In imposing capital gains tax, the actual transaction value is verified, but the transfer value is denied by wrongful calculation.

Even if the actual transaction price is confirmed as a transaction with a juristic person and the transfer price is confirmed as a transaction with a related party, if the transaction price is denied, the transaction price is confirmed as the actual transaction price and the transaction price is reduced unfairly, so the transaction price itself is confirmed as the transaction price is not based on the standard market price, so the transaction price is not based on the actual transaction price that is denied, so if the transaction price cannot be based on the transaction price that is denied, the transaction price is the actual transaction price. In this case, the transaction price means the value of the assets normally formed by the transaction, but if the transaction price is not known, the market price of the reliable appraisal institution can be based on the market price appraisal price.

Article 23(2) of the Income Tax Act; Article 170(1) of the Enforcement Decree of the same Act; Article 20 of the Corporate Tax Act; Article 46(2)4 of the Enforcement Decree of the same Act

Supreme Court Decision 83Nu392 delivered on November 8, 1983, 87Nu671 delivered on February 9, 1988

[Defendant-Appellee] Plaintiff 1 et al.

Head of the Tax Office;

Seoul High Court Decision 87Gu1040 decided Nov. 3, 1988

All appeals are dismissed.

Costs of appeal shall be borne by each party.

1. As to the ground of appeal by the Plaintiff’s attorney:

If the actual transaction price is confirmed as a transaction with a juristic person, the transfer price shall be based on the actual transaction price, and if the actual transaction price is not confirmed, the transfer price shall be based on the standard market price. However, as in this case, if the transfer price is recognized as unreasonably reducing the tax burden because it is between the related party and the related party, as in this case, the actual transaction price is confirmed as being denied, so the transfer price is not based on the standard market price, but on the other hand, the transfer price cannot be based on the actual transaction price where the calculation of the transfer price is denied, so if the transaction price cannot be based on the actual transaction price where the calculation of the transfer price is denied, the "market price" which is deemed as the result of the denial of the transaction calculation should be considered as the actual transaction price. In this case, the market price means the price of the asset which is normally formed by the ordinary transaction, but if the transaction price is not known, the market price of the reliable appraisal institution can be considered as the basis of the market price appraisal price (see, e.g., Supreme Court Decision 8Nu298. 198.

In the same purport, the court below's determination of transfer margin by considering the appraisal market value of the appraiser of the court below as the transfer value is proper, and there is no error of law such as theory

2. As to the grounds of appeal by Defendant Litigation Performers

It is reasonable and acceptable that the court below concluded the transfer contract of this case on May 24, 1985 and paid the price in full on June 28 of the same year, and there is no error of law by misconception of facts due to the violation of the rules of evidence.

3. The arguments are without merit, and all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Yong-ju (Presiding Justice)