[1] Whether a new restriction or prohibition may be deemed to exist in a case where the designation of an apartment district was made prior to land acquisition but the validity of the designation was lost due to an application for non-application for the decision of the development master plan (negative)

[2] Whether a justifiable ground is recognized as a general exception to non-business real estate (negative)

[1] In a case where the land of a unit for which the designation of an apartment district was publicly announced is acquired, the construction of the building is permitted to the extent that it does not violate the planned development of the apartment district before the establishment of the master development plan, and its use is restricted. Even if the designation of the apartment district was invalidated by failing to file an application with the Minister of Construction and Transportation for the decision of the master development plan until two years have passed since the designation of the apartment district was publicly announced, the restriction on use following the designation of the apartment district was revoked, and it cannot be said that the new use of the land is restricted or prohibited.

[2] Article 18 (3) of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Prime Minister No. 675 of Dec. 31, 1997) lists real estate for non-business use of a juristic person individually and lists it under paragraph (4) of the same Article. Thus, if it falls under any of the subparagraphs of paragraph (3) of the same Article, the real estate shall be deemed non-business real estate unless there is a ground for exception under paragraph (4), and there is no ground to view the justifiable

[1] Article 20 (1) of the former Housing Construction Promotion Act (amended by Act No. 4530 of Dec. 8, 1992); Articles 18 and 19 of the former Urban Planning Act (amended by Act No. 4175 of Dec. 14, 1991); Article 32 (1) of the former Building Act (amended by Act No. 4381 of May 31, 1991); Article 80 of the former Enforcement Decree of the Building Act (amended by Presidential Decree No. 1365 of May 30, 1992); Article 18-3 (1) 1 of the Corporate Tax Act; Article 43-2 (1) 1 of the Enforcement Decree of the Corporate Tax Act; Article 18-1 of the former Enforcement Rule of the Corporate Tax Act (amended by Act No. 4175 of Dec. 31, 199); Article 32 (1) of the former Building Act (amended by Ordinance of the Prime Minister) [Article 1365-18 (1) of the former Enforcement Decree]

[2] Supreme Court Decision 93Nu13469 delivered on November 26, 1993 (Gong1994Sang, 222) Supreme Court Decision 97Nu1280 delivered on February 13, 1998 (Gong1998Sang, 802)

Sung Industrial Co., Ltd. (Attorneys Kim Jong-soo et al., Counsel for the defendant-appellant)

Head of Daegu Tax Office

Daegu High Court Decision 96Gu3792 delivered on January 17, 1997

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. On the first ground for appeal

Article 20 (1) of the former Housing Construction Promotion Act (amended by Act No. 4530 of Dec. 8, 1992) provides that the head of a Si/Gun shall establish a basic plan for the development of an apartment zone under the Urban Planning Act and obtain the approval thereof from the Minister of Construction and Transportation under the conditions as prescribed by the Presidential Decree. Article 18 of the former Urban Planning Act (amended by Act No. 4175 of Dec. 14, 191) provides that the Minister of Construction and Transportation may determine the designation of an apartment zone as an urban planning zone under the provisions of the Building Act, except as otherwise provided in this Act, with respect to the restriction or prohibition on construction and other acts, Article 19 provides that the designation of an apartment zone may be determined as an urban planning zone under the same Act, and the same provision does not apply to the restriction on the development of an apartment zone under the provisions of Article 32 (1) of the former Building Act (amended by Act No. 4381 of May 31, 1991).

According to the records, on June 1, 198, the plaintiff, whose business purpose is the comprehensive construction business, entered into a sales contract to purchase the land of this case for the construction of apartment, and paid the remaining price on August 4, 198. On May 2, 1987, the apartment zone designation was publicly announced on May 2, 198, and the cadastral approval was publicly announced on August 3, 198. On December 8, 1988, the Daegu City was designated as an apartment zone development master plan to provide services to the construction office for supplementation. However, on the ground that it was necessary to review the land use plan in parallel with the basic urban planning on August 30, 1990, and it was not possible for the plaintiff to use the land of this case for non-business purposes because it was not possible to review the basic urban planning on the land of this case for non-business purposes. Accordingly, it was not possible for the plaintiff to use the land of this case for non-business purposes.

The judgment of the court below to the same purport is acceptable, and the plaintiff is expected to be able to stop an apartment if the development master plan of the Daegu Market was established, and the land of this case was acquired, and even if the Daegu Market did not file an application with the Minister of Construction and Transportation for the decision of the development master plan within two years from the date of designation and public notice of the apartment zone and the designation of the apartment zone was invalidated, the restriction on use following the designation of the apartment zone was revoked, and it cannot be said that the new use of the land was restricted or prohibited. The ground of appeal on this point is without merit.

2. On the second ground for appeal

Article 18(3) of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Prime Minister No. 675 of Dec. 31, 1997) lists real estate for non-business use of a corporation individually and is listed in paragraph (4) of the same Article. Thus, if the real estate falls under any subparagraph of paragraph (3) of the same Article, unless there exists any ground for exception under paragraph (4), the real estate shall be deemed non-business real estate, and there is no ground for deeming the justifiable ground for exception (see Supreme Court Decision 93Nu13469, Nov. 26, 1993).

The judgment of the court below to the same purport is just, and there is no error of law as otherwise alleged in the ground of appeal. The judgment cited in the ground of appeal is different from this case, and thus it is not appropriate to invoke this case. The argument in the ground of appeal as to this point is without merit.

3. On the third ground for appeal

The plaintiff asserts that since the land of this case was used for business from September 1989, it does not constitute "real estate for which six months (one year where no building or facility exists) have passed after the acquisition of real estate" under Article 18 (3) 1 of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1968 of March 12, 1994).

However, this argument is a new argument in the trial, and even according to the above provision, the real estate stipulated in subparagraph 12 is excluded from the real estate stipulated in subparagraph 12. However, since the land in this case was the real estate for sale and purchase, it cannot be applied to the above subparagraph 1.

The ground of appeal on this point is without merit.

4. Conclusion

Therefore, the appeal shall be dismissed and the costs of appeal shall be assessed against the plaintiff who is the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeong Jong-ho (Presiding Justice)