Coastal dysty dysty (Attorneys O Dong-dong et al., Counsel for defendant-appellant)

Head of Nowon Tax Office

August 25, 2010

Seoul Administrative Court Decision 2009Gudan11297 decided March 18, 2010

1. Of the judgment of the court of first instance, the part against the defendant in the disposition of imposition of penalty tax amounting to KRW 968,849,832, which the defendant against the plaintiff on November 21, 2008, is revoked, and the plaintiff's claim as to the revocation portion is dismissed.

2. The plaintiff's appeal is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant’s imposition of penalty tax of KRW 256,106,220 against the Plaintiff on November 21, 2008, and the imposition of penalty tax of KRW 968,849,832 against the Plaintiff on November 21, 200, and the imposition of penalty tax of KRW 968,849,832 against the Plaintiff is revoked.

2. Purport of appeal

A. The plaintiff

The part against the plaintiff in the judgment of the first instance shall be revoked. The defendant shall revoke the disposition of imposition of penalty tax of KRW 256,106,220 against the plaintiff on November 21, 2008.

B. Defendant

The text of paragraph (1) is as follows.

1. Details of the disposition;

A. The plaintiff shall be the non-party 1 (one omitted) of the crew members of coastal weather (coastal), and is a clan in accordance with the name of the family members of his or her non-party 1 (one omitted), who is his or her denial of his or her funeral, and the "coastals of coastal clans of Sysssssong-gun" (hereinafter referred to as the "Sysong-gun clan") is a clan composed of non-party 1's second descendants, which is composed of the non-party 2 (one omitted) of his or her clans in order to promote the protection of graves and mutual friendship among his or her members, including the Sysong-gun.

B. On October 19, 2004, the Korea Land Corporation, as the implementer of the housing site development project in Seongbuk-nam School site development project, issued to the Plaintiff a letter of guidance on the payment of compensation to receive the “compensation for expropriation” by December 6, 2004 after setting the amount of KRW 22,867,917,50 as stated in the attached Form in the Central Land Expropriation Committee’s adjudication on October 19, 2004 regarding the “land subject to expropriation” (hereinafter “instant land”).

C. The head of the Seongdong Military clan filed an application against the Plaintiff for a provisional disposition prohibiting the collection and disposal of the claim against the Plaintiff regarding the “compensation for confinement,” as set forth in No. 2004Kahap659, and the above court rendered a ruling of acceptance on November 29, 2004 (hereinafter “provisional disposition of this case”).

On August 24, 2007, in the case of confirming the right to claim the withdrawal of a clan deposit, which is a lawsuit filed by the head of the Suwon Military clan, the Suwon District Court of 2005Da2123, 206 Ga 12639 (Intervention), the above court rendered a ruling dismissing that the clan of the same clan brought a lawsuit on August 24, 2007 without going through the resolution of the general meeting of the clan. Although the clan of the same clan appealed to Seoul High Court 2007Na10539, 10546 (Intervention), the above court appealed on October 22, 2008 (the above court's request to confirm the right to claim the withdrawal of a clan, "the right to claim the withdrawal of a clan" on the premise that the third party, who is not the deposit party, filed a lawsuit to confirm the right to claim the withdrawal of a clan deposit against the deposited party, and thus, it does not constitute an original judgment that proves that the above right to claim the sale of the clan was not legitimate.

D. On December 2, 2004, the Korea Land Corporation deposited KRW 22,867,917,500 as the cause of deposit with the defendant as the principal deposit and the existence of the provisional disposition in this case in the Sung-nam branch of Suwon District Court. On December 2, 2004, it completed the registration of ownership transfer for the land in this case on December 16, 2004.

E. On November 21, 2008, the Defendant imposed capital gains tax of KRW 3,786,018,250 (income tax of KRW 2,561,062,206 + Additional tax of KRW 256,106,220 + Additional tax of KRW 968,849,832) on the Plaintiff on November 21, 2008.

F. The Plaintiff filed a request for review on October 30, 2007, but the Commissioner of the National Tax Service dismissed the claim on April 15, 2009 (hereinafter “instant disposition”). The Commissioner of the National Tax Service rendered a disposition imposing penalty tax of KRW 256,106,220, and penalty tax of KRW 968,849,832, and penalty tax of KRW 968,832, which reverts to the year 2004 (hereinafter “instant disposition”).

