Cho High Court Decision 201Do1502 (No. 08, 2011)

It is not enough to recognize that he had resided and cultivated directly in the vicinity of the orchard.

In light of the fact that the plaintiff's residence was not adjacent to the time of the orchard, and that it seems that the plaintiff had acquired the orchard with the knowledge of such circumstance, and that the plaintiff had been employed as an auditor of a corporation, it is insufficient to recognize that he/she had resided and cultivated directly in the vicinity of the orchard. Therefore, the land for non-business

Article 104-3 of the Income Tax Act

Article 168-6, 168-8 of the Enforcement Decree of the Income Tax Act

2011Gudan23187 Revocation of Disposition of Imposing capital gains tax

XX Kim

Head of the Do Tax Office

April 17, 2012

May 22, 2012

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of KRW 000 on September 1, 2010 against the Plaintiff on September 1, 201 shall be revoked.

1. Details of the disposition;

A. On March 16, 2007, the Plaintiff transferred 9,107 square meters of 00 m20 m2 (hereinafter referred to as “the instant forest”) in Namyang-si, Namyang-si (hereinafter referred to as “the instant forest”), on July 13, 2007, the Plaintiff transferred 1,157 m20 m2 (hereinafter referred to as “the instant orchard”) in Nam-dong, Namyang-dong, 000-0 m2 (hereinafter referred to as “the instant orchard”) and did not report the transfer income tax.

B. Accordingly, on September 1, 2010, the Defendant: (a) regarded the instant orchard as land for non-business use in relation to the transfer of the instant woodland and orchard; and (b) decided and notified KRW 000 of the capital gains tax accrued in 2007 (hereinafter “instant disposition”).

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to 6, Eul evidence 1, the purport of whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case, which reported differently, is unlawful, although the instant orchard does not constitute non-business land due to the following reasons:

(1) From December 30, 1974, the Plaintiff resided in Dobong-gu Seoul Metropolitan Government from around December 30, 1974 to the time of the transfer of the instant orchard. The Plaintiff’s residential place connected to the Namyang-si, the location of the instant orchard, which was the Plaintiff’s residential place, and the Dobong-gu was established on January 1, 198 due to the administrative restructuring of Dobong-gu, Seoul Metropolitan Government, which was the location of the instant orchard, and thus, the Dobong-gu did

(2) Inasmuch as the Plaintiff’s residence does not coincide with the South-North Jeju city due to the reorganization of the administrative district, which is the ground for not attributable to the Plaintiff, the Plaintiff still resides in the area adjacent to the South-Korea city, and thus, the Plaintiff ought to be deemed to meet the requirements for

(3) In addition, the Plaintiff acquired the instant orchard and cultivated the instant orchard directly while residing in a house located in XX Dong-dong 000 (the Plaintiff’s father KimA’s house) near the instant orchard from the time of transfer to the time of transfer.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

According to Article 104-3 (1) 1 (a) of the Income Tax Act (amended by Act No. 10221 of March 31, 2010), and Articles 168-6 and 168-8 (1) 2 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20618 of Feb. 22, 2008), for farmland to constitute a non-business land, "farmland for which the owner of the farmland does not reside in the location of the farmland or does not cultivate himself/herself." [The land excluding farmland for which a person who is registered as a resident in a Si/Gun/Gu or a Si/Gun/Gu adjacent thereto and actually resides in the area of the same Si/Gun/Gu as farmland location and is registered as a resident, and whose possession period is more than three years but less than five years, the period less three years from the possession period of the land, the period exceeding three years from the immediately preceding three years, and the period exceeding ten percent of the ownership period of the land.

In this case, the following circumstances, which can be recognized by the health team, the above facts of recognition, and the above evidence, (i) the Plaintiff acquired the instant orchard on July 13, 2003, i.e., the Plaintiff was residing in the Dobong-gu Seoul, and the Dobong-gu was not a Si/Gun/Gu adjacent to the Namyang-si, and (ii) the Plaintiff was separated from the Dobong-gu Seoul in around 1988, but at the time of the Plaintiff’s acquisition of the instant orchard, the Dobong-gu, which was the Plaintiff’s residence, was not connected with the Nam-si, and the Plaintiff appears to have acquired the instant orchard with the knowledge of such circumstances, and (iii) the Plaintiff could not be deemed to have resided in the area adjacent to the instant orchard as the auditor of the OO Korea from January 1, 2003 to December 31, 2005, and there was no evidence to acknowledge that the Plaintiff had directly resided in the instant orchard and there was no reason to acknowledge it.

Therefore, the instant orchard constitutes land for non-business use because it has not been provided for business for a period exceeding three years from the Plaintiff’s possession period (three years and eleven months), the period exceeding one year from the three years immediately preceding the transfer date, and the period of land ownership exceeding twenty percent. Thus, the instant disposition that was reported as such is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.