Cho High-2013-Seoul Government-4862 ( March 14, 2014)

The Plaintiff’s taxation that imposes capital gains tax by deeming the transfer value of the land at issue as 3.8 billion is reasonable.

It is reasonable to view that the actual transaction price at the time of the transfer of the instant land is KRW 3.8 billion, and therefore, the Plaintiff’s assertion that the actual transaction price is KRW 2.5 billion is

Article 96 of the Income Tax Act

2014Gudan5384444 Revocation of Disposition of Imposing capital gains tax

1. The AA

1. BB director of the tax office;

October 28, 2015

January 15, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The defendant shall revoke the disposition of imposition of KRW 410,681,730 on September 1, 201 to the plaintiff on September 1, 2013.

1. Details of the disposition;

A. On August 25, 201, the Plaintiff acquired OO-dong 376-1, 376-2, 377-1, 377-2, 389-1, 389-2, 390, 391-1 land (hereinafter referred to as “instant land”) and completed the registration of ownership transfer on August 25, 201.

B. On October 31, 201, the Plaintiff made a preliminary return of KRW 454,684,170 on the premise that the acquisition value of the instant land was KRW 579,758,452, and the transfer value was KRW 2.5 billion.

C. However, on September 1, 2013, the Defendant notified the Plaintiff to pay KRW 410,681,730 (including general underreported penalty tax 31,052,670, 670, and additional tax 63,716,718, 718, 201, excluding the transfer income tax of KRW 454,684,740, which was scheduled by revising the transfer income tax of the year 201 as KRW 865,979,740, under the premise that the acquisition value of the instant land was KRW 587,81,892, and the transfer value was KRW 3.88 billion (hereinafter “instant disposition”).

D. The Plaintiff had completed the pre-trial procedure.

[Ground of recognition] Facts without dispute, Gap 4, 6, 7 evidence, Eul 8 evidence (including paper numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) The Plaintiff agreed to transfer the key land in this case and the EE environment operated by the Plaintiff on the main land in this case to SongD et al. along with the personal business EE environment operated by the Plaintiff on the main land in this case, and the EE environment, etc., set the key land in this case as KRW 2.5 billion and the EE environment as KRW 1.6 billion, so the actual transaction price at the time of transfer of the key land in this case is KRW 2.5 billion and such actual transaction price is confirmed by sales contract and land transaction permission, etc. Therefore, the Defendant’s disposition in this case premised on the premise that the transfer price is KRW 3.8 billion is unlawful.

(2) Even if the Defendant deemed that the actual transaction price at the time of transfer is not KRW 2.5 billion, the Defendant’s act that deemed the actual transaction price at the time of transfer of the instant land was determined based on a standard without any grounds. Ultimately, it constitutes a case in which it is impossible to recognize or confirm the actual transaction price, and there is no transaction example or appraisal value, and thus, the transfer price should be determined based on the standard market price. Accordingly, the Defendant’s disposition

(b) Fact of recognition;

(1) From around August 1995, the Plaintiff operated the EE Environment (hereinafter referred to as the “instant company”) on the land at issue of the instant case, and established and operated the EE Environment Co., Ltd. (hereinafter referred to as the “instant company”) on August 17, 1995, which operated OO-Gu O-dong 391-1 of the instant land at OO-si as its principal place of business.

(2) Around March 2011, the shares of the instant company were 50,000 shares, which were owned by the Plaintiff 33,500 shares, and the Plaintiff’s ASEAN owned 16,50 shares.

(3) The Plaintiff cannot continue the construction waste collection and transportation business and interim disposal business due to the expiration of the use permit for temporary use of farmland for other purposes among the key land of this case and the rejection disposition against the application for permission to engage in construction waste interim disposal business with respect to the land of this case. The Plaintiff decided to transfer the key land of this case and the instant company and the instant company to SongD, etc.

(4) The plaintiff is four contracts with SongD, SongD, and CCC regarding the transfer of the key land, etc. of this case. The main contents are as follows.

(A) The contract dated March 23, 201 entered into between the Plaintiff and SongD.

As to approximately 1300 square meters of OO-gu OO-dong 376-1, 377-1, 389-1, 390, and 391-1 land, even after the approval of the company of this case was obtained, the above land and the company of this case, together with the above land and the company of this case, shall be sold to SongD (including a third party) for KRW 4.1 billion. The above fact shall be compensated for KRW 5 billion. The sale price of the land shall be KRW 2.5 billion, and other (EE environment, etc.) shall be presented as KRW 1.6 billion.

(B) The contract dated March 25, 201 entered into between the Plaintiff and SongD.

As to approximately 1300 square meters of OO-gu OO-dong 376-1, 377-1, 389-1, 390, and 391-1 land, even after the approval of the company of this case was obtained, the above land and the company of this case, together with the above land and the company of this case, shall be sold to SongD (including a third party) for KRW 4.1 billion. The above fact shall be compensated for KRW 5 billion at the time of the violation. The sale price of the land shall be KRW 2 billion, and other (EE environment, etc.) shall be presented as KRW 2.1 billion.

