(영문) 서울행정법원 2009.7.8.선고 2009구합683 판결

On March 20, 2008, the Defendant imposed global income tax of KRW 28,871,580 on Plaintiff Kim○-○ in 2002 and imposed global income tax of KRW 28,414,040 on June 14, 2008, respectively, on Plaintiff Park Jong-○ in 2002 and revoked the imposition of KRW 28,414,040 for global income tax of KRW 202 as of June 14, 2008.

Reasons

1. Details of the disposition;

A. From August 3, 1988, Plaintiff Kim ○-dong, Seoul ○○○○○○ and 3 lots of ground shopping mall No. 7, and Plaintiff Park Jong-○ owned the same 1st floor from June 22, 1993, respectively, and the Plaintiffs leased each of the above sectional ownership to others and carried on real estate rental business.

B. On September 16, 2002, the plaintiffs offered each sectional ownership to the non-party partnership to allow the plaintiffs to reconstruct the above commercial building, and entered into a contract with the non-party partnership to receive KRW 120,000,000,000 from the non-party partnership each of the sectional ownership and the amount of losses incurred by the promotion of rebuilding and the amount of losses for business. At that time, the plaintiffs entrusted the above sectional ownership portion to the non-party partnership around that time, and on September 19, 2002, received from the non-party partnership each KRW 122,00,000 (hereinafter referred to as the "instant amount").

C. After investigating the corporate tax portion of the non-party partnership around August 2007, the Defendant made each of the dispositions to the plaintiffs as stated in the purport of the claim, including additional tax, (hereinafter referred to as "each of the dispositions of this case") on the ground that the plaintiffs did not report it as business income even though they received business compensation as above in 2002.

【Grounds for Recognition】 Evidence Nos. 1, 2, 1, 2, and 7 (including abnormal numbers) and the purport of the entire pleadings

A. The plaintiff's assertion

Each disposition of this case is unlawful on the following grounds.

1) The plaintiffs received KRW 1220 million from the non-party partnership does not constitute business income under the Income Tax Act because the plaintiffs received compensation for the decrease of their average share in the previous commercial building land at nine square meters and compensation for business losses during the reconstruction period.

2) Although the Defendant did not impose a tax on the Plaintiffs on the compensation for the reduction of the members’ share in land within the reconstruction and re-development project area, it goes against the criteria for interpretation of the tax law under the Framework Act on National Taxes and the principle for prohibition of retroactive taxation.

3) Under the tax law that the issues at the time of 2002 shall be taxable income, the provisions or interpretation of the tax law that stipulate the issues as taxable income.

Therefore, imposing penalty tax on the plaintiffs goes against the principle of good faith.

B. Determination

1) Whether the issue amount is business income

A) Applicable legal principles

According to Article 19(1) of the Income Tax Act, income generated from agriculture, forestry, fishery, mining, manufacturing, wholesale, and retail business, construction business, real estate business, etc. shall be business income. According to Article 51(3)5 of the Enforcement Decree of the Income Tax Act, in calculating the total amount of income generated from business income, the amount of income accrued or to be reverted to the relevant business shall be included in the total amount of income. According to Article 94(1) of the Income Tax Act, the income generated from the reduced transfer of land or buildings, rights to real estate, stocks, or equity shares, which are stipulated in each subparagraph shall be included in the total amount of income. In full view of the relevant provisions, if a business operator is engaged in a business and is paid by the relevant business operator due to the expropriation or transfer of the business, the amount of compensation paid by the business operator shall be included in the amount of capital gains, compensation for assets other than the business, compensation for business suspension, and compensation for losses arising from the business closure or transfer of the business (see e.g., Supreme Court Decision 2000Du15).

B) Determination

In light of the contents of the business operation of the plaintiffs, the period, the size of the issue amount, and the timing of payment, etc. of the amount of each of the above commercial buildings, the plaintiffs received the amount of money as a business compensation for the closure of the above tenant's business separately from the sectional ownership of the rebuilding of the above commercial building at the time of the registration of the trust in accordance with the rebuilding of the above commercial building. In light of the contents of the business operation of the plaintiffs, the period, the payment of the amount of the issue amount, and the timing of payment, etc., the dispute amount is paid as compensation for losses incurred in relation to the lease of the above sectional ownership of the above commercial building, so it is not capital gains but as business income included in the total amount of income, and the issue amount is not recognized as compensation for the amount of each sectional ownership of the rebuilding building at the average amount of 9 square meters compared to the portion owned by each of the previous commercial buildings.

2) Whether the criteria for tax interpretation under the Framework Act on National Taxes and the principle of prohibition of retroactive taxation are violated

There is no evidence to acknowledge that the Defendant had not imposed taxes on the compensation due to the reduction of the shares in the land in the reconstruction and re-development project area and had interpreted tax-related Acts. (In addition, as seen earlier, the key amount is the amount paid as a substitute compensation to the business losses related to the divided ownership of the said commercial building.)

3) Violation of the principle of good faith

As seen earlier, the key amount is that even under the Income Tax Act as at the time of 2002, it constitutes business income. In the case of additional tax under tax law, the taxpayer’s intentional and negligent act is not considered, and the mistake of the site under the law does not constitute justifiable grounds that are not attributable to the breach of duty (see, e.g., Supreme Court Decision 2005Du10545, Apr. 26, 2007). Thus, even if the Plaintiffs did not know that the key amount prior to each disposition of this case constitutes business income or was not notified by the Defendant, each disposition of this case cannot be deemed as contrary to the principle of good faith.

C. Sub-committee

Therefore, all of the plaintiffs' arguments are without merit.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed. It is so decided as per Disposition.