In case where a compromise was reached in a lawsuit between the parties to return the real estate after the transfer of the ownership by the voluntary auction procedure, whether the transfer subject to the transfer income tax was deemed to have occurred.

According to Article 4(3) of the former Income Tax Act (amended by Act No. 3576, Dec. 21, 1982), regardless of the registration of assets subject to capital gains tax, the ownership of the assets is actually transferred at a price due to sale, exchange, investment in kind in a corporation, etc.

Article 4 (3) of the former Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982)

Supreme Court Decision 83Nu269 Decided February 28, 1984

Plaintiff

Head of Ansan Tax Office

Daegu High Court Decision 84Gu242 delivered on July 10, 1985

The judgment of the court below is reversed, and the case is remanded to Daegu High Court.

1. According to the reasoning of the judgment below, the court below held that the non-party 2 had no agreement on the non-party 3's auction proceeds for the cancellation of the above 80-party 1's auction proceeds on the ground that the non-party 2 had no agreement on the cancellation of the above 90-party 1's auction proceeds and the non-party 2's new auction proceeds on the ground that the non-party 1 had no agreement on the cancellation of the above 9-party 2's auction proceeds on the non-party 1's auction proceeds and the non-party 3's new auction proceeds on the ground that the non-party 1 had no agreement on the cancellation of the above 9-party 2's new auction proceeds on the ground that the non-party 4's new auction proceeds had no effect on the non-party 1's new auction proceeds on the ground that the non-party 1 had no effect on the non-party 2's new auction proceeds on the 9-party 1's new auction proceeds.

2. However, according to Article 4 (3) of the former Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982), which was enforced at the time of the occurrence of taxation requirement of this case, the ownership of the property is actually transferred for consideration due to sale, exchange, investment in kind in a corporation, etc., regardless of registration of the transfer column subject to capital gains tax, and in this case, if the decision of permission of auction of this case was finalized by the voluntary auction procedure applied by the above non-party and the payment of the price was made in full, then the transfer is subject to capital gains tax if the decision of permission of auction of this case becomes final and conclusive and conclusive by the auction procedure applied by the above non-party, and as long as the successful bid of this case is valid, it shall be deemed that the auction price was paid in violation of the contract obligation of the above non-party, the successful bidder, and the above non-party, who is the successful bidder, or the registration of cancellation of ownership transfer registration filed against the successful bidder.

3. Therefore, unlike the above opinion, the judgment of the court below which held that the real estate of this case cannot be deemed to have gains from transfer, which is subject to capital gains tax, even if the successful bid and the price is paid in full through the auction procedure, shall not be deemed to have been subject to capital gains tax, shall be deemed to have affected the conclusion of the judgment by misapprehending the legal principles on the effect of the successful bid in the auction at the pen, or on the transfer at the cost under Article 4 (3) of the former Income Tax Act, and the defendant's appeal disputing this point shall be reversed, and the judgment of the court below shall be remanded to the Daegu High Court

Justices Yoon Yoon-tae (Presiding Justice)