Cho High Court Decision 201Do0434 ( October 16, 2011)

The conversion acquisition value is legitimate because it is impossible to confirm the actual transaction price.

Since the registration of preservation of ownership of newly-built house was made to the owner of the destroyed tenement house, it is difficult to view the transaction value of the household sold in general as business example, and since there is no documentary evidence to verify the acquisition value, the disposition that made the conversion amount as acquisition value is legitimate.

Article 96 of the Income Tax Act, Article 114 of the Income Tax Act

Article 176-2 of the Enforcement Decree of Income Tax Act

2011Gudan20126 Revocation of Disposition of Imposing capital gains tax

KimA

Head of Seodaemun Tax Office

March 21, 2012

April 18, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition on the Plaintiff on September 3, 2010 on the portion exceeding KRW 000 out of the transfer income tax belonging to the year 2007 shall be revoked.

1. Details of disposition;

A. The Plaintiff acquired on February 21, 1995, and transferred Eunpyeong-gu Seoul O-dong O-dong No. 000 (hereinafter “instant real estate”) on March 21, 2007, but did not report the transfer income tax.

B. On September 1, 2010, the Defendant calculated transfer margin of KRW 000 on the transfer of the instant real estate at the transaction value recorded in the real estate registration book, and the acquisition value is KRW 000 on the basis of the conversion value under Article 176-2(2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20618, Feb. 22, 2008; hereinafter “former Enforcement Decree of the Income Tax Act”). On September 1, 2010, the Defendant decided and notified the Plaintiff of KRW 00 of transfer income tax for the year 2007 (hereinafter “instant disposition”).

C. The Plaintiff appealed against the Defendant on September 16, 2010, but was dismissed on October 28, 201, and again filed an appeal with the Tax Tribunal on January 21, 201, but the appeal was dismissed on May 16, 201.

[Reasons for Recognition] Uncontentious Facts, Gap evidence 1, Gap evidence 3-4, Gap evidence 10-I, 2, Eul evidence 1-2, Eul evidence 3, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. Summary of the plaintiff's assertion

The Plaintiff transferred 00 OOO 000 OO 000 held before the new construction of the instant real estate to FF Construction Co., Ltd. (hereinafter “FF Construction”). Of the sale price, 000 won in the instant real estate which was reconstructed by FF Construction was replaced by the appraisal of the previous house in 000 won and paid 000 won in FF Construction. Therefore, the acquisition price of the instant real estate is 00 won in the actual transaction price. Even if the acquisition price of the instant real estate cannot be recognized or confirmed as 00 won in the acquisition price, the acquisition price of the instant real estate is 00 won in the actual transaction price. Even if it is impossible to recognize or confirm 00 won in the acquisition price, the legitimate transfer income tax calculated based on the actual transaction price or transaction example is 00 won in the amount calculated based on the actual transaction price, regardless of the fact that the Defendant applied 000 won, which is the conversion price determined by the method of the standard market price.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

Articles 96(1), 97(1)1(a) and (b), and 114(7) of the former Income Tax Act (amended by Act No. 8825, Dec. 31, 2007; hereinafter referred to as the "former Income Tax Act") provide that when the actual transaction price is verified in calculating gains from the transfer of real estate, the actual transaction price shall be imposed in principle. However, even if the actual transaction price is verified, if there is no evidentiary document, such as a taxpayer's account book, etc. on the acquisition price, or if it is obvious that there is no or false transaction price, the administrative agency may not be the actual transaction price declared by the taxpayer, and the administrative agency shall determine the acquisition price by applying the method

(1) First of all, with regard to the fact that the acquisition value of the instant real estate is KRW 0 million, the Plaintiff did not submit objective data, such as the contract, receipts, and financial data to prove the actual transaction value in the instant lawsuit. After the witness Hah’s testimony, the Plaintiff asserted that the acquisition value was KRW 000,000, which is the appraised value of the previous house and KRW 000,000 additionally paid in cash after the witness Hah’s testimony. The previous house had no objective data assessed at KRW 00,00 (the witness Ha testified testified that the previous house was assessed at a higher level than the previous house price at the time of reconstruction and set at KRW 00,00,000), and there is no other evidence to acknowledge that the actual transaction value of the instant real estate was KRW 4,5,18,19 (including each number), and the witness Hah’s testimony alone is insufficient. Ultimately, there is no other evidence to acknowledge that the actual transaction value of the instant real estate is KRW 000.

(2) Whether the conversion value is illegal

(A) The Plaintiff asserts that the acquisition price of the instant real estate should be applied prior to applying the conversion price.

(B) Facts of recognition

On December 3, 1983, the Plaintiff acquired an O-dong 000 O-dong 000 (79.67/7/7/7 of the site shares) from Eunpyeong-gu Seoul Metropolitan Government O-dong 000 on December 3, 198, and lost the above house and sold the instant real estate newly constructed on the same lot number to 00 won on February 21, 1995 after the registration of ownership preservation was made on March 21, 2007.

In addition to the above land, the owner of the existing house, including the plaintiff, registered the preservation of ownership and transferred the ownership of the remaining eight bonds (00 units, 000 units, etc.) by 10 co-ownership shares in respect of the remaining eight bonds (10 units, 00 units, etc.).

O The sales price of the instant real estate (exclusive use area of 104.4mm.) was sold to the YangJ on February 18, 1995. The sales price under the approval seal contract was 000 won, and the sale price was 000 won between FF Construction and HK on November 4, 1994 and HK on the real estate sale price of 00 m. (exclusive use area of 101.4m.4m.).

[Ground of recognition] In the absence of dispute, evidence of Gap's 3-1, 2, 5, 6, Gap's evidence 6-1, 2, 7, and 17, the purport of the whole pleadings and arguments

(C) According to the above facts, on February 21, 1995, the real estate of this case was immediately registered for preservation of ownership in the Plaintiff’s name, and the remaining eight bonds, which were provided to the owners of existing housing, were transferred in the name of ten previous housing owners, including the Plaintiff, in the name of joint owners of the existing housing, in the name of ten previous housing owners, and thereafter the ownership was transferred in the name of the purchaser. The Plaintiff made registration for preservation of ownership of newly-built house to the owner of the previous destroyed apartment house. Since 000 units and 000 units and 000 units were generally sold, it is difficult to regard the transaction value of 00 units or 000 units as the transaction value of the newly-built house as the general sale, and there is no other evidence to recognize otherwise. Therefore, the disposition of this case is legitimate in calculating the amount of transfer income tax under the provisions of the former Income Tax Act and the former Enforcement Decree as the acquisition value of the real estate.

3. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.