early 201Gu1837 (Law No. 29, 2011)

land for business because it does not meet the requirements for the period of non-business land;

A lawsuit for claim for transfer registration of ownership filed after acquisition of land constitutes a lawsuit for ownership and is not a non-business land during the period in which a lawsuit is pending, so if the relevant period is excluded, it constitutes land for business because the requirements of the land for non-business

Article 104-3 of the Income Tax Act

Article 168-14 of the Enforcement Decree of the Income Tax Act

2011Guhap4376 Revocation of Disposition of Imposing capital gains tax

XX

Permanent Residence of Head of Tax Office

May 16, 2012

June 27, 2012

1. The Defendant’s disposition of imposing capital gains tax of KRW 000 for the year 2010 against the Plaintiff on May 16, 201 is revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On December 29, 1983, the Plaintiff purchased and owned 481/2764 shares (the above land was divided into 1524 square meters prior to March 21, 2006, 1524 square meters prior to 000-22, 000-3336, 1053 square meters prior to 00-337 square meters and 187 square meters prior to 00-37, and the Plaintiff’s shares among the three divided lots of land was referred to as “the instant land”). On November 25, 2010, the Plaintiff sold at KRW 00 to the PP Development Co., Ltd. (hereinafter referred to as “P development”).

B. On January 30, 201, the Plaintiff reported the transfer income tax to the Defendant on January 30, 201, and reported and paid KRW 000 by deeming that the instant land does not constitute non-business land.

C. On May 16, 2011, the Defendant: (a) deemed that the instant land was land for non-business use; (b) thus, it cannot be subject to the special long-term holding deduction; and (c) accordingly, corrected and imposed KRW 000 of the transfer income tax for the year 2010 (hereinafter “instant disposition”).

D. The Plaintiff filed an appeal with the Tax Tribunal on May 9, 2011, but was dismissed on August 29, 2011.

[Ground of recognition] Facts without dispute, Gap evidence 1-3-1 to 10-3, Eul evidence 1-4-4, the purport of the whole pleadings

2. The plaintiff's assertion is as follows.

Each lawsuit filed against the Plaintiff prior to the transfer of the instant land by XX Development constitutes a lawsuit on the ownership under Article 83-5 (1) 7 of the former Enforcement Rule of the Income Tax Act (wholly amended by Ordinance of the Ministry of Strategy and Finance No. 195 of March 28, 2011; hereinafter referred to as the "former Enforcement Rule of the Income Tax Act") and the instant land is not a non-business land unless each lawsuit is pending. Thus, the Defendant’s failure to make the special long-term holding deduction is unlawful.

3. Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

4. Determination

A. According to Article 104-3 (1) 1 (b) of the former Income Tax Act (amended by Act No. 10408, Dec. 27, 2010; hereinafter the same referred to as the "former Income Tax Act"), land corresponding to the farmland in the urban area (excluding green belt area and development restriction zone) under the National Land Planning and Utilization Act (hereinafter referred to as the "farmland in the urban area") among the urban areas during the period prescribed by the Presidential Decree shall be the land for non-business use. The term "period prescribed by the Presidential Decree" means the period prescribed by each item of subparagraph 1 of Article 168-6 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010; hereinafter referred to as the "former Enforcement Decree of the Income Tax Act"), where the possession period of land is five years or more, the period exceeding two years immediately preceding the transfer date, ② the three years immediately preceding the three years, and ③ the period exceeding 20/10 of the ownership period.

According to Article 104-3 (2) of the former Income Tax Act, if the land falls under the non-business land due to the prohibition of use due to the provisions of law after acquiring the land or other inevitable reasons prescribed by the Presidential Decree, it may not be deemed the land for non-business use under the conditions as prescribed by the Presidential Decree. According to Article 168-14 (1) 4 of the former Enforcement Decree of the Income Tax Act and Article 83-5 (1) 7 of the former Enforcement Decree of the Income Tax Act, the land for which a lawsuit on ownership is pending after acquiring the land shall be deemed the land not falling under the farmland under Article 104-3 (1) of the former Income Tax Act while the lawsuit on ownership is pending before the court. In this context, it shall not be asked whether the land in question has been farmland under Article 104-3 (1) of the former Income Tax Act due to the lawsuit on ownership, and the purpose of legislation is that Article 104-3 (2) of the former Income Tax Act is all inevitable reasons, and the owner of the land in a lawsuit on ownership will lose its ownership for business.