(C) Contracts dated June 20, 201, concluded between the Plaintiff and SongD and CCC

Both the Plaintiff and the buyer, SongD, CCC, and 000 (hereinafter collectively referred to as the “Buyers”) concluded a sales contract with respect to the instant company (hereinafter referred to as the “company”) and the instant land as follows.

Article 1 (Sales Price)

The term "Buyer" shall pay the following sales proceeds to a "seller":

1. The purchase price for “land”: 2.5 billion won;

2. Sales proceeds to the “company”: 1.6 billion won: - Shares 200 million won, electricity 1.5 billion won, machinery 3.5 billion won, vehicle transport 400 million won, permit 200 million won, royalty 200 million won, patent fees 100 million won, soil, boxes, office fixtures 100 million won.

Article 2 (Contract Amount)

When this contract is concluded, the buyer shall pay to the seller the down payment for the company and the land of KRW 300 million.

Article 3 (End-Prohibition Day)

Any balance shall be paid on June 30, 201. When a purchaser requests the payment of any balance before June 30, 2011, the seller shall immediately comply therewith: Provided, That where the transfer of ownership is delayed due to land transaction permission, the transfer of ownership shall be made until the completion of the transfer of ownership is made.

Article 4 (Terms of Contracts)

4. At the time of the conclusion of this Agreement, the seller shall transfer to the buyer 16,50 shares in the name of FF of the Company and 9,500 shares in the name of the Plaintiff 3,500 shares in the name of the Plaintiff.

6. Notwithstanding this sales contract, the agreement entered into with SongD on March 25, 201 (if it is not sold after obtaining permission, five billion won shall be compensated) shall be valid.

9. The contract for machinery and business rights shall be signed by the seller within the limit of 1.6 billion won on the confirmation of the tax return prepared by the seller.

10. The Plaintiff’s shares out of the Company’s shares are transferred to 10,000 buyers and the remaining shares are transferred by December 25, 201, not for the purpose of exercising rights with respect to the shares of the Company, but for the purpose of tax reduction and exemption, both the seller and the buyer of the outstanding shares are attested by the fact that they are owned not for the purpose of exercising rights but for the purpose of tax reduction and exemption (the substance of the certificate of subscription is transferred to the buyer without any monetary compensation until December 25, 201).

11. When it is possible to transfer the name of an individual or corporation to a license for the business of dismantling structures of the non-party company, the license shall be transferred at the time the seller wishes (before the balance).

* Buyer Special Terms and Conditions

Of the above sale price, 2.5 billion won in full is paid by CCC, and 200 million won in the acquisition price of a legal entity, 1.6 billion won in the acquisition price of the legal entity, shall be SongD and the remaining 1.4 billion won shall be borne by CCC.

(D) Contracts on August 6, 201 with respect to the instant land between the Plaintiff and CCC

§ 1.(Sales proceeds) Sales proceeds for "land": 2.5 billion won

Article 2 (Amount of Contract) When this contract is concluded, the buyer shall pay the seller the down payment for the land to the seller in KRW 300 million.

Any balance shall be paid on August 19, 201. When a purchaser requests the payment of any balance on or before August 19, 201, the seller shall immediately comply therewith: Provided, That where the transfer of ownership is delayed due to land transaction permission, the transfer of ownership shall be made until the completion of the transfer. (Where a loan is granted by a bank for payment of any balance, the seller consents thereto.)

(5) The Plaintiff made a contract with CCC and UG (CCC) on the transfer of shares of the instant company. The main contents of the contract are as follows (However, all the date of conclusion in the contract are public notice).

(a) Party: Plaintiff, CCC, trading subject: 8,500 shares, sales proceeds: 59,500 won per share (7,000 won per share);

(b) Party: 16,500 shares for purchase and sale, 15,500 Won per share (7,000 won per share)

(c) Party: 25,00 shares for sale, 25,00 shares for sale, 25 million won for each share (1,000 won for each share)

(6) SongD paid KRW 300 million, CCC’s KRW 3.8 billion, and KRW 4.1 billion to the Plaintiff. On August 25, 2011, the Plaintiff completed the registration of ownership transfer for the instant key land. The UG was appointed as the representative director of the instant company on April 19, 201, and the UG transferred its title to 25,000 shares out of the shares of the instant company around 201 (the UG transferred 5,00 shares to Kim H) and accordingly, according to the shareholders status of the instant company on December 31, 201 and December 31, 2012, the Plaintiff, the Plaintiff, 8,500 shares, F, F, 16,500 shares, and UG owned UG shares in its name on April 19, 201.

(7) Meanwhile, the Plaintiff and WesternF paid the securities transaction tax on January 14, 2013, along with a stock transfer report to the instant company, but did not undergo the transfer procedure. Accordingly, according to the shareholder status of the instant company, the Plaintiff appears to hold 8,500 shares out of the shares of the instant company in the year 2013.

