Revocation of disposition imposing capital gains tax

If the transferor of land receives the price of transfer from the landowner even though the owner of the farm house, etc. and the owner of the land are different in appearance from the owner of the land when transferring the land and the building attached to the farm house, etc. on the land, the transaction shall not be a separate transaction.

Article 88 of the Income Tax Act

Chuncheon District Court-2014-Gu Partnership-410 ( November 07, 2014)

United StatesAA

Chuncheon Director of the Tax Office

September 23, 2014

November 7, 2014

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax OOOO on May 29, 2013 by the Plaintiff is revoked.

1. Details of the disposition;

A. On October 19, 2007, the Plaintiff sold 00m278m2, 640-2, 345m2, 640-3m2, 640-4 m2, 640-4, 724m2 (hereinafter “the instant one parcel of land”) to HaB, and the Plaintiff sold 640-1m2, 354m2, 354m2 (hereinafter “the instant 2m2”). On December 31, 2007, the Plaintiff filed a transfer income tax report with OOO, and paid OOO on December 31, 207, by using the transfer value of the instant parcel of land as OO, as OOO and the transfer value of the instant parcel of land as OO.

B. On May 29, 2013, the Defendant deemed the actual transfer value of the instant land as an OOO, and notified the Plaintiff on May 29, 2013 of the rectification and notification of the KRW OO(s) that deducts the already paid OO(s) from the total sum of KRW OO(s) and additional tax for failure to file a report (hereinafter “instant disposition”).

Facts that there is no dispute over recognition, Gap's 2 through 4, Eul's 1 (including Serial number; hereinafter the same shall apply), and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff concluded a sales contract on the instant land 1 with JungB, set the land purchase price as OOO, and sold the house and warehouse owned by DoD owned by the Plaintiff on the instant land 2 (hereinafter “the instant farm house and warehouse”) together with the land, but determined the purchase price and transfer cost of the farm house and warehouse as OOO. Therefore, the instant disposition that deemed the transfer value as OOOO, even though the transfer value of the instant land 1 is an OOO, should be revoked.

B. Determination

According to the statement in Gap evidence No. 1, it is recognized that "the special terms and conditions of the sales contract for the land of this case shall be the purchase price for the land of this case and the OOOO shall be the purchase price for the land of this case."

However, comprehensively taking account of the following facts and circumstances acknowledged by adding the overall purport of pleadings to the statements and videos set forth in the evidence Nos. 5, 6, 8, 9, and 2 through 7, the house and warehouse of this case cannot be deemed to have been separate from the land of this case and they cannot be deemed to have been subject to independent transactions. Moreover, it is reasonable to view the sales price of this case as the sales price of this case in full as the sales price of this case.

Therefore, the instant disposition that the Defendant assumes that all of the OOO members was income from the transfer of the land of this case is lawful.

1) The Plaintiff asserted that DoD sold the instant farm house and warehouse to OOE, but the seller’s column in the sales contract for the instant land was written only the Plaintiff’s name and the sales price OOE was transferred to OOE’s own agricultural account.

2) The Plaintiff asserts that part of the OOOO members, the father of which received in return for the transfer of the instant farm house and warehouse, were used as the cost of living, hospital expenses, and cash of DoD while managing them, and that the remainder OOO members deposited DoE in the regular deposit passbook opened jointly with DoD and managed DoD along with DoD. However, the said time deposit deposit amount of OOO members claimed by the Plaintiff was opened on November 22, 2012, and was affixed on the re-issuance of the passbook on August 19, 2013, and was affixed with DoD’s seal. There is no evidence to deem that E opened a time deposit jointly with DoD, or that OO members, the proceeds of the transfer of the instant farm house and warehouse, were actually reverted to DoD.

3) The house and warehouse of the instant case were constructed on the land of the instant case 2. Around 1945, FF, the Plaintiff’s assistance team, acquired it on or around June 8, 2006, and thereafter, DD, the Plaintiff’s assistance team, acquired it on or around inheritance. As of January 1, 2008, the standard market price of the instant house and warehouse was less than OOO members including the site. The said house and warehouse was 60 years after the construction of the instant house and warehouse around 207, which was the date of the sales contract, around 2007, since it was difficult to see that the said house and warehouse were actually used, it is difficult to view that the instant house and warehouse were almost of property value at the time of the conclusion of the instant sales contract, taking account of the fact that the instant house and warehouse were purchased for the purpose of constructing golf courses on the land of the instant case 1,22.

4) Furthermore, the special terms and conditions of the contract for the purchase and sale of the instant land No. 1 are written as OOO for the instant farm house, warehouse, and moving expenses, but DOO also resides in OO-gun No. 499 around March 1989, and moved to OO-type around October 13, 1990, which was before the contract for the sale and sale of the instant land, after the relocation of the instant land, around May 22, 2007. Thus, DOO-type could not incur relocation expenses.

5) Meanwhile, if the purchase price of the instant one’s land as alleged by the Plaintiff is OOO won, it is merely 50% of the KRW 1 kilometer per 1 kilogram200,000,000,000,000,000 for the purchase price of neighboring land, at the time of the conclusion of the said contract. In this regard, it is difficult to believe that the said purchase price of the instant one’s land is OO won.

3. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.