Cho High-2013-Seoul Government-4278 ( April 25, 2014)

The average value of the retroactive appraised value at the time of the merger shall not be recognized, but the appraisal of assets shall be made in consideration of the unpaid corporate tax.

In this case, the market price cannot be calculated based on the average price of the existing evaluation and retroactive evaluation method, and it is inappropriate to calculate the value of assets to reduce the net asset value due to the failure to reflect the unpaid corporate tax. The assertion of self-donation profits is without merit.

Article 88 of the Corporate Tax Act: Donations pursuant to a merger under Article 38 of the Inheritance and Gift Tax Act

Seoul Administrative Court-2014-Gu Partnership-6364 ( November 18, 2016)

Note******* Other two persons

o One other than the Director of the District Tax Office

2016.23.9

November 18, 2016

1. On July 1, 2013, the part that exceeds KRW 866,280,60, and602 of the disposition of imposition of corporate tax for the business year 2010, the part that exceeds KRW 50,345,572 of the disposition of imposition of corporate tax for the business year 1,293,912,990, and the part that exceeds KRW 50,345,572 of the disposition of imposition of corporate tax for the business year 2010, and the part that exceeds KRW 2,703,910,760 of the disposition of imposition of gift tax for the business year 147,828,310, and the part that exceeds KRW 2,471,05,721 of the disposition of imposition of corporate tax for the business year 2010, and the part that exceeds KRW 116,149,530 of the disposition of imposition of gift tax for the business year 2010 shall be revoked.

2. The remainder of the claim against the defendant CJ director by the plaintiff SK Co., Ltd., and the remainder of the claim against the defendant GD director by the plaintiff ChoW and Kim WD is dismissed.

3. Of the costs of lawsuit between the Plaintiff SK and the Defendant CJ Head, 70% of the costs of lawsuit between the Plaintiff SK and the Defendant CJ Head shall be borne by the Plaintiff CJ Head, and the remainder 30% of the costs of lawsuit between the Plaintiff CJ Head, and 90% of the costs of lawsuit between the Plaintiff CJ Head and the Defendant CD Head, shall be borne by the Plaintiff CJ Head, and the remainder 10% of the costs of lawsuit by

Cheong-gu Office

On July 1, 2013, the head of the Defendant CJ Tax Office imposed corporate tax of KRW 1,293,912,90 for the business year 2010 on the Plaintiff SK, the full amount exceeding KRW 8,965,686 out of corporate tax of KRW 89,523,280 for the business year 2011, the full amount of corporate tax of KRW 147,828,310 for the business year 2010 for the corporation, and the respective imposition disposition of KRW 2,703,910,760 for the gift tax of KRW 2,703,910,760 and KRW 116,149,530 on the Plaintiff KimW on July 5, 2013.

1. Details of the disposition;

A. The merger of this case

비상장법인인 원고 주식회사 SK(이하 '원고 SK'이라 한다)은 2010. 4. 27. 비상장법인인 주식회사 에ST(이하 '에ST'이라 한다)을 흡수합병(이하 '이 사건 합병'이라 한다)하였다. 원고 SK과 에ST은 이 사건 합병을 앞두고 SY회계법인에 의뢰하여 원고 SK의 1주당 가액을 196,201원(주당 순자산가치 116,598원과 주당 순손익가치 249,270원을 2:3의 비율로 가중 평균한 금액), 에ST의 1주당 가액을 48,646원(주당순자산가치 81,078원과 주당 순손익가치 0원을 부동산과다보유법인이므로 3:2의 비율로 가중 평균한 금액)으로 평가한 주식가치산정 보고서를 받아, 이 사건 합병의 합병비율을 '원고 SK 주식 1주당 에ST 주식 0.2479주(≒ 48,646 ÷ 196,201)'로 정하였다.

At this time, the plaintiff SK and EST obtained real estate appraisal only from the NR appraisal corporation and calculated the net asset value based on this.

B. Relationship between shareholders and shareholders before and after the merger

The shareholders composition of Plaintiff SK and ETS before and after the instant merger are as listed below.

(Omission of List)

Plaintiff ChoW is the arche of ChoW, and Plaintiff Kim WD is the JK’s wife. Plaintiff SK was allocated 51,050 shares of the merged shares to the shares before the merger held by itself and ETS (=41,134 shares + 9,916 shares) and held as its own shares.

