Cho High Court Decision 2010Du3163 ( December 28, 2010)

Since the purchase price under a sales contract is the actual acquisition price, the conversion price is illegal.

In purchasing commercial buildings, the tenant succeeded to the tenant's obligation to return the lease deposit, and the new tenant has received the lease deposit and returned the lease deposit. Since the amount of the lease deposit is paid to the seller except the lease deposit under the sales contract, it is illegal to impose capital gains tax on the basis of the conversion price.

2011-gu 4889 Disposition of revocation of imposition of capital gains tax

The AA

Head of Yongsan Tax Office

October 11, 2011

November 1, 2011

1. Revocation of the Defendant’s disposition of imposition of capital gains tax of KRW 65,630,640 against the Plaintiff on February 1, 2010

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On May 16, 2005, the Plaintiff acquired and owned No. 0-00 (No. 9.61 of the steel reinforced concrete building, No. 1.59/142 of the ownership site; hereinafter referred to as the “instant commercial building”) on the zeroth floor in the BB market located in Seoul, Jung-gu, Seoul (O200-00-00, and transferred the instant commercial building at KRW 550 million on October 27, 2006.

B. The Plaintiff reported and paid the transfer income tax with the acquisition value of the instant commercial building at KRW 530 million and the transfer value at KRW 550 million.

C. However, on February 1, 2010, the Defendant calculated the acquisition value as the conversion value on the ground that the acquisition value of the instant commercial building is unclear, and determined and notified the increase in the transfer income tax of 65,630, and 640 won for the year 2006 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap evidence 1 to 4, Eul evidence 1 and 2 (including each number), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff’s acquisition value of the instant commercial building is KRW 530 million. Therefore, the instant disposition that calculated the acquisition value of the instant commercial building at the conversion price is unlawful.

B. Facts of recognition

(1) On the introduction of UCC, the Plaintiff acquired the instant commercial building from DaD in around 2005, and on May 3, 2005, the sales contract for the instant commercial building stated the purchase price of KRW 530,700,000 (the contract amount of KRW 50,000,000 and the balance of KRW 487,00,000).

(2) When the Plaintiff purchased the instant commercial building, the Plaintiff paid KRW 387,000,00 to NewCC as a seller. Meanwhile, at the time, KimE was a lessee at the instant commercial building, but the deposit for the lease of KimE was KRW 150,000,000.

(3) In purchasing the instant commercial building, the Plaintiff succeeded to the obligation to refund the lease deposit to KimE, and thereafter, received the lease deposit amount of KRW 150 million from the largest F, a new lessee, and returned only KRW 1550,000 of the lease deposit from Kim EE.

[Ground of recognition] The above evidence, Gap evidence Nos. 5 through 10, witness UCC, KimE, and bestF's testimony, the purport of the whole pleadings

D. Determination

According to the above facts, the acquisition value of the commercial building of this case shall be KRW 530 million and KRW 700,000,000. On the other hand, the disposition of this case imposing capital gains tax on the conversion price of the acquisition value of the commercial building of this case is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted on the grounds of its reasoning, and it is so decided as per Disposition.