[1] The purpose of Article 112-3 of the former Local Tax Act concerning additional collection of acquisition tax where a corporation becomes a land for non-business use after acquisition

[2] The case holding that the parent company's management rationalization constitutes "justifiable cause" under Article 112-3 of the former Local Tax Act

[1] The purpose of Article 112-3 of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994), which provides that acquisition tax shall be imposed where the pertinent land becomes non-business-use land of a corporation within five years including cases where the relevant land becomes non-business-use land of a corporation without justifiable grounds, is to prevent unproductive speculation caused by the acquisition and possession of the land for non-business purpose and to ensure the efficient use of the land.

[2] The case holding that in case where a person (i) company established by full-scale investment in the parent company was transferred the land from another subsidiary of the parent company at the time of its establishment, and used the land for the same purpose continuously after its acquisition as a factory site for its proper purpose business, and thereafter used it for two years and three months thereafter, it sold it as a part of the management rationalization plan to improve the financial soundness of the parent company, there is a justifiable reason for the above subsidiary to sell it within five years after its acquisition in light of the purport of Article 112-3 of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994)

[1] Article 112-3 of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994) / [2] Article 112-3 of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994)

[1] Supreme Court Decision 91Nu6078 delivered on February 14, 1992 (Gong1992Sang, 1066), Supreme Court Decision 92Nu16072 delivered on February 12, 1993 (Gong1993Sang, 1025), Supreme Court Decision 92Nu11664 delivered on February 23, 1993 (Gong1993Sang, 1102), Supreme Court Decision 94Nu1784 delivered on February 24, 1995 (Gong195Sang, 1497), Supreme Court Decision 95Nu9891 delivered on October 13, 195 (Gong195Ha, 3828) / [2] Supreme Court Decision 92Nu15959 delivered on September 25, 195 (Gong1995Ha9595Ha, 195)

Undo Kabrid Korea Co., Ltd. (Attorneys Choi Su-gil et al., Counsel for the defendant-appellant)

Attorney Lee Jae-ho, Counsel for the defendant-appellant

Daejeon High Court Decision 95Gu2188 delivered on September 6, 1996

The appeal is dismissed. The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Article 112-3 of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994; hereinafter the same) provides that acquisition tax shall be imposed where the relevant land becomes non-business land of a corporation within five years including cases where the relevant land is sold within five years after the corporation acquired such land without justifiable grounds. The purpose of the provision is to prevent unproductive speculation caused by the corporation's acquisition and possession of land for non-business purpose and to ensure the efficient use of the land (see Supreme Court Decision 92Nu16702, Feb. 12, 1993).

As duly determined by the court below, if the plaintiff was established as a whole as investment by the non-party U.S. C&P Co., Ltd, the parent company of May 17, 1990, and was transferred the land from another subsidiary company at the time of its establishment, and used as a factory site for manufacturing the actual container leading compounds, which is a proper purpose business, after its acquisition on December 18, 191, and sold it for the same purpose as a part of the management rationalization plan to overcome the worsening financial standing of the parent company on March 3, 1994, in light of the purport of the above provision, it is reasonable to view that there is a justifiable reason that the plaintiff sold the land of this case within five years after its acquisition in light of the purport of the above provision. Thus, the land of this case does not constitute non-business land under Article 112-3 of the Local Tax Act.

In this view, the court below is just in holding that the land in this case is not subject to acquisition tax and not subject to acquisition tax in light of its sale circumstances, and there is no error of law by misunderstanding the legal principles such as theory of lawsuit. There is no ground

Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Final Young-young (Presiding Justice)