1. On April 11, 2013, the head of Gangnam-gu Tax Office (hereinafter “the head of Gangnam-gu Tax Office”) imposed on Plaintiff A a gift tax amounting to KRW 10,910,016.

(2) The Plaintiffs reported and paid KRW 840,052,540 to the gift tax attributed to Plaintiff B in 2010 on February 26, 2010, and KRW 10,910,016 to the gift tax attributed to Plaintiff A in 2010 (hereinafter “instant return and payment,” and each of the above tax amount paid by the Plaintiffs was referred to as “each of the instant tax amount due.” In filing the said return and payment, the Plaintiffs calculated “an appraised value per share of the reduced shares” as of November 27, 2009 (the date on which the temporary general meeting of shareholders resolved to reduce the capital) in accordance with the supplementary assessment method under the Inheritance Tax and Gift Tax Act. The specific grounds for calculating the tax amount are as follows.

[Attachment 1] The formula in Article 29-2 (2) 1 of the Enforcement Decree of the Inheritance and Gift Tax Act (the appraised value of one share of the capital - the amount paid at the time of the retirement of shares)* The ratio of shares in total after the capital reduction of a major shareholder* The number of capital / the total number of shares in the capital reduction of a major shareholder* Plaintiff A (126,694 won - 62,500 won) of a person with special interest in the major shareholder* (197,700 shares / 260 shares)* (126,694 won - 62,500 won) = 840,052,540 won (126,694 won - 62,500 won) = 56,000 shares* (8,000 shares/260,000 shares) = 10,910,016 won

F. Since then, pursuant to Article 42(3) of the Inheritance and Gift Tax Act, the Plaintiffs are not subject to gift tax even if their share ratio increases due to capital reduction, in cases where “the transaction between persons who are not related parties is deemed to have justifiable grounds in light of transactional practices.” In determining that retirement of the instant shares constitutes this case, Plaintiff B requested the head of the Cheongju District Tax Office on January 27, 201, and Plaintiff B to rectify the amount of each of the instant tax payable to Defendant Gangnam-gu Tax Office on February 12, 2013.

G. As to this, the Defendants’ completion of capital reduction of the pertinent shares at the expiration of five years and eight months from the time when C acquired its own shares cannot be recognized as “justifiable cause in light of trade practice” and it is not recognized in the Commercial Act.