C. Correction of Plaintiff SK’s income amount in the business year 2009 and corporate tax reduction and correction

On December 9, 2011, Plaintiff SK filed a claim for correction on the amount of income in the business year of 2009, which was less than the amount calculated at the time when the initial corporate tax was returned. The tax authority accepted the claim and the tax authority accepted Plaintiff SK’s income in the business year of 2009 from KRW 12,980,005,043 to KRW 6,916,875,420 from KRW 6,923 to KRW 6,916,875,420 from KRW 2,822,125,385 to reduce corporate tax by KRW 1,30,412,793 from KRW 1,521,712,592.

(d) Integrated investigation of corporate tax by the director of a regional tax office;

The director of the regional tax office of theO shall conduct an integrated investigation into the corporate tax and stock change with the Plaintiff SK from April 4, 2013 to May 18, 2013, and (1) shall reflect the amount of income and corporate tax reduced for the business year 2009, as described in the foregoing paragraph (c) in the calculation of the net value of the Plaintiff SK’s profits and losses and net asset value. (2) In lieu of the assessment of the real estate of the Plaintiff SK and EST conducted without being appraised by at least two appraisal institutions, the assessment of the real estate should be based on the value of the real estate calculated in accordance with the supplementary assessment method under Article 61 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 11130, Dec. 31, 2011; hereinafter referred to as the “Inheritance Tax and Gift Tax Act”) and thus, the net asset value of the Plaintiff SK should be calculated based on the net asset value of the shares of the Plaintiff 145,069, and 105,78.

In addition, on the ground that the merger of this case constitutes unfair ratio, the director of the regional tax office of the Korea Intellectual Property Office notifies the director of the Korea Tax Office of 3,356,50,932 shares of the Plaintiff and the 40,000 shares of the Plaintiff’s own shares owned by SH prior to the merger of this case to notify the Plaintiff of the details of the gift tax and the 40,000 shares of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter “Corporate Tax Act”); Article 52 of the former Corporate Tax Act; Article 88(1)8(a) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22184, Jun. 8, 2010; hereinafter “Enforcement Decree of the Corporate Tax Act”); Article 88(1)8(a) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22184, Feb. 9, 20107).

E. Taxation

1) On July 1, 2013, the head of the Defendant CJ Tax Office imposed corporate tax of KRW 1,293,912,90 for the business year 2010 of the Plaintiff SK and KRW 147,828,310 for the business year 2010 of the ETS (including additional tax), and on the same day, imposed corporate tax of KRW 89,523,280 for the business year 201 on the Plaintiff SK (including additional tax) (hereinafter referred to as “instant disposition imposing corporate tax”).

2) On July 5, 2013, the head of the Defendant GD Tax Office imposed gift tax of KRW 2,703,910,760 on Plaintiff ChoW, and KRW 116,149,530 (including penalty tax) on Plaintiff Kim WD (hereinafter “instant disposition imposing gift tax”), and the foregoing “instant disposition imposing corporate tax” and “the disposition imposing corporate tax” combined with the instant disposition imposing corporate tax for the business year 201.

(f) Procedures of the previous trial;

Plaintiff SK filed a tax appeal with the Tax Tribunal on September 26, 201, which was dissatisfied with the instant disposition of imposition of corporate tax and the instant disposition of imposition of corporate tax for the business year of 2011, but received a decision of dismissal on September 17, 2014. Plaintiff SW and Kim WD also appealed against the instant disposition of imposition of gift tax, and filed a tax appeal with the Tax Tribunal on September 27, 2013, but was dismissed on April 25, 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 9, Eul evidence Nos. 1, 2, 4 through 6 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the imposition of corporate tax in this case and the imposition of gift tax in this case are legitimate

A. The plaintiffs' assertion

1) Claim on the appraisal of the value per share with the Plaintiff SK and EST

A) The part on the appraisal of real estate owned by the Plaintiff SK and ETS

Article 49(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 22579, Dec. 30, 2010; hereinafter referred to as the “Enforcement Decree of the Inheritance Tax and Gift Tax Act”) provides an example of “market price under Article 60(2) of the Inheritance Tax and Gift Tax Act.” Thus, the value appraised by more than two appraisal corporations within three months before or after the base date of appraisal cannot be deemed to be the market price, and even if the value appraised by one appraisal corporation was assessed retroactively after three months after the base date of appraisal or appraisal, it may be recognized as the market price. Therefore, it should be recognized as the market price of the Plaintiff’s land and building owned by the Plaintiff SK and the NR appraisal Corporation (hereinafter referred to as “NR appraisal value”) or the net asset value of the same real estate held on or after March 24, 2010 before the merger of the instant case.

