Seoul Administrative Court 2009Gudan12924 ( October 23, 2010)

Cho High Court Decision 2008Du3475 (Law No. 30, 2009)

If the registration of ownership transfer has been made on the register, the procedure and cause shall be deemed legitimate.

If the registration of transfer of ownership on the register of real estate has been made, the assertion that there is real acquisition value by the sale is not trustable by relevant evidence, unless the registration of transfer of ownership has been made due to the donation, because it is presumed that the procedure and cause are justified.

2010Nu9855 Revocation of Disposition of Imposing capital gains tax

Maap○

○ Head of tax office

Seoul Administrative Court Decision 2009Gudan12924 decided February 23, 2010

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance is revoked, and the defendant revoked the disposition of imposition of capital gains tax of KRW 60,49,110 for the plaintiff on August 11, 2008.

1. Details of the disposition;

A. On September 12, 1997, the Plaintiff completed the registration of ownership transfer on April 20, 1997 with respect to the land of 11,504 square meters (hereinafter “instant land”) which was originally owned by ○○○○-gun, Gangwon-do, ○○○-gun, ○○○-do, 62-4, 11,504 square meters (hereinafter “instant land”).

B. On September 7, 2007, the Plaintiff transferred the instant land to ○○○-gun for consultation (hereinafter “instant transfer”). On November 28, 2007, the Plaintiff filed a prior report on and voluntarily paid transfer income tax at KRW 17,659,556, by making the acquisition value and the transfer value as the actual transaction value, alleging that the Plaintiff acquired the instant land at KRW 200 million by purchase of KRW 200,000,000.

C. On August 11, 2008, on the ground that the Plaintiff acquired the instant land as a gift not a sale and purchase, the Defendant calculated transfer margin and notified the Plaintiff of KRW 60,49,110 for the additional amount of transfer income tax for the year 2007 (hereinafter “instant disposition”) on the ground that the Plaintiff calculated transfer margin by deeming the acquisition value of the instant land as the acquisition value of the instant land under the Inheritance Tax and Gift Tax Act, and the Plaintiff under-reported the tax base of transfer income tax by improper means.

D. On April 2, 2009, the Plaintiff appealed to the instant disposition and filed an appeal with the Tax Tribunal, but was dismissed on June 30, 2009.

[Ground of recognition] Evidence No. 1, No. 5, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although the Plaintiff cannot obtain permission for transaction of the instant land within the land transaction permission area because he purchased KRW 200 million from the largestA, the instant land was donated and completed the registration of ownership transfer, the Plaintiff’s disposition of this case, which was made after setting the acquisition value of the instant land on the premise that the Plaintiff acquired the instant land as a donation contrary to the fact, is unlawful, and the instant disposition of this case, which was made after correcting the transfer income tax, is unlawful, and ② the real estate sales contract submitted by the Plaintiff was not made by falsely indicating the purchase price as 200 million won. Thus, the Plaintiff cannot be deemed to have underreported the tax base of the transfer income tax by unjust means, but the Defendant’s imposition of additional tax on additional tax

(b) Related statutes;

The relevant Acts and subordinate statutes shall be as shown in the attached Form, and the statutes related to the calculation of capital gains tax shall be as follows:

1) The tax base of capital gains tax shall be calculated by the method of deducting the basic deduction of capital gains from the capital gains amount, and the capital gains amount shall be calculated by deducting the necessary expenses and the special deduction of long-term holding from the transfer value in the case of land, and the acquisition value in the necessary expenses shall be included, and such transfer value and acquisition

2) However, in calculating gains on transfer of donated assets, Article 163(9) of the Enforcement Decree of the Income Tax Act provides that as of the date of donation, the value assessed under Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the date of donation shall be viewed as the

3) Article 60(1) of the Inheritance Tax and Gift Tax Act provides that the value of donated property shall be based on the market price as of the date of donation, and Article 60(2) provides that where it is difficult to calculate the market price, the value of the donated property shall be based on the value appraised in accordance with the methods prescribed in Articles 61 through 65.

