(a) Whether the value of the upper part of a road which is actually constructed and provided as a road within the land to be transferred and used free of charge falls under the “facility cost” and “improvement cost” as provided by Article 45(1)2 of the former Income Tax Act (affirmative);

(b) Where the transfer and acquisition value is calculated based on the standard market price and the necessary expenses are calculated and reported based on the actual amount of expenditure, the amount of necessary expenses to be deducted

(c) Method of calculating the transfer value and acquisition value of land located within a specific area only at the time of transfer;

A. Article 92(2)4 of the former Enforcement Rule of the Income Tax Act (amended by the Presidential Decree No. 11812 of Dec. 31, 1984) provides that "in the case where a road is provided without compensation to the State or a local government" under Article 47 subparag. 4 and subparag. 6 of the Enforcement Rule of the same Act (amended by the Ordinance of the Ministry of Finance and Economy No. 1555 of Feb. 28, 1983) does not necessarily refer to cases where the ownership of the road is transferred without compensation to the State or the local government, but it also refers to cases where the State or the local government allows the State or the local government to provide the road free of compensation for public life. Thus, even if the State or the local government did not provide the road for common use, if it is substantially constructed within the transferred land so that the general public can use it without compensation, and if the ownership lose its economic value, the value of the road shall be deemed as the value of the land as revised under Article 47 subparag. 248 subparag. 26 of the former Enforcement Rule (1). 47.

B. According to Articles 23(4) and 45(1) of the former Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982), Article 94 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 11812 of Dec. 31, 1985), and Article 47(2) of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1674 of Apr. 4, 1986), a transferor shall calculate the transfer value and acquisition value based on the standard market price based on the standard market price, and necessary expenses (facility cost, improvement cost, capital expenditure, transfer cost, etc.) other than the acquisition value shall be calculated based on the actual expenditure amount, and even if a report is filed pursuant to Articles 95 and 100 of the Income Tax Act, if necessary expenses can be confirmed based on documentary evidence submitted at the time of the report, the actual payment shall be uniformly deducted from the transfer value based on the standard market price at the time of acquisition.

(c) In calculating the transfer income tax, where the transferred land is located in a specific area as determined by the Commissioner of the National Tax Service at the time of transfer, the transfer value and acquisition value shall be computed by the standard market price under the Local Tax Act both at the time of acquisition

A. Article 45(1)2(b) of the former Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982); Article 23(4), Article 94 of the Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982); Article 94(2)4 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 11812 of Dec. 31, 1985); Article 47 subparag. 4, Article 47 subparag. 6, and Article 47(2) of the Enforcement Decree of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1555 of Feb. 28, 1983); Article 23 of the Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982); Article 170 of the Enforcement Decree of the same Act

A. Supreme Court Decision 82Nu65 delivered on September 14, 1982, Supreme Court Decision 87Nu728 delivered on November 10, 1987, Supreme Court Decision 88Nu1646 delivered on June 28, 198

Plaintiff

Head of Western Tax Office

Seoul High Court Decision 85Gu407,648 delivered on October 16, 1986

The part of the judgment of the court below against the plaintiff is reversed, and the case is remanded to the Seoul High Court.

The defendant's appeal is dismissed.

The costs of appeal dismissed shall be assessed against the defendant.

1. We examine the grounds of appeal by Defendant Litigation Performers

In light of the records, the judgment of the court below which recognized the fact that the plaintiff paid KRW 58,507,00 as improvement expenses for the creation of the transferred asset of this case as the housing site shall not be deemed to be erroneous in the determination of credibility of evidence in violation of the rules of evidence, and therefore there is no reason to

2. We examine the Plaintiff’s grounds of appeal.

(a) As to the first ground for appeal:

(1) The court below held that even if the plaintiff provided a new road on the land for the convenience of using the transferred land of this case for the purpose of the convenience of using the transferred land of this case, according to Article 45(1)2 of the Income Tax Act which was enforced at the time of the transfer of the transferred land of this case (1982 and 1983), Article 94(2)4 of the Enforcement Decree of the Income Tax Act, and Article 47 subparag. 4 of the Enforcement Rule of the same Act, the value of the land donated on the road newly constructed for the convenience of land use shall be appropriated as necessary expenses only if the site of the road was granted free of charge to the State or a local government. Since there is no evidence to prove that the road constructed for the convenience of using the transferred land of this case was granted free of charge to the State or a local government, the value of the land of this part does not constitute "facility cost and improvement cost" as stipulated in Article 4

(2) However, in the calculation of gains on transfer, Article 45 (1) 2 of the Income Tax Act, which was enforced in 1982 and 1983, provides that "facility costs and improvement costs" as one of the necessary expenses to be deducted from the transfer value in the calculation of gains on transfer. According to Article 94 (2) 4 of the Enforcement Decree of the same Act and Article 47 (4) and 6 of the Enforcement Rule of the same Act, "If a road is newly constructed on the relevant land for the convenience of land use and has been provided without compensation to the State or a local government" as well as "facility costs and improvement costs". It does not necessarily mean that "if a road is provided without compensation to the State or a local government, it shall be deemed that the road is provided without compensation to the State or a local government for the same purpose as "the cost of improvement and improvement of the land" and "the value of the new road shall be deemed as "the value of the land which is provided without compensation to the State or a local government," and it shall be deemed that it constitutes "the public use costs" if it is not provided without compensation.

