The method of calculating gains on transfer where the ratio is not determined because the transferred assets are not located in the specific area at the time of acquisition.

Article 115(3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12154, May 8, 1987) provides that Article 115(3) of the same Act shall apply only where the transferred asset was located in a specific area at the time of its acquisition, but only where the ratio has not been determined. Where the transferred asset is not located in a specific area at the time of its acquisition, the standard market price according to the above ratio or conversion method may not be applied, and both the transfer value and the acquisition value shall

Article 115 (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12154 of May 8, 1987)

Supreme Court en banc Decision 86Nu576 Decided January 20, 1987 86Nu654 Decided February 10, 1987, Supreme Court Decision 87Nu454 Decided November 24, 1987 88Nu3048 Decided June 28, 1988

Plaintiff

Director of the District Office

Seoul High Court Decision 87Gu1032 delivered on January 14, 1988

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

As to the grounds of appeal by Defendant Litigation Performers:

Article 115(3) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12154, May 8, 1987) provides that the value converted according to the method prescribed by the Ordinance of the Ministry of Finance and Economy shall be the standard market price at the time of acquisition of assets in a specific area under Article 115(1)1(a) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12154, May 8, 1987; 86Nu654, Feb. 10, 1987; 87Nu454, Nov. 24, 1987; 87Nu45884, Aug. 8, 2088; hereinafter referred to as "ratio") shall apply only where the transferred assets are located in the specific area at the time of acquisition, and the ratio is not determined.

In the same purport, the court below held that the defendant's calculation of the acquisition price for the land on two lots as stated in the decision that the plaintiff did not have determined the rate because it was not located in the specific area at the time of its acquisition is unlawful by the method as stipulated by the Ordinance of the Ministry of Finance and Economy of Article 115 (3) of the Enforcement Decree of the above Enforcement Decree is just

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

Justices Lee Jae-sung (Presiding Justice)