Appellate Court Decision 201J2644 ( November 21, 2011)

It is legitimate to calculate the transfer margin on the basis of the standard market price by deeming that the actual transfer value cannot be confirmed in the exchange transaction.

In addition to the absence of market price appraisal at the time of exchange, there is a big difference between the value of each real estate subject to exchange and the sale contract and the value of the real estate exchanged in a meral and the retroactive appraisal conducted after the disposition of imposition, and the real value of each real estate subject to exchange is not consistent.

2012Revocation of disposition of revocation of imposition of capital gains tax

IsaA

Head of Jeju Tax Office

September 26, 2012

October 17, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax of KRW 000 for the year 2008 against the Plaintiff on May 1, 201 is revoked.

1. Details of the disposition;

A. The plaintiff purchased each real estate listed in attached Form 1 (A) through (f) and on March 28, 1997.

On October 9, 2001, the registration of ownership is completed, and the buildings listed in attached Form 1(e) are newly constructed, and the registration of ownership is completed on October 9, 201 (hereinafter referred to as "each real estate listed in attached Form 1(1)").

B. On August 2008, the Plaintiff exchanged each of the instant real estate, each of the instant real estate, each of the instant real estate, each of the real estate, and each of the real estate listed in paragraph (a) and paragraph (2), and each of the real estate listed in paragraph (d) (hereinafter referred to as “exchangeed real estate”) listed in attached Table 1, Section 2, and Section (2), and received KRW 00 from KimBB or Co., Ltd.

C. On October 31, 2008, the Plaintiff made a preliminary return on the tax base of transfer income to the effect that no transfer income tax exists because the acquisition value of each real estate of this case was calculated as 000 won and the transfer value was calculated as 000 won.

D. On May 1, 2011, the Defendant calculated the standard market price of each of the instant real estate in the instant case on the ground that the Plaintiff’s actual survey results that it is difficult to regard the transfer value and acquisition value reported by the Plaintiff as the new land transaction value, and then corrected and notified KRW 000 of the transfer income tax for the year 2008 (hereinafter “instant disposition”).

E. On July 18, 2011, the Plaintiff appealed to the Tax Tribunal for a trial on July 18, 201, and on July 2011

11.21. The dismissal was made.

[Ground of Recognition] The non-strifed facts, Gap evidence 1 through 4, 7, 9, and Eul evidence 1 through 4 (including evidence attached to each provisional lot number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff finally evaluated and exchanged the value of each real estate in this case with 000 won in total, and 000 won in total, while KimB received 000 won in the difference from the KimB. Although the plaintiff and KimB stated the value of each real estate in the real estate sales contract dated August 10, 2008 as the sum of the value of each real estate in this case ("00 won" stated in the real estate sales contract dated August 10, 2008) and the sum of the value of the exchanged real estate was 00 won in total, and even if the market price of each real estate and exchange real estate in this case did not necessarily undergo market price appraisal at the time of exchange under the Income Tax Act, the actual transfer value of each real estate in this case can be deemed to be 00 won in consideration of the fact that the plaintiff sold the exchanged real estate to a third party, not the actual transaction price in this case. Nevertheless, the disposal of each real estate in this case is unlawful.

(b) Related statutes;

Attached Form 2 shall be as shown in attached Table 2.

(c) Fact of recognition;

(1) On August 10, 2008, in the name of the Plaintiff, KimBB, and Suk on the real estate sales contract (Evidence No. 4) in the name of August 10, 2008, the Plaintiff stated that “the Plaintiff shall transfer each of the instant real estate (it is not indicated in the separate real estate list No. 1(e) in the separate real estate list, but it seems to have been omitted by mistake, and that “The Plaintiff shall transfer the exchanged real estate to the Plaintiff, and pay KRW 00 in cash,” and that “The Plaintiff’s real estate shall be KRW 00, in the context of the special agreement, and that “The real estate of Seopo and Jeju building shall be registered and shall be 00,000,000,000,000,000,000,000,000,000,000.”

(2) After that, the Plaintiff and KimBB prepared a real estate sales contract for each of the real estate in this case and exchanged real estate in each of the following items: (a) of the real estate in this case, the sales price for each of the real estate in attached Form 1(a) and (b), and (e) of the real estate in attached Form 1(c), and the sales price for each of the real estate in attached Form 1(c) and (b) of the exchanged real estate in attached Form 12(a), and the sales price for each of the real estate in attached Form 2(c) and (d) is 00 won, respectively.

