Seoul Administrative Court 2009Guhap21116 ( October 13, 2010)

Review Transfer 2008-0233 (O. 10, 2009)

The person to whom the capital gains accrue if shares are transferred as part of the exercise of a claim;

When the shares established by the pledge are transferred as part of the exercise of the claim, it is alleged that there is no capital gains from the donation to the related corporation before the transfer, but according to relevant evidence, the owner of the shares

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 each disposition of imposition of capital gains tax of KRW 271,643,343 and securities transaction tax of KRW 13,659,420 for the plaintiff on July 12, 2008.

1. Details of the disposition;

The following facts may be acknowledged either in dispute between the parties or in accordance with Gap evidence Nos. 1, 2, 3-1, 2, 1-1, 2, 2, 2, 4, 8, and 1-1, 2, 2, 4, and 8.

A. On March 13, 1987, the Plaintiff was holding 3,294 shares of the FF City Tourism Co., Ltd. (hereinafter “FF Tourism”) (hereinafter “instant shares”) by acquiring shares from the largestB, and the Plaintiff borrowed KRW 5 billion from the CC Comprehensive Financial Co., Ltd. (hereinafter “CC”) a large shareholder and a representative of the Plaintiff borrowed 3,294 shares from the CC Comprehensive Financial Co., Ltd. (hereinafter “AA hotel”), the Plaintiff entered into a joint and several guarantee agreement with the CC on the said borrowed shares, prepared a pledge agreement with the CC on March 31, 199, and provided a letter of consent to dispose of the instant shares (the FF Tourism also registered as the pledgee of the instant shares).

B. After December 29, 2003, as AA hotel was unable to repay the above borrowed money,CCF entered into a contract to transfer the instant shares to DaDD with a view to KRW 2.5 billion, and appropriated the transfer money for the payment of some of the above borrowed money after receiving on March 31, 2004, and FF tourism changed the nominal owner of the instant shares from the Plaintiff to DoD on April 12, 2004.

C. As a result of the investigation by the Director of the Central Regional Tax Office of China on the change of stocks against FF tourism, FF Tourism notified the Defendant of taxation data that FFD should impose capital gains tax and securities transaction tax not reported and paid by the Plaintiff on deeming that FFD’s transfer of the instant stocks from the Plaintiff to FD constitutes transfer of the said stocks to FD.

D. Accordingly, on July 12, 2008, the Defendant imposed and notified the Plaintiff of KRW 298,104,383, and securities transaction tax 13,659,420, respectively, on the ground that the Plaintiff transferred the instant shares to ChoD, but did not report and pay the transfer income tax and securities transaction tax accordingly.

E. On October 10, 2008, the Plaintiff appealed against the instant disposition and filed a request for review with the Commissioner of the National Tax Service on October 10, 2008, and the Commissioner of the National Tax Service, on March 10, 2009, rejected the Plaintiff’s claim that the Plaintiff was not the owner of the instant shares at the time when the instant shares were transferred to ChoD, and made a decision to rectify the tax base and tax amount by making the acquisition value of the instant shares KRW 400 million to KRW 584 million.

F. In accordance with the purport of the above decision, the Defendant reduced or corrected capital gains tax of KRW 298,104,383 to KRW 271,643,343 (hereinafter the above imposition disposition of securities transaction tax and imposition disposition of capital gains tax remaining after reduction as above) to KRW 271,643,343 according to the purport of the above decision.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff: (a) around April 2001, the Plaintiff and the New HH’s representative director of the AA hotel entered into an agreement with the Plaintiff to donate the instant shares to the AA hotel; (b) around March 2001, the representative director of the AA hotel retired from office after the closure of the AA hotel and delegated the Plaintiff with all rights to manage and dispose of the instant shares; (c) on November 2002, the Plaintiff entered into a donation agreement with the donor to the status of the agent of the AA hotel, a donee, to donate the instant shares to the AA hotel; and (d) on January 30, 204, the Plaintiff entered into a donation agreement with the donor to verify the contents that the instant shares were donated to the CC, a donee, at the same time, to the status of the agent of the AA hotel, to transfer the instant shares, and thus, the Plaintiff’s ownership was later made in the future from the Plaintiff to the AA hotel to the Plaintiff, which was in the name of the Plaintiff, to transfer the instant shares to the ICC’s shares.