[Reasons for Recognition] Evidence Nos. 1 to 7, Evidence No. 1 to 1, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The instant land is included in a housing site development zone conducted by the Korea Land Corporation in the Seongbuk-gu Educational Zone. However, the Korea Land Corporation deposited compensation on the ground of the instant provisional disposition. Since the Plaintiff was unable to file a final return on the tax base of capital gains tax due to a lawsuit, such as a claim for confirmation of the right to request deposit withdrawal, which is continued between his/her clan and his/her clan, there is a justifiable reason that is not attributable to his/her negligence in performing his/her duties. The instant

B. Relevant statutes

Attached Form "Related Acts and subordinate statutes" shall be as stated.

C. Determination

1) Time of transfer of the instant land

A) Article 88(1) of the Act provides that “The time of acquisition and time of transfer shall be determined by the Presidential Decree in calculating gains on transfer of assets.” Article 98 of the Act provides that “The time of acquisition and time of transfer shall be determined by the Presidential Decree in the calculation of gains on transfer of assets.” Article 162(1) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 18705, Feb. 19, 2005; hereinafter “Enforcement Decree”) provides that “the time of acquisition and time of transfer under Article 98 of the Act shall, in principle, be the date of liquidation of the price of the relevant assets.”

B) Expropriation under the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (hereinafter “Public Works Act”) constitutes the transfer of assets subject to capital gains tax (see Supreme Court Decisions 95Nu13890, Dec. 22, 1995; 2000Du5531, Aug. 23, 2002).

Any project operator shall acquire the ownership of land or goods at the commencement date of expropriation, and simultaneously extinguish other rights to such land or goods (Article 45 (1) of the Public Works Act), and when any project operator fails to pay or deposit the indemnity adjudicated by the competent Land Tribunal by the commencement date of expropriation or use, the adjudication by the relevant Land Tribunal shall lose its validity (Article 42 (1) of the Public Works Act).

In the case of transfer due to expropriation under the Public Works Act, the transfer period for the calculation of gains on transfer under the Income Tax Act is the date of settling the price in principle in accordance with Article 98 of the Act and Article 162 (1) of the Enforcement Decree of the Act, and it does not change even if there is a provisional disposition on the compensation for expropriation (see Supreme Court Decision 2004Du6914, May 13, 2005).

C) The Korea Land Corporation deposited the land expropriation compensation on December 2, 2004 on the ground of the provisional disposition in this case, and completed the registration of ownership transfer on December 16, 2004. Thus, the time of land transfer in this case is December 2, 2004.

The plaintiff should make a final return on the tax base of transfer income and make a voluntary payment from May 1, 2005 to May 31, 2005 pursuant to Articles 110 and 111 of the Act, but did not fulfill his obligation to report and pay the transfer income tax.

2) As to the instant disposition

A) As to the penalty tax in bad faith among the instant disposition

Even if the plaintiff was unable to receive the compensation for expropriation of the land of this case due to the provisional disposition of this case, the plaintiff was the owner on the register of the land of this case, received a written guidance for payment of the compensation for receipt, and dispute was raised on the premise that the land of this case was owned by the plaintiff in the course of litigation with the

Therefore, while recognizing that the plaintiff himself/herself is a taxpayer as the owner of the land of this case, the plaintiff did not report the transfer income tax within the time limit stipulated in Article 110(1) of the Act, and the reason why there is a dispute between the clan and the clan of the same clan does not seem to be a justifiable reason for neglecting the transfer income tax report.

B) As to the penalty tax in unfaithful payment of the instant disposition

According to Gap evidence Nos. 4 through 7, Gap evidence Nos. 10 and 11, it is recognized that the plaintiff was unable to receive the compensation for expropriation of the land of this case due to the plaintiff's litigation related to the right to claim the payment of the compensation for expropriation of the land of this case and the clan of the Sungsung-gun and the

However, even if a third party was unable to receive compensation for expropriation due to a provisional disposition, it cannot be deemed legitimate that he did not pay capital gains tax as long as the land in this case was transferred and the liability to pay capital gains tax was established. Even if there was no financial resources to pay capital gains tax, other than compensation for expropriation of the land in this case, it is merely an economic situation that is the internal factor of the taxpayer (see Supreme Court Decision 85Gu170, Jun. 8, 1993).

3. Conclusion

The Plaintiff’s claim is without merit. Of the judgment of the court of first instance, the part concerning the imposition of penalty tax of KRW 968,849,832, which the Defendant against the Plaintiff on November 21, 2008, as to the imposition of penalty tax of KRW 968,849,832, which belongs to the Plaintiff on November 21, 2008, is unfair. The above part among the judgment of the court of first instance is revoked

[Attachment]

Judges Kim Jong-dae (Presiding Judge)