Whether the acquisition value of the road portion is deducted from the transfer value in case where a new road is built and the site is sold by dividing it into a housing site after purchasing land.

Article 45 (1) 1 of the Income Tax Act provides that the actual transaction price required for the acquisition of transferred assets shall refer to the price necessary for the acquisition of the transferred assets itself. Thus, the purchase price of the part of the transferred land shall not be recognized as the price required for the acquisition to increase the degree of use of the transferred land, apart from the transferred land. However, Article 94 (1) 2 of the same Act provides that the installation cost and improvement cost of the facilities shall be deducted from the transfer price. According to Article 94 (2) 4 of the Enforcement Decree of the same Act and Article 47 (4) 4 and 6 of the Enforcement Rule of the same Act, where a new road is built on the transferred land for the convenience of land use and a new road is provided to the State or a local government without compensation, the installation cost of the land and similar cost of the road shall be included in the above Si facilities cost and improvement cost. Thus, the transfer price of the part of the land shall not be construed to be limited to cases where the State or a local government gratuitously transferred the land ownership to the State or a local government without compensation.

Article 45 (1) 1, Article 45 (1) 2 of the Income Tax Act, Article 94 (2) 4 of the Enforcement Decree of the Income Tax Act

Plaintiff (Attorney Kim Jong-ho, Counsel for defendant-appellant)

Head of the Daegu Tax Office

Daegu High Court Decision 80Gu140 delivered on December 29, 1981

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal by the defendant litigant are examined.

According to the reasoning of the judgment below, the court below found, based on the evidence of the city, that the non-party 1 and the non-party 4 purchased the total price of KRW 1,654 from the non-party 1 to the non-party 27 on February 1978 and divided it into KRW 82,70,00,00 for the land suitable for the building of a house, and established a access road and a fire-fighting road on the land in order to enhance the utilization thereof, and then divided it into 1,251.9 of the above 28 lots of land into 28 lots of land and 6 lots of road as shown in the judgment below, and determined that the above 1,251.9 of the above 27 lots of land was sold to the non-party 2 and the non-party 27 on the total price of KRW 128,975,680, and determined that the above part of the real value of the land should be deducted from the transfer price of the above 10th of the land at the above price.

However, the actual transaction price required for the acquisition of the pertinent asset under Article 45 (1) 1 of the Income Tax Act refers to the price necessary for the acquisition of the transferred asset itself. Therefore, the court below's measures that recognized the price required for the acquisition of the transferred land as the purchase price of the separate road portion cannot be clearly erroneous.

However, Article 45 (1) 2 of the Income Tax Act provides that the transfer value shall be deducted from the cost of acquiring the installation and improvement expenses, as well as the cost of acquiring the installation and improvement expenses. According to Article 94 (2) 4 of the Enforcement Decree of the Income Tax Act and Article 47 subparagraph 4 and 6 of the Enforcement Rule of the same Act, where a new road is constructed on the relevant land for the convenience of land use and provided to the State or a local government without compensation, the value of the land constituting the relevant road and the similar cost shall be included in the cost of improvement of the relevant Si facilities and equipment. Here, the term "such a road was provided without compensation to the State or a local government" refers to only the case where the ownership of the road portion was transferred without compensation to the State or the local government, but it is sufficient to interpret it as appropriate if the State or the local government fails to provide it for public use without compensation. Furthermore, even if the State or the local government does not provide it with access roads or improvement expenses within the complex as recognized in the original judgment, so it should be interpreted as necessary expenses for the State or local government without compensation.

We cannot accept this issue.

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jung-soo (Presiding Justice) and Lee Jong-young's Lee Jong-young