Jeju District Court 2010Guhap669 ( October 20, 2011)

Cho High Court Decision 2010Du0607 (No. 21, 2010)

If the conversion price is applied because the actual transaction price cannot be confirmed, it is legitimate.

In addition, there is a case where it is impossible to confirm the actual transaction price due to the failure to submit objective documents on acquisition price even at the time of filing a transfer income tax return or a request for tax trial, and thus, the application of the conversion price is lawful.

Article 97 (Calculation of Necessary Expenses for Transfer Income)

(Disposition)Revocation of disposition to impose capital gains tax, 2011Nu114

KimA

Head of Jeju Tax Office

Jeju District Court Decision 2010Guhap669 Decided April 20, 201

January 18, 2012

February 8, 2012

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by each party.

1. Purport of claim

Defendant’s transfer income tax for the Plaintiff on December 1, 2009 KRW 4,967,197 (the Defendant is the Defendant) for the transfer income tax for the year 2007.

In the appellate court, the corrective disposition of reducing capital gains tax from 24,294,460 won to 4,967,197 won has been revoked, and the corrective disposition of reducing capital gains tax is partially revoked, so the subject of the original disposition is limited to 4,967,197 won remaining due to the reduction of the judgment, and the imposition of capital gains tax from 2,079,190 won has been revoked.

2. Purport of appeal

The part of the judgment of the court of first instance against the plaintiff seeking revocation below shall be revoked. The defendant's disposition of imposition of capital gains tax of KRW 4,967,197 against the plaintiff on December 1, 2009 shall be revoked.

1. Details of the disposition;

A. In Jeju-si, an OOO 00-00 large scale of 693 square meters (hereinafter referred to as “instant land”) was originally owned by Gangwon-do in the name of dM. However, Gangwon-do obtained a building permit on September 15, 2001 in order to construct a new house with two floors of reinforced concrete structure and sloping roof (hereinafter referred to as “instant building”) on the instant land, and transferred the said land to the Plaintiff after starting construction work on November 19, 201 after paying farmland preservation charges and exclusive use charges on October 4, 2001.

B. On March 8, 2002, the Plaintiff acquired the instant land and the instant building under construction on the ground thereof, and completed the construction of the instant building on September 27, 2002. On September 27, 2002, the Plaintiff changed the land category of the instant land from the former to the site, and transferred all the instant land and the instant building to KimE, ParkF, Park G, and Park HH on September 4, 2007 after changing the land category of the instant building from the former to the site.

C. On June 1, 2008, the Plaintiff filed a final return on the tax base of capital gains tax with the transfer value of KRW 300,00,000, acquisition value of KRW 381,453,216, and transfer loss of KRW 83,64,605. On October 7, 2009, the Plaintiff filed a revised return on the tax base of capital gains tax with the transfer value of KRW 300,000,000, acquisition value of KRW 280,000,000, and gains from transfer of KRW 20,000,000.

D. As of December 1, 2009, the Defendant deemed that the real transaction price of the instant land and building could not be confirmed at the time of the acquisition thereof, and corrected the disposition of this case by applying Article 114(7) of the Income Tax Act (amended by Act No. 9897, Dec. 31, 2009; hereinafter the same shall apply) and Article 176-2(2)2 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21881, Dec. 14, 2009; hereinafter the same shall apply) by applying the officially announced land price of this case as of January 1, 2001 as of June 30, 201, the converted price of acquisition of the instant land was calculated as KRW 46,500,000,000,000,000,000 won for the acquisition price of the instant land as of December 24, 2007;

E. The Plaintiff dissatisfied with the instant disposition and filed a tax appeal on February 16, 2010, but on April 4, 2010.

21. The claim was dismissed.

F. Meanwhile, the Defendant accepted the Plaintiff’s assertion that the standard for calculating the acquisition value among the dispositions in this case was unlawful on November 201, and recognized that the land in this case constituted “land without any individual land price” under the proviso of Article 99(1)1(a) of the Income Tax Act, and made a disposition to reduce the acquisition value of the land in this case by 229,483,820 won by applying the officially announced land price of this case as of January 1, 2002 as of January 1, 2002, pursuant to Article 164(1) of the Enforcement Decree of the Income Tax Act and Article 12-2 of the Enforcement Decree of the Public Notice of Values and Appraisal of Lands, etc. of Lands, which is calculated as 116,00 square meters of the officially announced land price of this case as of June 30, 202.

[Reasons for Recognition] Facts without dispute, entry of Gap evidence 1 to 12 (including additional numbers), entry of Eul evidence Nos. 1 to 13 (including additional numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff and the Plaintiff’s spouse concluded a sales contract on June 1, 2001 with Doddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

Articles 96(1), 97(1)1(a) and (b), and 114(7) of the Income Tax Act provide that when the actual transaction value is not acknowledged or confirmed because the actual transaction value is verified only when the actual transaction value of the real estate is verified, the administrative agency shall not make the actual transaction value reported by the taxpayer, but shall determine the acquisition value by applying the method of the estimation investigation, appraisal value, and conversion value at the time of acquisition. Therefore, as reported by the Plaintiff, it is difficult to view that the acquisition value of the land and buildings in this case is 280,000,000 won or more without submitting objective documents, such as the contract, receipts, and financial materials, which can prove the actual transaction value as above in the lawsuit in this case, and thus, if the actual transaction value is not acknowledged or confirmed because the actual transaction value, such as the taxpayer’s books, etc. on the acquisition value is not recognized or confirmed, it is difficult to view that the real transaction value of the land and building in this case, which the Plaintiff submitted, as evidence document and evidence.

3. Conclusion

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