Busan District Court 201Guhap4894 (24 December 2012)

Appellate Decision 201J 1613 (Law No. 1106.30)

It is difficult to recognize land as being valuable for not less than eight years;

In light of the fact that neighboring residents have cultivated vegetables, etc. without permission after the acquisition of land, it is difficult to recognize that there have been a large number of people as self-sufficient for not less than eight years in light of the fact that it is difficult for them to grow a large area of land in person while operating their own business, it is difficult to do so, in view of the fact that there are many people to grow a large area of land in person.

2012Nu2047 Revocation of Disposition of Imposing capital gains tax, etc.

XX

Head of the tax office

Busan District Court Decision 2011Guhap4894 Decided May 24, 2012

November 30, 2012

December 14, 2012

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 disposition of imposition of capital gains tax of KRW 000 against the Plaintiff on December 1, 2010 shall be revoked.

1. Details of the disposition;

The following facts are not disputed between the parties, or acknowledged by comprehensively considering the whole purport of the pleadings in each of the evidence Nos. 3, 4-1, 2, 3, and 5-1, 2, 1-1, 2, 11-1, 12, 13, and 14.

A. On December 4, 2001, the Plaintiff purchased and owned 3,989m2 (hereinafter referred to as “instant land”) from the Japanese-gun, Busan-gun, Busan-gun. The captain of Busan-gun purchased 000m2 (hereinafter referred to as “instant land”). On March 12, 2010, the Plaintiff acquired the instant land through consultation in accordance with the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects.

B. On June 4, 2010, if the Plaintiff acquired the instant land in 000 won and directly cultivated it for not less than eight years, the Plaintiff reported the transfer income tax for 2010 that was reduced or exempted from the transfer income tax pursuant to Article 69(1) of the Restriction of Special Taxation Act on the instant land.

C. On December 1, 2010, on the ground that the acquisition value of the instant farmland was KRW 000, and that the Plaintiff did not directly cultivate the instant land for at least eight years, the Defendant imposed capital gains tax of KRW 000 on the Plaintiff for the year 2010 (hereinafter “instant disposition”). Accordingly, the Plaintiff filed an objection with the Commissioner of Busan Regional Tax Office, and the Commissioner of Busan Regional Tax Office rendered a decision to correct the acquisition value of the instant land as KRW 000 on January 26, 201. The Defendant, upon the said decision, notified the Plaintiff of the reduction of KRW 00 among the capital gains tax by correcting the said amount.

D. The Plaintiff appealed and filed an administrative appeal with the Tax Tribunal, but the Tax Tribunal dismissed the Plaintiff’s claim on June 30, 201.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff resided in the location of the instant land, which is farmland, and cultivated the said farmland directly for not less than eight years. Therefore, the instant disposition against which the Defendant imposed capital gains tax without applying the reduction or exemption provision of capital gains tax under the Restriction of Special Taxation Act, should be revoked as it is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) According to Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 10406, Dec. 27, 2010) and Article 66(1) and (2) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 22583, Dec. 30, 2010), where the transferor resides in a Si/Gun/Gu where farmland is located for not less than eight years, an adjacent Si/Gun/Gu area within a Si/Gun/Gu, or an area within a 20-hour radius from the said farmland, and engages in cultivating crops or perennial plants for not less than eight years, or cultivated or cultivated with his/her own labor, the transfer income tax shall be reduced or exempted. The Plaintiff’s assertion to the purport that this part of the transfer income tax applied to the land for non-business purpose should be proved by the Plaintiff’s assertion that the transfer income tax applied to this case’s transfer income tax (see, e.g., Supreme Court Decision 2003Nu193.

2) In light of the following circumstances, Gap evidence 7, Eul evidence 2, Eul evidence 3, Eul evidence 4-1 through 6, Eul evidence 6, Eul evidence 8-1 through 11, Eul evidence 9-1, 2, 3, Eul evidence 10, Eul evidence 10, and Gap evidence 7, evidence 8, 9, 10 evidence 1, 2, 16-2, Eul evidence 17-1, 2, 7-1 through 11, Eul evidence 7-2, Eul evidence 1 through 11, Eul evidence 9-1, 2, 3, 14-1, 12, 3, 15-1, 12, 3, 15-1, 3, 15-1, 3, 15-1, 3, 15-1, 14, 3, 15-1, 1, 15-1, 2, 15-1, 3, 14, and 5-1.

① According to the confirmation document drawn up by the Plaintiff himself on August 24, 2010, the Plaintiff acquired the instant land, and thereafter cultivated the drilling with the garden (record 71 pages).

② According to the literature and answer written against the Plaintiff on August 27, 2010, the Plaintiff was planned to grow seedlings after the acquisition of the instant land, but the Plaintiff was anticipated to grow seedlings, but it was declared that neighboring residents had cultivated the vegetables, etc. from their own land to the garden as they had been in the first place, with the fear that the gap with the Neine residents would become frightencing (record 78 pages).

③ According to the survey on the current status of obstacles to the land of this case prepared by the plane captain’s office, the land of this case is divided into EE and 7 persons, respectively, and cultivated vegetables, etc. (record 22 pages).

④ On June 9, 2010, the Plaintiff and the above EE et al. jointly cultivated the instant land by the Plaintiff and the EE et al., the Plaintiff filed a written objection to the investigation on the current status of the captain’s office. However, the Plaintiff and the above E et al. withdrawn the objection on June 14, 2010 and on June 15, 201 (Records No. 102 pages).

⑤ Examining the photographs of the instant land taken on May 25, 2010, the relevant arable area is divided into several parts. This conforms to the outcome of the investigation into the current status of obstacles to the Korea Coast Guard, where a large number of persons, other than one individual, cultivated the instant land.

④ From 1998 to 2010, the Plaintiff operated an outdoor theater with the trade name of ' XX' from 000 to 2010. As such, it appears that it is not easy to cultivate the instant land alone, where the area of the instant land falls short of 3,989 square meters while operating one’s own business.

3) Therefore, we cannot accept the Plaintiff’s assertion that the Plaintiff directly cultivated crops on the instant land for not less than eight years.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance shall be just, and the plaintiff's appeal shall be dismissed as it is without merit.