plaintiff applied the officially assessed land price as of January 1, 1990 to the land No. 2, which was based on the instant land No. 2. The Defendant erred in calculating the acquisition value based on the instant land No. 2. The Defendant requested the head of the Suwon Tax Office having jurisdiction over the instant land No. 1 to assess the appraisal value based on the instant land, and subsequently, determined the acquisition value of the instant land No. 1 based on the result of the appraisal, and notified the Plaintiff of the correction of KRW 42,203,750 on October 1, 201.

C. The Plaintiff filed an objection with the director of the Seoul Regional Tax Office on November 25, 201, but was dismissed on November 25, 201, and filed an appeal with the Tax Tribunal on April 26, 2012.

【In the absence of dispute over the grounds for recognition, entry of Gap evidence Nos. 1 and 2 (hereinafter each number is included) and the purport of the whole pleadings

2. The assertion and judgment

A. Summary of the plaintiff's assertion

(1) Violation of the acquisition price calculation procedure

According to the Income Tax Act, although the head of the tax office having jurisdiction over the place of tax payment evaluates the acquisition value of the land of this case according to the method prescribed by the Presidential Decree by taking into account the officially assessed individual land prices of similar land adjacent to the place of tax payment, the defendant did not make a self-evaluation of the acquisition value and requested it to the head of the competent tax office. This is invalid because Article 164 (1) of the

(2) Justifiable grounds for an exemption from penalty

The Plaintiff calculated the conversion price according to the price of the land No. 2 that was adjacent to the land No. 1 that did not have the officially assessed individual land price, and voluntarily reported and paid the price. Since the Defendant applied the appraisal result of the land price retroactively, the penalty tax of this case was imposed after the Defendant applied the appraisal result, it was unlawful since it imposed the penalty tax even

(b) Fact of recognition;

(1) On November 15, 198, the Plaintiff purchased the instant land No. 1, and the Plaintiff also purchased the instant land No. 2 and the instant land No. 267.9m2, 289m2, 299m2, ( Address 4 omitted), 293m2, 289m2, 289m2, 289m2, 289m2, 289m2, 289m2, and 289m2, and 289m2,000 (hereinafter referred to as “the adjoining land”).

(2) The instant land No. 1 was a road located in the middle of being surrounded by connected land. The land category was changed on January 24, 1996 to a site on the road. In addition, the instant land was combined with the instant land on December 11, 1998 by adding up ten parcels, including connected land.

(3) On November 1, 2010, the Plaintiff sold the said combined land and its ground buildings to KRW 9,805,324,540, and thereafter, upon reporting and paying the transfer income tax, the Plaintiff reported and paid the transfer income tax, calculated the acquisition value of each land before the annexation as the conversion price, and reported the acquisition value of the building in total to KRW 5,336,80,740, which is the officially assessed individual land price as of January 1, 1990, filed a conversion report on the instant land No. 1 for which the officially assessed individual land price was not publicly notified.

(4) As to this, the Defendant denied that the instant land No. 1 was the land for which the determination and announcement of the officially assessed individual land price were omitted, and the land category was changed to the site on the road, and thus, the Plaintiff calculated the converted value based on the officially assessed individual land price of the instant land No. 2, which is the site, without any similar land in the vicinity. On June 3, 2011, the Defendant requested the head of Busan District Tax Office having jurisdiction over the instant

(5) Accordingly, the head of the Suwon Tax Office requested an appraiser to appraise the value of the instant land No. 1 as of January 1, 1990, and received the appraisal result, which is 505,000 square meters in the Busan Branch of the Korea Appraisal Board, and 537,000 square meters in the Busan Metropolitan City branch of the Korea Appraisal Board, which is a stock company, and 537,000 square meters/ square meters in the Busan Metropolitan City. The Defendant converted the acquisition value of the instant land No. 1 based on the 521,000 square meters/ square meters, which is the average value of the said appraisal value, and issued the instant disposition by correcting the total acquisition value of the instant

(6) According to the decision of correction, the instant amount of tax assessed is KRW 1,089,924,783; KRW 3,553,810; KRW 2,626,135; KRW 1,053,90,973, which is the amount of tax payable; and KRW 42,204,755, which is the amount of tax notified to the Plaintiff at the time of the instant disposition.

