Seoul Administrative Court 2009Guhap15074 ( October 23, 2009)

National High Court Decision 2007Du5059 ( December 31, 2008)

Amount received in excess of the acquisition value of shares after transferring equity shares shall be deemed as deemed dividend.

Where a person transfers equity shares and receives repayment of the real estate price in excess of the equity shares, the amount of excess shares shall be deemed as deemed the fictitious dividend, and the transferred shares remain in the list of investors due to the failure to complete the incineration procedure.

The contents of the decision shall be the same as attached.

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition of global income tax of KRW 90,147,640 against the Plaintiff on May 1, 2007 by the Defendant shall be revoked.

1. Acceptance of a judgment of the court of first instance;

The reasoning for the court's explanation concerning this case is as stated in the reasoning for the judgment of the court of first instance, except for the following modifications or additions. Thus, it is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

[Supplementary Use]

1. On May 15, 2007, 4th 12th 12th 2007, followed by May 1, 2007.

[Supplementary Parts]

Of the reasoning of the judgment of the first instance court, the part on the determination as to whether the disposition of the second 2. Disposition is somewhat inappropriate to acknowledge the Plaintiff’s assertion that the instant disposition was unlawful against the principle of substantial taxation as to the person to whom the pertinent transaction belongs or the substance of the transaction, and there is no other evidence to acknowledge it.”

○ Judgment on the Plaintiff’s argument in the trial of the political party

The plaintiff asserts that the disposition of this case was unlawful after the lapse of five years from the 1995 exclusion period of imposition, which is the time when the right to impose global income tax belongs, and that the tax base has not been determined by reflecting the increase in the value of the real estate owned by the new transport as of the 2005 when assessing the acquisition value of the plaintiff's share in the real estate of this case, even if the portion exceeding the acquisition value of the plaintiff's share in the real estate of this case is deemed as income as the constructive dividend income under Article 17 (2) 1 of the Income Tax Act.

① The time when the Plaintiff’s assertion is deemed as having actually decreased the Plaintiff’s equity interest by acquiring the ownership of the instant real estate from the Young Transport according to the instant conciliation, and the instant disposition was lawfully made within the exclusion period of imposition of global income tax. As such, the Plaintiff’s assertion is without merit.

(2) The capital of a limited liability company, such as health stand and personal transport, is not changed unless it has gone through the procedures for capital increase or capital decrease. As such, it is not necessary to assess the acquisition value of the Plaintiff’s investment shares by reflecting the increase in the value of real estate owned by personal transport as of 2005.

2. Conclusion

Therefore, the judgment of the first instance court is legitimate, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.