B) The portion on the balance of the unpaid corporate tax account of Plaintiff SK

As the Plaintiff’s decision was made to reduce corporate tax of KRW 2,822,125,385 for the business year 2009, which was initially reported and paid, the net asset value for the assessment of the value per share of the Plaintiff’s 1 share should reflect the impact of the corporate tax reduction correction on the unpaid corporate tax account, which is the debt item on the balance sheet. In such a case, the remaining balance of the unpaid corporate tax account is KRW 867,682,126, but the Defendants determined that the remaining balance of the unpaid corporate tax account was KRW 996,759,537, and that the net asset value of the Plaintiff’s KS was assessed and the net asset value per share was also insufficiently assessed (the detailed contents are deemed as follows) (the above determination).

2) The so-called assertion on self-donation or self-reliance contribution

Before the merger of this case, Plaintiff SW, and Kim WD owned 100% of the Plaintiff’s shares, Plaintiff SK owned 42.5% of the shares in ETS (hereinafter “the shares in this case”). Plaintiff SW owned 10.24% of the shares in ETS as its own shares (hereinafter “the shares in this case”). This means that Plaintiff SW and Kim WD actually held 47.35% of the shares in ETS (the shares in this case + the shares in the Plaintiff’s shares in the Plaintiff’s shares in the instant case + the shares in the Plaintiff’s shares in the Plaintiff’s shares) prior to the merger.

In this case, the profit that Plaintiff ChoW and Kim WD obtained, which is the shareholder of Plaintiff ChoW, prior to the merger, due to the small allocation of new shares of Plaintiff SK for the instant combined shares, is not “donation” because Plaintiff ChoW and Kim WD obtained from the assets indirectly owned by Plaintiff SK prior to the merger. Moreover, the profit that Plaintiff ChoW and Kim WD obtained due to the small allocation of the Plaintiff’s new shares for the instant combined shares for the instant shares is also included in the part that was indirectly owned by Plaintiff ChoW and Kim WD prior to the merger, and such part should be excluded from the value of donated property (hereinafter “Plaintiff’s assertion of self-donation”).

In light of the above results, it means that the Plaintiff SK or ETS did not distribute profits to Plaintiff SW and KimWD from the perspective of Plaintiff SK or EST. However, only the Plaintiff’s shares owned by the Plaintiff SK or EST changed its form by means of a merger, and there is no possibility that the tax burden of Plaintiff SK or EST may be reduced unfairly due to the instant merger. Thus, the provision on the denial of unfair act and calculation does not apply (the Plaintiff’s assertion is referred to as “self-contributation of profit”).

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination on the evaluation of the value per share with the Plaintiff SK and EST

1) The part concerning the appraisal of the real estate owned by the Plaintiff SK and ETS

A) The main text of Article 60(1) of the Inheritance Tax and Gift Tax Act provides that the value of the property on which the inheritance tax or gift tax is levied under this Act shall be deemed to be based on the market value as of the date commencing the inheritance or the date of donation, and Article 60(2) of the same Act provides that the market value under the provisions of Article 60(1) of the same Act shall be deemed to be ordinarily established where a transaction is made freely between many and unspecified persons,

Article 49(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides, “The amount recognized as the market price under conditions prescribed by Presidential Decree, such as the expropriation price, public auction price, and public auction price,” under Article 60(2) of the Inheritance Tax and Gift Tax Act refers to the amount confirmed by any of the following, in cases of sale, appraisal, expropriation, auction, or public auction within six months before or after the base date of appraisal. The main sentence of subparagraph 1 provides, if there is a fact of sale and purchase of the relevant property, the transaction price thereof; if there is an appraisal price assessed by a reliable appraisal institution prescribed by Ordinance of the Ministry of Strategy and Finance with respect to the relevant property under subparagraph 2, the average amount of the appraisal price; and if there is a fact of expropriation, public auction, or public auction with respect to the relevant property under subparagraph 3, the compensation price, public auction price, and public auction price are not limited to those recognized as the market price under conditions prescribed by Presidential Decree. Thus, Article 49(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act can be deemed as the market price under delegation of the above provision.

B) According to the evidence Nos. 7, 8, and 6 through 11 of the instant merger, the details reflecting the Plaintiff’s land and building of the Plaintiff SK and EST’s net asset value at the time of the instant merger, and the details of NR appraisal and KH appraisal value are as follows.