(3) The note(B) discovered in the course of the tax investigation reveals that the transfer value of each of the instant real estate is KRW 000, and the transfer value of the exchanged real estate is KRW 000,000, and KRW 000,000,000,000,000,000,00,000,000,00

(4) The Plaintiff and KimB did not appraise the market price of each of the instant real estate and exchanged real estate at the time of concluding the exchange contract as above. Also, each written confirmation (as referred to in paragraphs (5) and (6) prepared by the Plaintiff and KimBB, stating that “the Plaintiff would sell each of the instant real estate to Cho Jong-man, and that “the Plaintiff entered the Plaintiff’s house along with KimBBB, a licensed real estate agent, to prepare the sales contract, and that “the Plaintiff would have made a real estate sales contract with KimB, a real estate agent, to exchange each of the instant real estate exchanged with the instant real estate.”

(5) A real estate sales contract (Evidence 5-1) for each real estate listed in the Plaintiff and KimM’s name in attached Form 1-2(c) and (d) for each real estate listed in attached Form 1-2(c) of October 5, 2009, the purchase price of which is KRW 00, and the real estate sales contract (Evidence 5-2) for each real estate listed in attached Form 1-2(a) and (b) for the Plaintiff and Park NN’s name on November 16, 2010, the purchase price of which is KRW 00.

(6) As of September 24, 2008, the appraisal value of each real estate of this case as of September 24, 2008 is indicated as KRW 000,000.

[Grounds for recognition] The descriptions of Gap 3 through 5, 7, and 8, and Eul 2 through 7 (including evidence with each number), and the whole purport of the pleading

D. Determination

(1) In the calculation of gains on transfer, the actual transaction price, which is the basis for the calculation of gains on transfer, is not a general market price that reflects the objective exchange value, but the actual transaction price itself or at the time of the transaction (see, e.g., Supreme Court Decisions 2006Du7171, Apr. 26, 2007; 2006Du7171, Apr. 26, 2007); and where the transaction is an exchange, it would be a value exchange based on the monetary value of the object, and where the market price appraisal of the object of exchange is accompanied by the procedure for settlement of the difference in the appraised value, it would be possible to confirm the actual transaction price, but where it is a simple exchange, the actual transaction price shall not be confirmed (see, e.g., Supreme Court Decisions 98Du19841, Nov. 26, 199; 2009Du19465, Feb. 10, 2011)

(2) In light of the above legal principles, as seen earlier, the Plaintiff and KimBB did not undergo the market price appraisal at the time of exchange, and the value of each of the instant real estate and the exchange real estate stated in each sales contract and the joint appearance is not consistent, and even according to the retroactive appraisal made at the Plaintiff’s request after the instant disposition, the value of each of the instant real estate is 000 won, which is larger than that of the Plaintiff’s assertion that the transfer value of each of the instant real estate is 00 won, and the actual transfer value of each of the instant real estate is not verifiable.

(3) In such a case, Article 114(7) of the Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009, hereinafter the same shall apply) and Article 176-2(1) and (3) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21301 of Feb. 4, 2009), where there are cases of trading of assets having identity or similarity with the relevant assets within three months before or after the transfer date or acquisition date, the value thereof, and the period should be calculated by applying in sequence the average value of the reliable appraisal values appraised by two or more appraisal corporations, and the standard market value of the relevant assets within the above period, and even if the plaintiff sold the exchanged real estate to KimM and Park NN, it is insufficient to view that each contract constitutes cases of trading of assets having uniformity or similarity with each of the instant real estate, and there is no other evidence to view that each of the instant real estate has credibility or similarity within three months before or after the transfer date, each of the instant real estate.

(4) Furthermore, Article 100(1) of the Income Tax Act provides that when calculating gains on transfer, the transfer value shall be calculated on the basis of the actual transaction value, and the acquisition value shall also be calculated on the basis of the standard market price when the transfer value is calculated on the basis of the standard market price. Accordingly, the transfer value and the acquisition value shall be calculated on the basis of the standard market price in calculating the transfer income tax on each of the ancillary movables

(5) Therefore, the instant disposition that calculated capital gains tax based on the standard market price of each of the instant real estate is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.