Cho-2018-China-1896 (Law No. 19, 20186)

Of the instant real property, 1/3 of the Plaintiff’s shares cannot be deemed to have been transferred.

In light of witness testimony, details of bank transactions, etc., it cannot be deemed that 1/3 of the Plaintiff’s share in the instant real estate was transferred, and thus the instant disposition is legitimate.

Article 94 of the Income Tax Act: Scope of Transfer Income

Suwon District Court 2018Gudan8/591 Revocation of Disposition of Imposing Capital Gains Tax

Ma-○

○ Head of tax office

2019.06.14

2019.07.05

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of KRW 000 (including additional tax) out of KRW 000 (including additional tax) of the transfer income tax (including additional tax) for the taxable year 2014 against the Plaintiff on October 000 shall be revoked.

1. Details of the disposition;

A. On December 19, 2006, the Plaintiff and thisCC, KimA, and KimB purchased each of the instant lands (hereinafter collectively referred to as “each of the instant lands”) with the joint contributions of the Plaintiff and thisCC, KimA, and the bank loans, from 000 to 265m2,00 m265m2 (hereinafter referred to as “the instant lands”). When entering into a joint purchase agreement with KimB to take charge of various management affairs, such as concluding a contract from the purchase to the final settlement, and managing funds, the shares of each of the instant lands purchased are 20%, KimAA 40%, and 30%, and the remaining shares are distributed to KimB, who are in charge of management affairs, and the purchaser of the sales agreement and the registration of ownership transfer are agreed in the name of the Plaintiff.

B. According to the above joint purchase agreement, the Plaintiff completed the registration of ownership transfer on each of the instant lands owned by NewDD on January 30, 2007 (the total purchase price of KRW 0 billion) on the grounds of the sale contract as of January 10, 2007, and thereafter, ○ Bank Co., Ltd., the mortgagee of each of the instant lands, applied for voluntary auction on and around October 2013. At the auction procedure on December 19, 2014, each of the instant lands was transferred to Nonparty E on the grounds of the sale by voluntary auction (the total sale price of KRW 0 billion).

C. After that, the Plaintiff did not report the transfer income tax on the transfer of each of the instant lands, and the Defendant, on September 7, 2017, determined and notified the transfer value of each of the instant lands as KRW 0 billion, and the acquisition value as KRW 000 billion, with respect to the Plaintiff as to the transfer income tax attributed to the year 2014 (including additional tax).

D. On November 10, 2017, the Plaintiff’s objection against the determination and notification of capital gains tax, and the Defendant, on December 14, 2017, recognized the Plaintiff’s share ratio of each of the instant land as 30% and corrected ex officio the said capital gains tax amount to KRW 000 (including additional tax) by reducing the said capital gains tax amount to KRW 000 (including additional tax) (hereinafter referred to as “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on March 15, 2018, but the appeal was dismissed on June 19, 2018.

[Reasons for Recognition] Unsatisfy, Gap evidence Nos. 1 through 5, 9, Eul evidence Nos. 1 and 3 (including provisional number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

The Plaintiff transferred 30% of the shares of each of the instant lands to KimB before the land was sold in the auction procedure. In other words, KimB, on April 15, 2010, by finding the Plaintiff’s husband KimF and soliciting the Plaintiff to sell 30% of the Plaintiff’s shares in KRW 150 million, and KimF, by mutual agreement, prepared a written agreement of transfer, and was transferred from KimB to KimB to KimB to KRW 0 billion on the same day. As such, at the time of sale of each of the instant lands in the auction procedure, 30% of the Plaintiff’s shares was already transferred to KimB, but the Plaintiff did not complete the registration of transfer, but the Defendant’s disposition that decided and notified the transfer income tax to the Plaintiff on the premise that KimB held 30% of the shares of each of the instant lands in the auction procedure, was unlawful against the principle of substantial taxation.

B. Determination

In light of the following circumstances, Gap evidence Nos. 2, 3, and 6-1, Gap evidence Nos. 7, Eul evidence Nos. 2, and Eul evidence Nos. 2, and Eul evidence Nos. 11, which can be acknowledged by comprehensively considering the overall purport of the pleadings in the testimony by the witness KimB, are hard to believe that the plaintiff transferred 30% of each land of this case to KimB, and the remaining evidence submitted by the plaintiff alone are insufficient to recognize the above point, and there is no other evidence to acknowledge it. Accordingly, the plaintiff's above assertion cannot be accepted.

① The KimB appeared as a witness in this Court and stated 30% of the Plaintiff’s husband and the Plaintiff’s share in each of the instant land in this case to be transferred by himself, but was not wholly assigned the Plaintiff’s share. On April 15, 2010, he testified clearly that he did not transfer the Plaintiff’s share in this case to the Plaintiff in return for transfer of the said share.

② The amount of KRW 00 million that KimB transferred to the Plaintiff on April 15, 2010 was transferred from the Plaintiff’s account in the name of KimB to another Plaintiff’s account in the name of another Plaintiff. Examining the Plaintiff’s account details (Evidence B) managed by KimB, the amount of KRW 0 billion transferred on April 15, 2010 is deemed to be part of KRW 000,000,000, which was transferred on April 15, 2010, and it does not appear to be funds owned by KimB. This is inconsistent with the Plaintiff’s assertion that the transfer of KRW 30,000,000 in each of the instant land shares to KimB and in return for the transfer of KRW 0,000,000,000 in the name of the Plaintiff.

③ The KimA brought a lawsuit against the Plaintiff on the ground that the registration of ownership transfer in the Plaintiff’s name with respect to the Plaintiff’s shares (40%) and shares (20%) corresponding to the Plaintiff’s shares (40%) in each of the instant lands and the shares (20%) acquired from thisCC was null and void due to a three-party registered title trust agreement (○○○ District Court 2013Gahap0000), and the recognition of the decision (No. 3) was made on May 2010, KimA acquired 200 won of the instant lands. The Plaintiff asserted that the Plaintiff transferred 30 billion won of the Plaintiff’s shares in each of the instant lands to KimB on April 15, 2010, compared to each of the instant land’s share transfer proceeds of KRW 200 billion and the transfer proceeds of KRW 200 million, the Plaintiff claimed that the transfer proceeds of the instant land and KRW 3000,000,000,000.

④ According to the joint purchase agreement on each of the instant lands (Evidence A No. 3), the Plaintiff’s first and actual share of each of the instant lands reaches KRW 000,000, and even thereafter, the Plaintiff continued to bear interest on bank loans of a certain amount. Nevertheless, it is difficult to understand that the Plaintiff transferred 30% of its share of KRW 150,000,000, which is not different from the initial amount of expenditure after the lapse of about three years.

⑤ The Plaintiff submitted as evidence a written agreement (Evidence A) that GimB transferred 30% of the shares in each of the instant land and 10% of the shares in the existing KimB to KimA, which is the sum of 30% of the shares in each of the instant land and 10% of the shares in the previous KimB. However, the Plaintiff testified to the effect that the said written agreement does not have the seals of KimA, which is the party to the contract, and that the said written agreement is not effective as KimB did not consent, and that the said written agreement is not sufficient to recognize that the Plaintiff transferred the shares in each of the instant land to KimB.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.