(Omission of List)

C) The Defendants denied the value of land and building used by SY accounting corporation to assess the shares of the Plaintiff SK and EST on the ground that the appraisal value was not the average value of the appraisal value appraised by more than two appraisal institutions. Unlike the circumstances, the NR appraisal value was assessed by using the supplementary appraisal method stipulated in Article 61 of the Inheritance Tax and Gift Tax Act, such as the publicly assessed individual land price, and then revaluated the value of the Plaintiff SK and EST based on it. However, the NR appraisal value is based on the appraisal result conducted immediately before the merger of this case, based on the results of the assessment conducted immediately before the merger of this case. The NR appraisal value is assessed by the method of calculating the value of the building through the selection of comparative standard land, the method of re-financing adjustment, or comparison of the transaction cases, and thus, it can be deemed as the market price under Article 60(2) of the Inheritance Tax and Gift Tax Act. This part of the Plaintiffs’ assertion is reasonable.

In addition, the Defendants asserted that the reliability of the NY appraisal value is denied on the grounds that some of the land and building values on the stock value calculation report prepared by the SY accounting corporation are different from the NY appraisal value. However, the Plaintiffs stated that the SY accounting corporation prepared a stock value calculation report on March 20, 2010 and used it by the NY appraisal corporation for temporary appraisal at the same time, which did not complete the preparation of the appraisal report. The Plaintiffs stated that some of the differences have been caused. Such errors may be based on denying the reliability of the NY appraisal value assessment made by the SY accounting corporation, but may not be based on denying the reliability of the NY appraisal value. Therefore, the Defendants’ assertion is without merit.

D) Meanwhile, on July 9, 2013, which was after the issue of the merger ratio in the instant case’s tax investigation, the KH appraisal value was assessed retroactively at the time of the tax investigation. It is difficult to view that there is a high credibility in the value of the NR appraisal value as compared to that of the NR appraisal value because it is difficult to consider other circumstances, such as tax investigation, unlike the NR appraisal value. In this case, the Plaintiffs asserted that the average amount of the NR appraisal value and KH appraisal value should be deemed the market price. However, the Plaintiffs are used in assessing the value recognized as the market price pursuant to Article 49(1)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act. This is a method of using the NR appraisal value at the time of assessing the value recognized as the market price pursuant to Article 49(

2) The portion on the balance of the unpaid corporate tax account of Plaintiff SK

A) According to the evidence Eul's evidence 6, the plaintiff SK reflected 2,595,022,208 won in the balance of the unpaid corporate tax account as stated in the balance sheet of February 28, 2010, in the assessment of the net asset value of the plaintiff SK. This is the amount that is not reflected in the decision of correction of corporate tax reduction in the business year 2009, which is calculated by deducting the total amount of corporate tax reduction in the business year 2,82,125,385 won from the aggregate of the total amount of corporate tax reduction in the business year 2009 and the local income tax of 282,212,538 won from the aggregate of the amount of 51,610,860 won, which is calculated by adding the special tax for rural development, 2,295,144 won.

B) However, as seen earlier, the corporate tax for the business year 2009 of Plaintiff SK was corrected as listed below. In this case, the balance of the unpaid corporate tax account used by the Plaintiff should be reduced to the amount of the corporate tax reduced.

C) The legitimate balance of the Plaintiff’s corporate tax account shall be corporate tax, etc. that the Plaintiff SK is obligated to pay. Therefore, the Plaintiff’s remaining balance of the unpaid corporate tax of the Plaintiff SK is excessively assessed as the sum of KRW 788,801,93 and KRW 78,880,193 78,880,193, excluding interim prepayment and the paid-in tax, and the local income tax of KRW 867,682,126,00. Therefore, the Defendants’ assertion on this part is with merit.

D. Determination as to the so-called argument on self-donation or self-reliance

1) Article 38(1) of the Inheritance Tax and Gift Tax Act provides that an amount equivalent to the gains shall be included in the value of donated property in cases where a large shareholder of the merged corporation obtains profits due to the merger of a specially related corporation. Article 38(2) of the same Act provides that the amount shall be the difference between the value appraised, as prescribed by Presidential Decree, based on the basis immediately before the merger and the shares held by the shareholder of the merged corporation immediately before the merger. Article 28(3) through (6) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for a specific method of calculating the difference between the appraised value under Article 38(2) of the same Act. Meanwhile, Article 52(1) of the Corporate Tax Act provides that where it is deemed that a domestic corporation’s act or a transaction with a specially related person reduces the tax burden on the corporation’s income without regard to the calculation of the amount of income of the corporation, Article 88(1)8(4) of the Enforcement Decree of the Corporate Tax Act provides that the amount shall be calculated as one of gross income under Article 88(3)6) of the Corporate Tax Act.

