The meaning of "Ba site" excluded from special long-term holding deduction.

Article 23 (2) 2 of the former Income Tax Act (amended by the Presidential Decree No. 13194 of Dec. 31, 1990) stipulates that "land, the category of which is a site under the Cadastral Law and is not a building" has been amended to the term "B site" in Article 46-3 of the Enforcement Decree of the Income Tax Act. Thus, it is reasonable to interpret that the land in which a building is substantially able to be constructed is excluded from the special long-term holding deduction under Article 23 (2) 2 of the former Income Tax Act regardless of its category of land.

Article 23 (2) 2 of the former Income Tax Act; Article 46-3 of the former Enforcement Decree of Income Tax Act; Article 46-3 of the Enforcement Decree of Income Tax Act

Plaintiff Cheongsung Law Firm, Attorneys Kim Jong-sung, Counsel for plaintiff-appellant

Head of the Office of Government

Seoul High Court Decision 93Gu34901 delivered on November 16, 1994

1. The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court.

2. The plaintiff's appeal is dismissed.

3. The costs of appeal dismissed are assessed against the plaintiff.

1. We examine the Plaintiff’s attorney’s grounds of appeal.

In case where the land, etc. is transferred within the scope prescribed by the Presidential Decree for the purpose of relocating a factory operated for more than two consecutive years under Article 67-12 (1) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4451 of Dec. 27, 191), which was enforced at the time of the transfer of the land of this case, to be exempted from capital gains tax or special surtax due to the transfer of the land of this case, the transfer income tax or special surtax shall be exempted within the reporting period prescribed in Article 67-12 (4) of the same Act and Article 5-10 (3) of the Enforcement Decree of the same Act (amended by the Presidential Decree No. 13546 of Dec. 31, 191; hereinafter the same shall apply).

Therefore, the judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles, such as the theory of lawsuit.

2. We examine the grounds of appeal by the defendant litigation performer.

According to Article 23 (2) 2 of the Income Tax Act and Article 46-3 of the Enforcement Decree of the same Act, the court below held that the land of this case does not constitute a site excluded from the special long-term holding deduction, on the ground that the land category of which is a site is excluded from the special long-term holding deduction, and the issue of whether it is a site (BB site) should be determined on the basis of its unit at the time of the settlement date of the balance. The court below held that the land of this case at the time of July 30, 1991, although there was no building on the land of this case as of July 30, 1991, the land category of this case was not a

However, since Article 46-3 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13194, Dec. 31, 1990; Presidential Decree No. 46-3 of the same Act provides that "land, the category of which under the Cadastral Act is no building" excluded from the special long-term holding deduction under Article 23 (2) 2 of the Income Tax Act, it is difficult to interpret that land, the category of which is not a building (e.g., miscellaneous land) under the Cadastral Act, is substantially possible, shall not be excluded from the special long-term holding deduction even if construction is substantially possible. However, since Article 46-3 of the Enforcement Decree of the Income Tax Act, which was enforced at the time of the remaining payment date of the land in this case, which was the transfer date, was revised as above, was revised as "B site", it is reasonable to interpret that the land actually able to be constructed, regardless of its land category, is excluded from the special long-term holding deduction under Article 23

Furthermore, according to the records at the time of the transfer of the land of this case, the plaintiff asserted at the court below that the land of this case was not substantially able to be constructed at the time of the transfer, and rather, there was no building on the land of this case at the time of the transfer. Thus, the plaintiff himself can be viewed as the premise that the land of this case was actually able to be constructed since the land of this case was miscellaneous land, and according to the evidence duly adopted by the court below, the land of this case was used as the site of cement block manufacturing factory as miscellaneous land at the 4,122 square meters after the land of this case was divided and the land of this case was partially used as the site of cement block manufacturing factory. Among them, it is reasonable to view that the land of this case was all demolished or destroyed before the transfer date.

Nevertheless, the judgment of the court below, as stated in its holding, is justified in its conclusion by misunderstanding the legal principles of Article 46-3 of the Enforcement Decree of the Income Tax Act or by misunderstanding the facts about the present situation of the land at the time of the transfer date, which affected the conclusion of the judgment.

3. Therefore, the part of the judgment of the court below regarding the defendant's failure is reversed, and that part of the case is remanded to the court below. The plaintiff's appeal is dismissed, and the costs of appeal are assessed against the plaintiff who is the losing party. It is so decided as per Disposition by the assent of

Justices Jeong Jong-ho (Presiding Justice)