The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Article 35(2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 13557, Dec. 15, 2015; hereinafter “former Inheritance Tax Act”) provides that where a person, other than a specially related person, acquires an asset at a price substantially lower than the market price without justifiable grounds in light of transaction practices, the transferee of the asset shall be presumed to have received a donation of an amount equivalent to the difference between the price and the market price, and the amount equivalent to profits prescribed by Presidential Decree shall be deemed to be the value of donated property to the person who acquired the profits, and Article 26(5) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 26960, Feb. 5, 2016; hereinafter “former Enforcement Decree of the Inheritance Tax and Gift Tax Act”) upon delegation, the difference between the market price and the profits prescribed by Presidential Decree shall be deemed to be the value of donated property.

The legislative purport of Article 35(2) of the former Inheritance and Gift Tax Act is to cope with the act of modified donation and to promote the fairness of taxation by imposing gift tax on the profits acquired by the other party to the transaction when the profits equivalent to the difference between the price and the market price are actually gratuitously transferred by abnormal methods that manipulate the transaction price for the benefit of the other party to the transaction

However, in the trades between unrelated parties, it is general that there is a difference between the two parties and the market price, and it is difficult to view that the difference was donated to the other party to the transaction. Article 35(2) of the former Inheritance and Gift Tax Act is different from the trades between related parties.