【Ground for recognition】 Evidence Nos. 1 through 4, Eul’s evidence Nos. 1 through 10, and the purport of the whole pleadings

(c) Related statutes;

Attached Form is as shown in the attached Form.

D. Determination

(1) Determination of illegality in the calculation procedure of acquisition price

(A) Article 97 (1) 1 (a) of the Income Tax Act provides that the value of land without a publicly assessed individual land price shall be the amount appraised by the method prescribed by Presidential Decree in consideration of the publicly assessed individual land price of neighboring similar land. As to the meaning of "amount appraised by the method prescribed by Presidential Decree" in Article 164 (1) of the Enforcement Decree of the Income Tax Act, the value assessed by the head of the tax office having jurisdiction over the place of tax payment (the head of the tax office having jurisdiction over the place of tax payment and the head of the tax office having jurisdiction over the location of the relevant land shall be the value assessed by the head of the tax office having jurisdiction over the place of tax payment, where there is a difference between the head of the tax office having jurisdiction over the place of tax payment and the head of the tax office having jurisdiction over the place of tax payment and the head of the tax office having jurisdiction over the location of the relevant land, or by requesting two or more appraisal agencies to assess the value of the relevant land

(B) As seen earlier, the Defendant requested the head of the Suwon Tax Office, which is the head of the tax office having jurisdiction over the land of this case, to evaluate the acquisition value of the land of this case, and the head of the Suwon Tax Office requested two appraisal institutions to derive the appraisal value, and the Defendant calculated the acquisition value of the land of this case based on this, and no procedural errors exist in the Enforcement Decree of the Income Tax Act. Although the Income Tax Act provides that the assessment of the land value of this case shall be conducted, the Plaintiff asserts that the provisions of the Enforcement Decree of the Income Tax Act allowing the delegation of the assessment to the head of the tax office having jurisdiction over the location of the land exceed the scope of delegation by the mother Act. However, the said Enforcement Decree does not seem to exceed the scope of delegation by the mother Act.

(C) Ultimately, the Plaintiff’s above assertion is without merit.

(2) Determination of the assertion on exemption from penalty tax

(A) In order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under the tax law is an administrative sanction imposed as prescribed by the individual tax law in cases where a taxpayer violates various obligations, such as a return and tax payment, without justifiable grounds, and it is unreasonable for the taxpayer to be aware of such obligations, and thus, it may be exempted from imposition in cases where there is a justifiable reason not to cause the failure of the taxpayer to neglect his/her obligations, such as where there are circumstances where it is unreasonable for the taxpayer to reasonably present his/her obligations or where it is unreasonable to expect the party to fulfill his/her obligations (see Supreme Court Decision 2003Du4089, Apr. 15, 2005).

(B) In light of the following: (a) whether there exists such justifiable cause in this case; and (b) the land No. 1 in this case can easily be inferred that there exists a significant difference in the value of both land depending on the land category and current status at the time of its acquisition or January 1, 190; and (b) the Plaintiff could have known that the land No. 1 in this case was determined as the converted acquisition value by means of the appraisal by the head of the competent tax office or the head of the competent tax office having jurisdiction over the location of the land pursuant to the Income Tax Act and the Enforcement Decree of the same Act; (b) even if the Plaintiff voluntarily reported and paid capital gains tax based on the acquisition value of the land No. 1 in this case converted into the officially assessed land price of the land No. 2 in accordance with the publicly assessed land price of this case due to the land sites of this case, it does not constitute justifiable cause for a taxpayer to be in violation of the tax law (see Supreme Court Decision 91Nu5341, Nov. 26, 1991).

(C) Ultimately, the Plaintiff’s above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment Form 5]

Judges Cho Byung-gu