2) The key point of the Plaintiffs’ assertion is that: (a) Plaintiff ChoW and Kim WD already held part of the net asset assets of the Plaintiff SK in the form of Plaintiff SK’s shares before the merger through Plaintiff SK and EWD; (b) thus, it is based on the fact that there is no change in the value of Plaintiff SK’s shares held by Plaintiff ChoW and KimWD even if a change in the governance structure was made. However, the Plaintiffs’ assertion is difficult to accept for the following reasons.

① Article 38 of the Inheritance Tax and Gift Tax Act, Article 28(3) through (6) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, Article 52(1) of the Corporate Tax Act, and Articles 88(1)8(a) and 89(6) of the Enforcement Decree of the Corporate Tax Act do not stipulate any exception to cases where treasury stocks accrue at the time of the merger. The Defendants’ imposition of corporate tax and the imposition of gift tax of this case are governed by the Inheritance Tax and Gift Tax Act and the Corporate Tax Act and subordinate statutes.

② As the Plaintiff’s new shares of the instant combined shares and the instant treasury shares were excessively allocated, the number of Plaintiff SK’s own shares after the merger was written down compared to the case where the fair merger ratio was applied, and the value of Plaintiff SK’s own shares was written down. Unlike the case where the shares of the merged corporation, which were held by the merged corporation prior to the merger, become the merged corporation’s own shares due to the merger, the merged shares and the instant treasury shares constituted assets under the Corporate Tax Act and constitutes a profit and loss transaction rather than a capital transaction (see, e.g., Supreme Court Decision 91Nu13670, Sept. 8, 192). Accordingly, if the instant combined shares and the instant treasury shares have decreased as the value of the Plaintiff’s own shares was changed to the Plaintiff’s treasury shares due to the merger, it can be deemed that the increase in the value of Plaintiff SK’s shares, which are subsequent to the merger, after the merger, owned by the Plaintiff SK and WD, has increased.

③ As long as the instant combined stocks and the instant treasury stocks are allocated with respect to the instant combined stocks, and do not allocate the new stocks for a considerable period of time, it cannot be deemed that the same treatment should be applied to the case where the instant combined stocks are retired at the same time as the instant merger or acquisition.

3) We examine the allegation that the provision on the rejection of unfair calculation does not apply to the merger of this case as the Plaintiff SK or SST’s tax burden did not decrease. Article 88(1) of the Enforcement Decree of the Corporate Tax Act provides that “Where it is deemed that the tax burden has been unjustly reduced” under Article 52(1) of the Corporate Tax Act refers to any of the following cases, and subparagraph 8(a) provides that a corporate shareholder distributes profits to other shareholders who are specially related parties, due to unfair merger. It does not necessarily require the intent to avoid or reduce the tax burden (see Supreme Court Decision 2006Du125, Nov. 10, 206). In the instant case, it is difficult to deem that the merger and distribution of profits by Plaintiff SK and SST to Plaintiff SW and KimD constitute an unfair merger under Article 88(1)8(a) of the Enforcement Decree of the Corporate Tax Act, and that the Plaintiffs’ tax burden has unjustly reduced pursuant to Article 88(1)8(1) of the Corporate Tax Act.

E. The portion of the calculation of the denied amount of wrongful calculation by evaluating the increase in the value of the shares of the SST held before the merger between the Plaintiff SK and the EST

1) Although this part did not initially claim the plaintiffs, it is related to the assertion on the increase in the shares held by the related parties who have asserted and withdrawn, and therefore, it is ex officio determined in accordance with the latter part of Article 26 of the Administrative Litigation Act.

2) Article 63(3) of the Inheritance Tax and Gift Tax Act provides that "where the evaluation of securities, etc. is applied, shares of the largest shareholder, etc. shall be increased by an increase of a certain rate, and shares, such as shares of a corporation with deficits, shall be excluded." Article 53(5)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that "the calculation of profits under Articles 28 through 30" shall be made with shares excluded from the evaluation of the increase and decrease of the tax burden, but Article 88(1)8 of the Enforcement Decree of the Corporate Tax Act provides that "if shares are calculated by an increase or decrease of the market price in the merger between corporations with a special relationship, the merger shall be made at an unfair rate." Article 89(6) of the Enforcement Decree of the Corporate Tax Act provides that "where profits are distributed to a person with a special relationship pursuant to Article 88(1)8 of the Inheritance Tax and Gift Tax Act, the calculation of profits under Article 38(5)28(3) through (6) of the Enforcement Decree of the Inheritance Tax Act shall apply mutatis mutandis.