C. Determination by issue

1) Whether the Plaintiff purchased the instant land

(A)Criteria for determination

In principle, the tax authority shall bear the burden of proof regarding the facts that meet the requirements for taxation, such as the reason for taxation, tax base, etc. in a lawsuit seeking revocation of the disposition imposing tax, but inasmuch as the registration of ownership transfer has been completed in the register of real estate, the procedure and the presumption that the cause of the disposition is legitimate (see, e.g., Supreme Court Decision 2010Da21702, Jul. 22, 2010). As for the land of this case, the registration of ownership transfer has been completed due to the gift, the Plaintiff must prove that the reason for acquiring the land of this case is the sale and purchase,

B)Judgment

In light of the following facts, there is no dispute between the parties, or recognized by the respective descriptions of the evidence Nos. 3, 1, 3, and 4 and the purport of the entire pleadings, it is difficult to recognize the Plaintiff’s assertion that the Plaintiff purchased the instant land only with the testimony of the Plaintiff Nos. 3 through 6 (including the provisional number) and the witness KimB of the first instance trial, or it is difficult to believe the above evidence. Therefore, it is impossible to recognize that the Plaintiff purchased the instant land. Therefore, the instant disposition is lawful, and the Plaintiff’s above assertion is without merit.

(1) The Plaintiff completed the registration of ownership transfer due to the donation on April 20, 1997 in order to avoid the procedure for avoiding the procedure for land transaction permission by falling under the land transaction permission zone. However, since the instant land was designated as the land transaction permission zone from April 22, 1997 to April 21, 1999, there was no reason to enter the land transaction permission as the gift for the purpose of evading the land transaction permission.

(2) In addition, the sales contract date submitted by the Plaintiff is April 23, 1999. The date when the Plaintiff paid the down payment to KimB who led the sales contract on his/her behalf is also consistent with the date of April 23, 1999, which is the grounds for registration on the register.

(3) Furthermore, the Plaintiff completed the registration of ownership transfer with the seal of approval under the Act on Special Measures for the Registration of Real Estate on the Real Estate Donation Contract for the instant land with respect to the real estate donation contract. Under the premise that the instant land was donated, the Plaintiff paid KRW 2,991,040 to the Plaintiff on March 31, 2003 without any specific objection.

(4) While the Plaintiff submitted a receipt to the effect that from KimB, the Plaintiff, on his behalf, paid the purchase price to the seller, he received the purchase price from the Plaintiff, he did not submit a receipt that KimB received the purchase price from the seller.

(5) In order to find out the financial data that the Plaintiff paid the purchase-price to the seller, the Plaintiff requested each financial institution to submit the financial data on the seller’s bestA. However, according to the financial data on the LA, the Plaintiff himself/herself was unable to submit all the financial data on which the purchase price was prepared. Furthermore, according to the financial data on the LA, there appears to be a considerable amount of transaction between March and May 5, 1997, but the source of the money does not appear, and it does not coincide with the date or amount set by the Plaintiff as the payment date.

2) Whether the imposition of additional tax on negligent tax returns is lawful

(A)Criteria for determination

In order to facilitate the exercise of taxation rights and the realization of tax claims, the taxpayer's intention and negligence is not considered as administrative sanctions imposed in accordance with the law if the taxpayer violates the reporting and tax liability prescribed by the law without justifiable grounds, and the land or mistake of the law does not constitute justifiable grounds.

B)Judgment

However, as seen earlier, the Plaintiff’s acquisition of the instant land is not a sale but a gift. As such, the Plaintiff’s submission of two copies of a sales contract in filing a report on the tax base of capital gains tax was an under-reported return of the tax base of capital gains tax in the manner of making false evidence or a false document under Article 27(2)2 of the Enforcement Decree of the Framework Act on National Taxes by improper means.

Therefore, the disposition of this case, which determined the transfer income tax amount by adding the additional additional tax on negligent tax returns, is legitimate, and the plaintiff's above assertion is

3. Conclusion

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