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.(a)

Before the amendment by Act No. 7908 of March 24, 2006 of the former Corporate Tax Act

(a) The same shall apply;

Article 52(2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18174, Dec. 30, 2003); Article 89(2)2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18174, Dec. 30, 2003) provides that where the market price is unclear in applying Article 52(2) of the Act with respect to stocks, the value assessed by applying mutatis mutandis the provisions of Articles 38 through 39-2, and 61 through 64 of the Inheritance Tax and Gift Tax Act shall be based on the market price when applying the provision on the denial of wrongful calculation. Such burden of proving the market price, which serves as the applicable standard for the denial of wrongful calculation, is the tax authority (see, e.g., Supreme Court Decision 2013Du1035, Sept. 27, 2013).

A. The Enforcement Decree of the former Inheritance and Gift Tax Act (hereinafter “former Enforcement Decree of the Inheritance and Gift Tax Act”).

Article 54 provides that the value per share of unlisted stocks shall be calculated based on the market price as of the base date of appraisal, and where it is difficult to calculate the market price, the net profit and loss per share in principle (i.e., the weighted average amount of net profit and loss per share for the last three years per share ± the rate determined and publicly announced by the Commissioner of the National Tax Service in consideration of the distribution rate of bonds with the maturity of three years guaranteed by the financial institution ± the net asset value per share (i.e., the net asset value of

In addition, Article 56 (1) of the former Enforcement Decree of the Inheritance and Gift Tax Act is less than three years after the commencement of the business of the relevant corporation, or the amount of net profit and loss for the last three years due to a temporary contingency case.