(8) The land transaction permit issued by the head of the OO on August 5, 201 and the real estate transaction contract completion certificate issued on August 25, 2011 stated the transfer value of the pertinent land as KRW 2.5 billion. The standard market price as at the time of 2011 the instant land was KRW 2.57.7 billion, and the appraisal value of the instant land as at the time of the J bank’s request at the time of July 28, 2011 (excluding, however, OOO-dong OO-dong 376-2, 377-2, 389-2) is KRW 4.2567 billion.

(9) According to the management ledger of fixed assets for structures, machinery, equipment, vehicle transport equipment, and heavy equipment in 2010, the total book value of the non-party company in the instant case is KRW 79,39,800, and the total book value in the instant case is KRW 290,291,231.

(10) On November 29, 2013, the Plaintiff initially appeared at the tax office and the instant company entered into an agreement with OO-dong 376-1, 377-1, 389-1, 390, 391-1, after obtaining permission, to trade the instant company's 4.1 billion won, and at the time, the Plaintiff was well aware of the existence of the company's value. The Plaintiff entered into the said agreement and discussed with the tax accountant in charge one week after preparing the said agreement and discussed with the pertinent tax accountant, requesting to prepare a written contract to sell the instant company's 2.5 billion won and the instant company for 1.6 billion won, and agreed to do so. The instant company stated to the effect that the instant company acquired the instant company's 3.8 billion won land and made a statement to the effect that it acquired the instant company's shares as 3 billion won.

(11) The CCC appeared in the court and stated that the surrounding market price of the instant land at the time is three million won per square, and that it should not be able to make a ententrative plan to reduce the sale price of the instant land, the Plaintiff and SongD made a contract by setting the purchase price of the land at 2.5 billion won, and it reported that the Plaintiff and SongD reported the purchase price of the instant land at 2.5 billion won to the Plaintiff. The Plaintiff paid 3.8 billion won with the purchase price of the instant land, and SongD paid 3.3 billion won to the Plaintiff with the purchase price of the instant company, and paid 3.8 billion won with the purchase price of the instant company, and the authority of the instant company shares was divided by half, but SongD testified testified testified to the effect that it did not make a promise and that it did not inform itself of a half of the shares.

[Ground of recognition] Unsatisfy, Gap 1 through 3, 5, 8 through 12, 16, 17, 19, 30, Eul 4 through 11, testimony of the witnessCC, result of an order of submission of tax information to the director of the OO of this court for submission of tax information, the whole purport of the pleadings

C. Determination

(1) In full view of the following circumstances, it is reasonable to view that the actual transaction price at the time of the transfer of the instant land is KRW 3.8 billion, and the Plaintiff’s assertion that the actual transaction price at the time of the transfer is KRW 2.5 billion is without merit.

① The key land in the instant case and CCC, the purchaser of the instant company’s shares, etc., stated that the purchase price of the instant land was KRW 3.8 billion, and CCC bearing KRW 3.8 billion on the instant key land did not acquire the shares of the instant company or transfer the assets of the instant company, in addition to having completed the registration of ownership transfer concerning the instant key land, (a) there was no data to take over the shares of the instant company or to take over the assets of the instant company (b) (around January 201, 2010, the OCO reported that it transferred the shares toCC).

② If the sale price of the instant land is 2.5 billion won in connection with the transfer of the instant land, there exists a contract stating that the purchase price of the instant land is 2.5 billion won (the contract dated March 23, 201, the contract dated June 20, 2011, and the contract dated August 6, 2011). However, the contract signed on March 23, 2011 is the same and the remaining part except for the contract signed on March 25, 2011, and the contract signed on March 23, 2011, it is difficult for the Plaintiff to claim that the sale price of the instant land is 2.5 billion won in terms of the fact that the sale price of the instant land was 2.5 billion won in consideration of the fact that the sale price of the instant land was 2.5 billion won in terms of the acquisition and sale price of the instant land, and that it is difficult for the Plaintiff to claim that the sale price of the instant land was 10.4 billion won in terms and conditions of the instant contract.

③ The Plaintiff asserts that the value of the instant company, etc. reaches KRW 1.6 billion. However, according to the statement of financial position for 2010 of the instant company, most of the instant company’s assets were 131,084,698 won when excluding provisional payment from the total capital, and the instant company was temporarily closed at the time of sale and purchase. Even according to the Plaintiff’s assertion, waste interim disposal business was possible only in an area where the land category is a site. Even if it was possible to conduct waste interim disposal business, it was extended for more than three years, but it was extended for more than three years, but it was necessary to resume business due to an extension of permission or renewed permission, and it was difficult to view the instant company’s total amount of KRW 900,000,000,000 to KRW 1.6 billion,000,0000,000,000 won, which was excluding the total amount of KRW 1.6 billion,000,000,00 won.

④ Around 2011, the officially assessed individual land price of the instant land was KRW 2.577 billion, and the appraised value of a part of the instant land of J bank’s J bank was KRW 4.2567 billion, and CCC testified to the effect that the instant land was KRW 3 million at the time of the instant land.

(2) The Plaintiff’s assertion to the effect that, at the time of the transfer of the instant land, an estimated investigation should be conducted as long as the actual transaction price is deemed to be KRW 3.8 billion, is without merit without further review.

3. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.