(b) Fact of recognition;

(1) The Plaintiff acquired the instant land on December 29, 1983, and the instant land was incorporated into an urban area (Class II general residential area) in accordance with the National Land Planning and Utilization Act on May 19, 195.

(2) On June 17, 2008, PP development filed a lawsuit claiming sale under Article 18-2(1) of the former Housing Act (amended by Act No. 9405, Feb. 3, 2009; hereinafter referred to as the "former Housing Act") against the Plaintiff, claiming a right to demand sale under the latter part of Article 18-2(1) of the former Housing Act (hereinafter referred to as the "former Housing Act") and won a lawsuit claiming the registration of ownership transfer of the instant land from the first instance to November 12, 2008 (Seoul District Court Decision 2008Da4445, Jun. 20, 2009; Supreme Court Decision 2008Da8445, Aug. 20, 2009; Supreme Court Decision 2008Da3820, Jun. 17, 2008, the appeal court rejected the claim for sale of the instant land for more than 3 months after obtaining approval of the housing construction plan from the Defendant 208.

(3) On May 3, 2010, developing XX again filed a lawsuit claiming the registration of ownership transfer of the instant land against the Plaintiff (hereinafter referred to as “second suit”). On October 6, 2010, the first instance court rejected the Plaintiff’s claim for development on the ground that the contract on the instant land cannot be deemed to have been established on November 19, 2008 (Seoul District Court Do Branch Branch Office 20107). Accordingly, the first instance court rejected the Plaintiff’s claim for sale transfer on October 18, 2008 after purchasing the instant land from the Daegu District Court (Seoul District Court 2010Na2011) and then withdrawing the ownership transfer registration of the instant land on October 13, 2015, inasmuch as there is no assertion or proof as the development commenced prior consultation with the Plaintiff on August 18, 2008, or the project plan was approved.

(4) On October 2, 2008, during the 2008 lawsuit, development was pending with respect to the land of this case, the provisional disposition was revoked on October 21, 2010 on the ground that the provisional disposition against the land of this case was subject to a decision to prohibit sale, donation, lease on a deposit basis, mortgage, right of lease, establishment of lease, and all other disposal actions (Seoul District Court Decision 2008Kadan2268). After the purchase of the land of this case, the provisional disposition was revoked on December 21, 2010 on the ground that the provisional disposition against disposal of the land of this case was revoked.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 through 4, Gap evidence 9 through 10-3, Eul evidence 4-1 through 4, the purport of the whole pleadings

C. The filing of a lawsuit against the Plaintiff for the registration of ownership transfer with respect to the instant land constitutes “litigation against the Plaintiff” under Article 83-5(1)7 of the former Enforcement Rule of the Income Tax Act. If the Plaintiff’s ownership of the instant land continues while the instant lawsuit was in possession, the period of the lawsuit is from June 23, 2008 to April 29, 2010, which became final and conclusive in the final and conclusive judgment of the Supreme Court; ② the period from May 3, 2010 to November 25, 2010, the date of the lawsuit; and ② the period from May 3, 2010, the date of the lawsuit to November 25, 2010, the sum of the period of the lawsuit is about two years and five months, and the land in this case does not fall under the non-business land during the said period. Accordingly, if the said period is excluded from the period of the lawsuit, the land in this case’s period of no longer than the period of the immediately preceding three years from November 25, 2010.

Therefore, the land in this case is not a non-business land because the period corresponding to the non-business land under subparagraph 1 (b) of Article 168-6 of the former Enforcement Decree of the Income Tax Act is more than one year out of the three years immediately before the date of transfer. Thus, the land in this case does not fall under the non-business land. Nevertheless, the defendant's failure to obtain special deduction for long-term holding on the premise that the land in this case

5. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is decided as per Disposition by admitting it.