3) The purport of Article 63(3) of the Inheritance Tax and Gift Tax Act is to evaluate the shares held by the largest shareholder, etc. by increasing their property value by deeming that the shares held by the largest shareholder, etc. include the management premium, and thereby reflecting such management premium. However, in cases where the management premium, which was the premise for the evaluation of increase of the management premium, appears to be not meaningful, it shall be excluded from the shares subject to the evaluation of the premium. In particular, in cases of calculating profits arising from merger, capital increase, capital increase, capital decrease, or investment in kind as provided in Article 53(5)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, it is excluded from the shares subject to the evaluation of the premium, not from the shares per se being donated, but from indirectly transferring profits through the merger. Meanwhile, Article 88(1)8 of the Enforcement Decree of the Corporate Tax Act and Article 89(6)6 of the Enforcement Decree of the Corporate Tax Act, which provides for the method of calculating the amount of profits calculated based on the calculation of profits under Article 58(2) of the Inheritance Tax Act.

4) However, in calculating the rejection amount of the wrongful calculation of the Plaintiff SK and ETS, the head of the Defendant CJ Tax Office assessed the Plaintiff’s shares by adding 15% to 15%, and deemed that the difference between the value of the shares and the value of the shares after the merger is an unfair act and included in the gross income for the business year 2010 of the Plaintiff SK and ETS. This is against Article 89(6) of the Enforcement Decree of the Corporate Tax Act and Article 53(5)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act.

(f) Political tax amount and small tax amount;

As seen earlier, the NR appraisal value shall be used for the appraisal of the shares of the Plaintiff SK and the EST, and the balance of the unpaid corporate tax account shall be KRW 867,682,126, and the value per share of the Plaintiff SK shall be KRW 151,885, and the value per share of the ETS shall be KRW 52,597, as shown in the attached Table of Political Party Tax. The amount of a legitimate tax calculated by using the aforementioned amount shall be KRW 866,280,602, corporate tax for the business year of 2010, as shown in the attached Table of Political Party Tax, and KRW 50,345,572, corporate tax for the business year of 2010, and KRW 2,471,05,721, and KRW 98,212,141 of the Plaintiff KimW’s gift tax for the business year of 2010, as indicated in the attached Table of Political Party Tax.

3. Whether the disposition of imposing corporate tax for the business year 201 of the instant case is legitimate

In the disposition of corporate tax for the pertinent business year 201, and following the revision of the Building Evaluation Marginal Profit for the business year 2010, the part of KRW 557,594 of corporate tax amounting to 2,049,751 is unlawful.

According to the evidence Nos. 1-2 and 3-3, the plaintiff SK merged the ETS and succeeded to the market price of the ETS-owned building in the business year 2010, and added 337,715,312 won to lump sum depreciation reserve in the calculation of losses (reserve of △△), and at the same time, adjusted the same amount as the same as the profits from the merger evaluation into the gross income (reserve of △△), and treated 8,442,83 won as the returned amount of lump sum depreciation reserve in the business year 201 as the gross income (reserve). However, the defendant CJ chief of the tax office deemed the amount of lump sum depreciation reserve and the amount of the merger evaluation as KRW 419,705,369, and corrected the tax adjustment for the business year 2010, and corrected the returned amount as KRW

However, since the book value of the building immediately before the merger of SST was 3,549,863,804 won, and the reasonable building value was 4,052,03,500 won based on the NTR appraisal value, the legitimate lump sum depreciation and merger evaluation marginal profit should be more than the amount adjusted by the defendant CJ head of the tax office (3,549,863,804 won). In this case, the return of the lump sum depreciation in the business year 2011 is higher than the amount adjusted by the defendant CJ head of the tax office. Therefore, the imposition of corporate tax following the correction of the return of the lump sum depreciation in the business year 2011 within the scope of legitimate tax amount, the plaintiff CJ head of the tax office's assertion is without merit.

4. Conclusion

The plaintiffs' claims shall be accepted within the scope of the above recognition, and the remaining claims shall be dismissed as without merit, and the costs of lawsuit shall be apportioned according to the winning ratio by the plaintiffs and the defendants. It is so decided as per Disposition.

November 21, 2016