Therefore, the court below's decision, which held that the value of the land on the road does not constitute "facility cost and improvement cost" as provided by Article 45 (1) 2 of the Income Tax Act solely on the ground that there is no evidence to support that the road newly constructed for the convenience of the use of the transferred land in this case was provided to the State or a local government without compensation, is erroneous in the misapprehension and application of the law, and it is obvious that such illegality has affected the conclusion of the judgment. Thus, there is a reason to argue that the part against the plaintiff among the judgment of the court below which

(b) On the second ground for appeal:

(1) According to Article 45 of the Income Tax Act, Article 94 and (5) of the Enforcement Decree of the same Act, Articles 1 and 3 of the Addenda (amended by Presidential Decree No. 11812, Dec. 31, 1982; Presidential Decree No. 11812, Dec. 31, 1985); Article 47(2) of the Enforcement Rule of the same Act, Articles 1 and 4 of the Addenda (amended by Ordinance of the Ministry of Finance and Economy No. 1555, Feb. 28, 1983) where the transferor fails to make a preliminary and final return on transfer income at the time of calculating the transfer value based on the standard market price, or where it is impossible to verify the actual payment of necessary expenses by documentary evidence submitted, the court below held that the Plaintiff’s assertion to the effect that the transfer value and acquisition value should not be recognized as necessary expenses when calculating the transfer value based on the standard market price as in this case.

(2) However, Articles 23(4) and 45(1)1 (amended by Act No. 3576, Dec. 21, 1982) of the Income Tax Act, which were enforced at the time of 1983, stipulate that "transfer value" and "acquisition value, which is one of the necessary expenses to be deducted from the transfer value, shall be based on the standard market price at the time of transfer and the time of acquisition of the assets, except as otherwise prescribed by the Presidential Decree. Article 45(1) of the Enforcement Decree of the Income Tax Act provides that "The acquisition value" shall be calculated based on the standard market price at the time of transfer and the time of acquisition of the assets, and Article 94(1) through (4) of the same Act provides that the transfer value shall be deducted from the transfer value in calculating transfer margin. On the other hand, Article 94(5) of the same Act (amended by Presidential Decree No. 10977, Dec. 31, 1982); Article 48(2)19 of the same Act provides that the transfer value shall be excluded from the transfer value.

Meanwhile, according to the facts duly established by the court below and evidence, the plaintiff acquired and owned 17 lots of land, which is 1982, and transferred 14 lots of land among them to 1983. As to the transfer income belonging to the year 1982, it is clear that the plaintiff submitted a detailed statement of necessary expenses (facility expenses, improvement expenses, capital expenses, transfer expenses, etc.) disbursed for the whole 17 pieces of land and related evidential documents, along with the detailed statement of necessary expenses (facility expenses, improvement expenses, and necessary expenses) and related evidentiary documents for the whole 17 pieces of land, and it is obvious that the plaintiff submitted a detailed statement of distribution by land calculated in proportion to the area of 14 parcels of land transferred to 1982 among the total necessary expenses. Thus, with respect to the transfer income belonging to the year 1983, even if the plaintiff did not make a report under Articles 95 and 100 of the Act on the transfer income belonging to the year 1982, the amount of transfer income accrued to the plaintiff's land should be deemed as necessary expenses paid for 13 years 1983 or more.

In rendering the instant taxation, the Defendant also calculated the tax base by deducting the amount of KRW 5,58,30 (3,50,000 + 2,238,300) as necessary expenses deemed to have been disbursed by the Plaintiff in the calculation of the amount of the instant taxation, KRW 4,178,647 (2,701,94 + 1,476,703) from the total amount of the land transferred in 1982, KRW 1,409,646 (648,049 + 761,597) from the transfer value in proportion to the amount of the instant taxation, and in calculating the amount of the respective gains accruing from the transfer of the year 1983, the amount of the said tax base was calculated by deducting the amount of the said tax base from the transfer value in proportion to the amount of the actual gains accrued in 1982, KRW 605,7085,6085,605,705,7085,6701,607,7007,7

Therefore, on the ground that the plaintiff did not report the transfer income of the portion belonging to the year 1983 pursuant to Articles 95 and 100 of the Act, the court below erred in the misapprehension and application of laws and subordinate statutes, and it is obvious that the amount calculated by adding 7/100 to the standard market price at the time of its acquisition should be recognized as necessary expenses, and such illegality is affected by the conclusion of the judgment. Therefore, the part of the judgment below against the plaintiff among the judgment below is reversed.

3. Although the Plaintiff did not claim as the ground of appeal, it will be pointed out more as to whether the part against the Plaintiff among the judgment below against the Plaintiff is reversed or not. According to the facts and related evidence duly confirmed by the court below, it is clear that the land located in the specific area designated by the Commissioner of the National Tax Service at the time of the transfer at the time of the transfer of the land that the Plaintiff transferred to October 28, 1983, but the land located in the specific area at the time of the transfer, but was not located in the specific area at the time of the acquisition. Thus, even though both the transfer value and the acquisition value cannot be calculated by the standard market price of taxation under the Local Tax Act, the court below held that the transfer value of the above land should be calculated by the conversion method as prescribed by the Ordinance of the Ministry of Finance and Economy. In this regard, the court

4. Ultimately, since the plaintiff's appeal is justified, the part of the judgment below against the plaintiff is reversed, and the case is remanded to the court below. The defendant's appeal is dismissed, and the costs of appeal as to each part of the appeal are assessed against the defendant. It is so decided as per Disposition by the assent of all participating judges.

Justices Yoon Sang-hoon (Presiding Justice)