Early High Court Decision 2007J0106 (No. 11, 2008)

Requirements for self-defense to be exempted from farmland as substitute land or to be reduced or exempted on a eight-year basis;

The term "self-defense" includes not only the case of cultivation by himself but also the case of cultivation by employing another person under his responsibility and calculation, but also the case of cultivation by commissioned management, surrogate cultivation, lease by proxy, loan for use, etc. but also does not include the case of cultivation by another person of land, and the fact of self-defense is that the claimant proves that

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of capital gains tax of KRW 209,402,190 for the Plaintiff on October 2, 2006 shall be revoked.

1. Circumstances of the disposition;

A. On August 7, 1995, the Plaintiff acquired and owned 2,853 square meters (hereinafter “the instant farmland”) prior to 19-1, Dong Dong-dong 19-1, Dong-dong 1995. On May 6, 2005, the Plaintiff purchased 165-2, Ma○-2, Ma-ri, Dong-gun, Dong-gun, Dong-gun, Dong-gun, Dong-dong 3,061 square meters, and transferred the instant land to another person on September 20, 2005, as non-taxable income by filing a report on income from the transfer of the instant land as a substitute for farmland.

C. Accordingly, on October 2, 2006, the Defendant deemed that the Plaintiff did not directly cultivate the instant land, and rendered the instant disposition imposing KRW 209.402,190 on the Plaintiff, which reverted to the year 2005.

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on July 11, 2008.

[Ground of recognition] Gap evidence 2, 4, 5, Gap evidence 3-1 to 3, Eul evidence 5-1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff, on May 11, 1983, had moved to Sicheon-dong, and continued to reside in Gucheon-dong, and had been in possession of the instant farmland for more than 10 years until the next transfer of the farmland. As such, the transfer of the instant farmland satisfies not only the non-taxation requirement under Article 89 subparag. 4 of the Income Tax Act, but also the requirements for reduction or exemption of capital gains tax on self-Cultivating farmland under Article 69 of the Restriction of Special Taxation Act.

(b) Related statutes;

It shall be as shown in the attached Form.

C. Determination

(1) According to the provisions of the relevant laws and regulations, in order to be exempted from income tax on a substitute land for farmland or to be exempted from income tax on a transfer by a person for a period of eight years, the former land should be cultivated at the seat of the previous farmland for three or eight or more years and the former land should be cultivated. In this context, not only the case where one cultivates himself/herself, but also the case where one cultivates another by employing another person under his/her responsibility and account, but also the case where another person cultivates the land by means of commission management, surrogate cultivation, lease or loan for use, etc., it shall not be included in

(2) With respect to whether the Plaintiff cultivated the land of this case under his responsibility and calculation, the Plaintiff testified with Gap 10, 11, 26, 28, and 49 (including various numbers) as evidence corresponding thereto; according to Gap 7-1, Gap 9-1, and Eul 9-2, the Plaintiff’s own land in the farmland ledger is deemed to be the Plaintiff’s own land. It is difficult to view the Plaintiff’s own land to have joined as its members on February 24, 1996, each of the following facts and circumstances, which are acknowledged to have been based on the overall purport of oral arguments as to the fact-finding of Eul 2 through 6 (including each number), and it is difficult to view the Plaintiff’s own land as being transferred from 1988 to 17,415,000 to 200,000,000,000 won, since it was hard to view that the above 3-year agricultural products had been purchased from 30,000,00 won or more.

3. Conclusion

Therefore, the income accrued from the transfer of the land of this case is not subject to non-taxation or reduction of capital gains tax, and the plaintiff's claim seeking revocation of the disposition of this case is dismissed as it is without merit. It is so decided as per