Chuncheon District Court 201Guhap1489 ( December 23, 2011)

Early High Court Decision 2010Du0738 ( October 25, 2011)

It is reasonable to view that the forest trees have been transferred as a constituent part of the forest land not subject to independent transactions.

In light of the fact that the transfer value of forest trees and forest land is not separately divided, and the purchaser calculated only the land and purchased the land, and the purchaser submitted a confirmation that the trees are included incidental to the trees, etc., it is difficult to deem that the forest trees were subject to independent transactions, and thus, the disposition that deemed the entire purchase price as transfer income of forest is lawful.

Article 94 of the Income Tax Act

Article 19 of the Income Tax Act

(Chuncheon)Revocation of revocation of disposition of imposing capital gains tax;

XX

Head of the District Tax Office

Chuncheon District Court Decision 201Guhap1489 Decided December 23, 2011

May 2, 2012

May 16, 2012

1. The plaintiff's appeal is dismissed.

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

Pursuant to the claim and the purport of appeal

The judgment of the first instance shall be revoked. The defendant shall revoke the disposition of imposition of capital gains tax of KRW 000 against the plaintiff on August 5, 2009.

1. Details of the disposition;

A. On December 18, 199, the Plaintiff acquired 39,82 m22 m2 (hereinafter “the instant forest”) in Gyeyang-gu, Gyeyang-gu, Chungcheongnam-gu, Chungcheongnam-do (hereinafter “Yancheon-gu”) with AA on December 18, 199, and transferred 000 m2 (hereinafter “the instant purchase price”) to 4 persons, including HaB, etc. on August 5, 2008.

B. On October 23, 2008, pursuant to Article 51(8) of the Enforcement Decree of the Income Tax Act, the income from the transfer of land among the income from the transfer of forest land of this case shall be deemed capital gains, and KRW 000 won shall be calculated based on the standard market price, and the income from the transfer of forest trees on the ground of this case (hereinafter “instant forest trees”) shall be deemed the business income, and the income from the transfer of forest trees on the ground of this case shall be deemed the business income, and the Plaintiff reported and paid KRW 00 as global

C. On August 5, 2009, the Defendant rendered the instant disposition to correct and notify the Plaintiff of the transfer income tax for the year 2008 as KRW 000 on the ground that the instant forest was included in the instant forest land and transferred to the Plaintiff by deeming that the transfer of the instant forest trees did not fall under business income as temporary transactions with no feasibility.

D. The Plaintiff filed an objection with the Tax Tribunal on February 26, 2010, seeking the revocation of the instant disposition, but was dismissed on April 25, 201, and filed the instant lawsuit on July 21, 201.

[Reasons for Recognition] Unsatisfy, Gap evidence 2 through 5 (including each number in the case with a serial number), the purport of the whole pleadings

2. Relevant statutes;

The entries in the attached Table-related statutes are as follows.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Claim I

The plaintiff had been planted before acquiring the forest land in this case, and the plaintiff continued to conduct the afforestation and growing of the forest land in this case by continuously running the afforestation and growing of the forest land in this case, such as conducting separate work and continuing forest conservation activities even after acquiring the forest land in this case, and the Korean Standard Industrial Classification, which is invoked as to the scope of the business in Article 29 of the Enforcement Decree of the Income Tax Act, stipulates the tree in the forest in order to produce the forest trees's "forest cultivation business" among the forest management business included in the forestry, and determines feasibility based on the forest trees' growing activities, is consistent with the interpretation of the relevant provisions, such as Article 19 (1) of the Income Tax Act, and the determination of feasibility based on the forest trees's growing activities is consistent with the interpretation of the relevant provisions, such as Article 19 (1) of the Income Tax Act (where imposing tax on the forest trees on the basis of continuous and repeated nature of the transfer of the forest trees in this case, it is impossible to impose the income from the forest in this case's business income and thus it is unlawful to determine whether the transfer of the forest income in this case is subject to taxation.

(2) Claim II

Even if the Plaintiff did not engage in growing forest trees in the instant forest land, the instant forest and the instant forest have been sold and purchased as separate trade subject to separate purchase and sale (However, the Plaintiff agreed to sell the instant forest without distinguishing the purchase price of forest land from the forest land at the time of selling the forest land), and the instant forest trees recognized as the object of independent trade cannot be taxed as capital gains including the transfer price of forest (see Supreme Court Decision 84Nu352, Sept. 10, 1985). The instant disposition by the Defendant on a different premise is unlawful (see Supreme Court Decision 84Nu352, Sept. 10, 195).

B. Determination

The argument I and II are also considered as follows.

(1) Article 94(1)1 of the Income Tax Act (amended by Act No. 9270 of Dec. 26, 2008; hereinafter the same) provides that income accruing from the transfer of land or a building shall be capital gains; Article 19(1)1 of the Income Tax Act provides that income accruing from agriculture and a forestry shall be business income; on the other hand, Article 51(8) of the Enforcement Decree of the Income Tax Act provides for the method of calculating the total amount of income in calculating the business income resulting from the operation of a forestry. In full view of the type and purpose of such provisions, the transfer of forest trees that are separated from land and are not subject to separate taxation pursuant to Article 51(8) of the Enforcement Decree of the Income Tax Act shall be deemed to fall under the forestry, i.e., the business, and if not, income from the transfer of forest trees shall also be included in the income from the transfer of land.

(2) We examine the instant case in accordance with such legal doctrine.

(A) Comprehensively taking account of the purport of the arguments in Gap evidence Nos. 2 and Eul evidence Nos. 3 through 5, the plaintiff, when transferring the forest of this case, sold obstacles, such as forest trees, to the object of sale, and agreed to the total purchase price without distinguishing the transfer price of forest trees and the transfer price of forest land from the object of sale. ② The confirmation document prepared by four (4) forest buyers, etc., including BaB, submitted by the defendant, was not the object of sale of land, and thus, the part of the forest can not be discussed from the beginning because it was not the intention of sale of land, and there may arise a harsh problem on the use of land. Accordingly, this contract is calculated only and executed, and it is confirmed that the tree is included incidental in the purchase price of land. ③ The confirmation statement and explanation of the object of sale prepared by the broker at the time of the sale contract of the forest of this case is not entirely stated, ④ The fact that the plaintiff did not register the business as to the forest of this case and did not have the method of sale under the Act.

(B) According to the above facts, it cannot be deemed that the forest trees of this case were separated from the land and they were the objects of independent transactions, and further, it is reasonable to view that the forest trees of this case were transferred not to the Plaintiff in the course of engaging in the forestry business, but to the part constituting the forest land of this case, and that the forest land of this case was transferred along with its constituent parts. Therefore, the disposition of this case on the premise that the Defendant’s entire purchase price was income from the transfer of forest land of this case is lawful, and both the Defendant’s assertion I and II are without merit.

[In light of the above facts, the Plaintiff cannot be deemed to have engaged in growing businesses (the main owner I) and the total purchase price of the instant forest shall be deemed the transfer price of the instant forest, and the transfer price of the instant forest shall not be deemed to include not only the instant forest but also the transfer price of the instant forest, such as the assertion II, but not the case where the transfer price cannot be separated (the main owner II)

4. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.