B. Relevant statutes

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

C. Determination

(1) As seen earlier, the Plaintiff’s entry in the register of shareholders was completed on April 12, 2004 with respect to the instant shares. Thus, if it is found that the Plaintiff transferred the instant shares to Dadddddddddd on April 12, 2004, the Plaintiff is presumed to have a taxation requirement for the instant disposition. In general, in a lawsuit seeking revocation of tax imposition, if it is proved that the facts alleged in light of the empirical rule in light of the specific litigation process, the other party cannot be readily deemed to have been an illegal disposition that failed to meet the taxation requirement unless it proves that the pertinent facts were not eligible for the application of the empirical rule (see, e.g., Supreme Court Decision 97Nu13894, Jul. 10, 1998). In light of the legal doctrine, the Plaintiff is responsible to prove that the said shares were already donated to AA hotel before it was transferred to Doddddd on April 12, 2004.

(2) The Plaintiff asserts that the Plaintiff had already donated the instant shares to AA hotel before the instant shares were transferred to DaD, and that the said owner was a AA hotel at the time when the instant shares were transferred to DoD. However, in light of the following circumstances, the Plaintiff’s assertion is insufficient to acknowledge the Plaintiff’s assertion on the following grounds: (a) the entries of No. 5, No. 7, and the testimony of Hah’s witness and the testimony of Hah’s witness are not trusted; and (b) the entries of No. 2, No. 3-1, No. 3-2, and No. 4 are not sufficient to prove the Plaintiff’s assertion; and (c) there is no other evidence to acknowledge it.

(A) The time when AA hotel received the instant shares from the Plaintiff (as of April 2001 and around November 2002, the time when the said hotel was already closed, and the fact of donation of the said shares claimed by the Plaintiff is not supported by objective evidence, such as the gift contract and the details of the report on gift tax, etc. In light of the circumstances, the agreement was concluded between the Plaintiff and the Plaintiff and the Plaintiff’s representative director of the AA hotel to donate the instant shares to AA hotel on April 2001, or upon delegation of all the authority to manage and dispose of the instant shares upon the Plaintiff’s retirement, it is difficult to believe that the Plaintiff entered into a donation contract with the Plaintiff as the agent of AA hotel, a donee, to the effect that the Plaintiff would donate the instant shares to AA hotel on November 2002, as well as on November 2002.

(B) The evidence No. 7 (Gift) is a document to the effect that the Plaintiff entered into a contract on the instant shares with AA hotel on January 30, 2004, or that the said contract was entered into on January 2004 after the date on whichCCF entered into a contract on the transfer of the instant shares with AD on December 29, 2003 according to the exercise of a security right, so long as the evidence No. 7 cannot be ruled out that the evidence No. 7 was prepared for the purpose of evading capital gains tax, it is difficult to believe it.

(C) The statement No. 4 (Statement) stated that "the plaintiff requested KimG, an executive officer in charge ofCC financing, to consent to the sale of the shares ofCC financing, to give a gift of the shares of this case to AAA hotel" is nothing more than the purport that "CC did not accept the plaintiff's above request to avoid capital gains tax." Thus, it is insufficient to acknowledge that the plaintiff's assertion that the shares of this case were transferred to AA hotel around November 2002, before the transfer to AAD, was insufficient, and there is no other evidence to acknowledge otherwise. Rather, according to the above statement, according to the above statement, the plaintiff was the owner of the shares of this case at the time of the above request, and the plaintiff's donation of the shares of this case to AA hotel was not made after the plaintiff's refusal to give consent to the donation of the shares of this case to AA hotel (the plaintiff merely notified the plaintiff that the donation of the shares of this case to AA hotel was not yet made).

(D) On April 7, 2004, after the transfer of the instant shares, the Plaintiff sent a notice to the FF Tourism stating that “The instant shares in the name of the Plaintiff were provided as a collateral and, even if the Plaintiff did not consent to the transfer of the said shares,CCF transferred it to a third party, and thus, it would cause the third party to withhold the transfer of shares for two weeks until the original agreement is reached between the third party and the Plaintiff.”

(E) The Plaintiff asserted thatCCF disposed of the instant shares offered as security without its consent at a low price, thereby causing enormous damages to it, and filed a lawsuit for compensation for damages therefrom (the Plaintiff asserted that the said lawsuit was seeking compensation for damages sinceCCF incurred a large amount of damages to the remaining joint and several liability by disposing of the instant shares at low price. However, according to the statement in the evidence No. 6, the Plaintiff asserted that according to the above lawsuit, the Plaintiff sought compensation for damages incurred by disposing of the instant shares at salt on the premise that the instant shares are owned by it under the premise that the instant shares are owned by it).

D. Sub-committee

Ultimately, the Defendant’s disposition based on the premise that the owner of the instant shares is the Plaintiff is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.