In a case where Gap corporation newly constructed a building consisting of steel identical, etc. in the steel distribution facility site of the Sinified Industrial Complex and applied for acquisition tax reduction or exemption pursuant to Article 276 (1) of the former Local Tax Act, but the competent administrative agency rendered a disposition imposing acquisition tax by deeming that it does not fall under the above provisions, the case affirming the judgment below which held that the above steel Dong cannot be excluded from acquisition tax reduction or exemption under the above provisions solely on the ground that Gap corporation is a company engaging in real estate development business

Article 276 (1) of the former Local Tax Act (Amended by Act No. 9924, Jan. 1, 2010) (see current Article 78 of the Restriction of Special Local Taxation Act)

SimCOM Co., Ltd. (Law Firm Sejong, Attorneys Clerks et al., Counsel for the defendant-appellant)

Si interest market (Law Firm KEL, Attorneys Lee Young- Line et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2010Nu4430 decided November 18, 2010

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the grounds of appeal Nos. 2 and 3

Article 276 (1) of the former Local Tax Act (amended by Act No. 9924, Jan. 1, 2010; hereinafter the same shall apply) provides for the reduction of 50/100 of the acquisition tax and registration tax on real estate acquired by a person (including a person who intends to lease real estate for factories to a small or medium enterprise owner) who intends to construct or extend a building for industrial use, research facilities, or experimental production prescribed by Presidential Decree (hereafter referred to as "industrial complex, etc." in this Article) within an industrial complex designated under the Industrial Sites and Development Act, an inducement area under the Industrial Cluster Development and Factory Establishment Act, or an industrial technology complex constructed under the Act on Special Cases concerning Support of Technoparks (hereafter referred to as "industrial technology complex, etc." in this Article) for the first five years from the date on which the tax liability becomes effective (in cases of an industrial complex located in an area other than the Seoul Metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act), if such real estate is not used directly for the use of industrial complex, etc. within three years from the date, or is additionally collected.

The court below acknowledged the facts as stated in its reasoning based on adopted evidence, and determined that even if the plaintiff is a company operating real estate development business or real estate sales business, it can not be excluded from the acquisition tax and registration tax exemption provided in the main sentence of Article 276 (1) of the former Local Tax Act, since there is no evidence to deem that the steel of this case had sold or entered into a negotiated contract before approval for use was granted, it is also included in the construction of new factories, such as acquisition tax and registration tax exemption provided in the main sentence of Article 276 (1) of the former Local Tax Act. In light of the following, the court below determined that even if the plaintiff is a company running real estate development business or real estate sales business, it can not be excluded from the main sentence of Article 276 (1) of the former Local Tax Act, since it constitutes a newly constructed real estate for the purpose of sale from the plaintiff's original purpose.

In light of the above legal provisions and the records, the above judgment of the court below is just, and there is no error of law such as misconception of facts or incomplete hearing due to the violation of the rules of evidence, as alleged in the grounds of appeal. The defendant only submits new materials which have not been investigated as evidence in the fact-finding court to the court of final appeal, while disputing the fact-finding of the court below. However, the parties to the final appeal cannot dispute the fact-finding of the court below by submitting new evidence. Thus, this part of

In addition, even if the Plaintiff newly built the steel club for the purpose of selling it, the lower court’s determination that the steel club of this case cannot be immediately excluded from the reduction and exemption of acquisition tax and registration tax as stipulated in the main sentence of Article 276(1) of the former Local Tax Act merely is a family and additional judgment. Therefore, as seen earlier, the lower court’s determination that the Plaintiff cannot be deemed to have newly constructed the steel club of this case for the purpose of selling it from the original point of view is justifiable, even if the lower court’s determination was erroneous as alleged in the grounds of appeal, it cannot affect the conclusion of the judgment, and thus, the allegation in the grounds of appeal on

2. Regarding ground of appeal No. 1

Article 224-2 Subparag. 1 of the former Enforcement Decree of the Local Tax Act (wholly amended by Presidential Decree No. 22395, Sept. 20, 2010; hereinafter the same) stipulates one of the “industrial buildings, etc. for which acquisition tax and registration tax are reduced” as “industrial buildings, etc.” under Article 2 of the Industrial Sites and Development Act and buildings for distribution facilities directly related thereto.

After finding the facts stated in its reasoning based on adopted evidence, the lower court determined that the Plaintiff’s use of the instant steel distribution facilities to support the companies located in the Silified National Industrial Complex, as sold from the Korea Industrial Complex, constituted a new steel distribution facility for supporting the companies located in the Silified National Industrial Complex, and obtained approval for use of the instant steel building after newly building the instant steel building; the instant steel building shows significant differences in its structure and purpose of use, occupant enterprise’s character, user attitude, etc. In light of the following, the lower court determined that the instant steel building constitutes a new construction of distribution facilities for supplying materials or parts necessary to conduct steel-related manufacturing business at a factory in the Silified National Industrial Complex, or selling goods manufactured at the factory, etc., and thus, constitutes an industrial building under Article 276(1) main sentence of the former Local Tax Act and Article 24-2 of the former Local Tax Act.

In light of the above provisions and records, the above judgment of the court below is just and acceptable, and there is no error in the misapprehension of legal principles as to "building for distribution facilities" provided in the main sentence of Article 276 (1) of the former Local Tax Act and Article 224-2 subparagraph 1 of the former Enforcement Decree of the Local Tax Act, misconception of facts and incomplete hearing due to violation of the rules of evidence, as otherwise alleged

3. Conclusion

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 Kim Yong-deok (Presiding Justice)