(a) Criteria for determining whether the income from the transfer of real estate belongs to the business income under the Income Tax Act or belongs to the transfer income;

(b) The case holding that the transfer of land acquired through consultation may be recognized as a part of the real estate sales business and may constitute the business income; and

A. Article 20(1)8 of the Income Tax Act provides for the income generated from real estate business as one of the business income subject to income tax. Article 36 subparag. 3 of the Enforcement Decree of the same Act provides that real estate business is a real estate sales business. Whether the income from the transfer of a certain real estate belongs to the business income under the Income Tax Act or is subject to capital gains tax shall be determined according to ordinary social norms, considering the transferor’s acquisition and holding status of real estate, whether the transfer is made, whether the transfer is made, the scale of the transfer, the recovery, the form of the transfer, the other party, etc., for the purpose of profit and whether the transfer is for the purpose of profit and the existence of continuity and repetition to the extent that the transfer is deemed as the business activity, and it

(b) The case holding that the transfer of land acquired through consultation may be recognized as a part of the real estate sales business and may constitute the business income; and

Article 20 (1) 8 of the Income Tax Act, Article 36 subparagraph 3 of the Enforcement Decree of the Income Tax Act

A. Supreme Court Decision 83Nu66 delivered on September 11, 1984 (Gong1984, 1657) 92Nu14526 delivered on February 23, 1993 (Gong1993Sang, 1105) 93Nu1752 delivered on September 9, 1994 (Gong194Ha, 2662) 94Nu6352 delivered on September 23, 1994 (Gong194Ha, 285) 94Nu51688 delivered on January 12, 1995

[Judgment of the court below]

Head of Sungbuk Tax Office

Seoul High Court Decision 93Gu22014 delivered on November 10, 1994

The part of the judgment below against the defendant is reversed, and that part of the case is remanded to Seoul High Court.

The plaintiff's appeal is dismissed.

The costs of appeal against the dismissed portion shall be assessed against the plaintiff.

1. Judgment on the ground of appeal by the Plaintiff’s attorney

Examining the records in light of the records, it is proper that the court below determined that the income from the transfer of the land recorded in the attached Table 1 of the judgment below (hereinafter "the land No. 1 of this case") and the remaining land excluding 1,082 square meters and 882 square meters (hereinafter "land acquired through consultation in this case") in Song-si ( Address 1 omitted) and the land recorded in the attached Table 1 of the judgment of the court below, and the land recorded in the attached Table 2, 3, and 4 of the same Table shall be deemed business income because it was conducted with continuity and repetition to the extent that it can be viewed as business activity for the purpose of profit, and there is no error of law by misunderstanding the facts against the rules of evidence or by misunderstanding the legal principles on real estate sales, such as the theory of lawsuit

2. Determination on the grounds of appeal by Defendant Litigation Performers

According to the reasoning of the judgment below, the court below acknowledged the fact that the plaintiff acquired and owned two parcels of land acquired through consultation in this case by the state (construction Ministry) on August 12, 1990, that the land acquired through consultation was inevitably sold to the State according to the road construction business of the State, and if the land acquired through consultation is not acquired by consultation, it is reasonable to deem that the land transferred to the State as a public project site of the State was made regardless of the intention to conduct real estate sales business in the plaintiff, and therefore, it cannot be viewed as business income.

Article 20(1)8 of the Income Tax Act provides that one of the business income subject to income tax is the real estate sales business, and Article 36 subparag. 3 of the Enforcement Decree of the same Act provides that the real estate business is the real estate sales business. Whether the income from the transfer of a certain real estate belongs to the business income under the Income Tax Act or is subject to the transfer income tax shall be determined according to ordinary social norms, considering the transferor’s acquisition and holding status, whether the transfer is made, the scale of the transfer, the recovery, the manner of the transfer, the other party, etc., and whether the transfer is for profit-making purposes and the continuity and repetition of business to the extent that it can be seen as business activities (see, e.g., Supreme Court Decisions 83Nu66, Sept. 11, 1984; 93Nu17522, Sept. 9, 194; 94Nu5168, Jan. 12, 1995).

According to the facts and records duly established by the court below, the plaintiff acquired, owned, owned, and owned the forest land of 5,528 square meters and 1,989 square meters prior to the subdivision on September 5, 1983 ( Address 3 omitted), and divided it into 11 lots including five parcels of land in this case. In 1988, four parcels of land acquired through consultation shall be sold to non-party 1 and non-party 5; in 1989, two parcels of land acquired through consultation shall be purchased through consultation with the State (construction Ministry); in 1989, four parcels of land shall be transferred by the sale to non-party 2 and non-party 5; from February 2, 1981 to May 193, 198, the Seoul Special Metropolitan City, which is the area where real estate was put into practice for real estate transactions, including 1,000 square meters of land, 30 square meters of land, 184 square meters of land, 184 square meters of land and 14.7, 1,2, 7, 7, 5.7.

On the other hand, in light of the Plaintiff’s acquisition and holding status of real estate, and the scale, recovery, and attitude of the transfer of the land acquired through consultation in this case, the Plaintiff engaged in a transaction of real estate in the form of being recognized as business activities by social norms since before August 12, 1989, in which the transfer of the land acquired through consultation in this case was conducted. The land acquired through consultation in this case for the purpose of obtaining the resale profit, and it can be recognized that it was sold as part of the real estate transaction. Thus, the income from the transfer of the land acquired through consultation

Nevertheless, the court below did not err in the misapprehension of the legal principles as to real estate sales business, and it is obvious that this affected the conclusion of the judgment, which points out this issue, on the ground that the land acquired through consultation was transferred by consultation, and thus, it cannot be viewed as business income by transfer.

3. Therefore, the part of the judgment of the court below against the defendant is reversed, and that part of the case is remanded to the court below. The plaintiff's appeal is dismissed without merit. The costs of appeal against the dismissed part are assessed against the plaintiff who is the losing part. It is so decided as per Disposition by the assent of all participating Justices

Justices Lee Yong-hun (Presiding Justice)