early 2010 Heavy0815 (2010.06.07)

In short of the direct cultivation period determined by the requirements for reduction or exemption of capital gains tax on substitute farmland.

As long as a third party, after acquiring the previous farmland, has harvested rice continuously, it cannot be treated as the direct cultivation of the period. If the period is excluded, the direct cultivation period for the previous farmland is merely two years and ten months, and it falls short of the direct cultivation period as stipulated by the requirements for reduction and exemption for the substitute farmland.

2011Du2016 Revocation of Disposition of Imposing capital gains tax, etc.

KimA

port of origin

Seoul High Court Decision 2011Nu1063 Decided July 13, 2011

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Under Article 70(1) of the former Restriction of Special Taxation Act (amended by Act No. 921, Jan. 1, 2010) and Article 67(2) and (3)1 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 22085, Mar. 26, 2010), in order to reduce or exempt transfer income tax on income arising from the substitute land of farmland, it is required that one-half or more of the cultivation of crops or perennial plants are engaged in cultivating or growing with one-half or more of their own labor in the previous farmland while residing in the location of the farmland for three or more years in order to be subject to reduction or exemption of transfer income tax on income arising from the substitute land of the farmland (amended by Presidential Decree No. 22085, Mar. 26, 2010). Meanwhile, the interpretation of tax laws and regulations under the principle of no taxation without the law should not be interpreted in accordance with the legal language, barring any special circumstance. In particular, it can be interpreted that the provision clearly preferential provisions among the requirements for reduction or exemption accords.

B. The court below held that since the Plaintiff had B grow rice continuously from August 18, 2005 to October 18, 2005 when acquiring the previous farmland of this case, so long as the Plaintiff had ever harvested rice, it is difficult to immediately move the crops already cultivated and there is transaction customs giving the right to harvest to the person who is softened, the above period cannot be treated as being directly cultivated by the Plaintiff. Furthermore, the evidence submitted by the Plaintiff alone is difficult to recognize that the Plaintiff had been engaged in the farmland rearrangement work, such as opening a farm road and waterway around the farmland during the above period, and even if not, according to the evidence of employment, the Plaintiff was merely not engaged in the cultivation of the crops by operating a singing practice from October 1, 2004 to July 18, 2008, and the Plaintiff’s farmland rearrangement work alone does not constitute the whole farming period of 50% of the farmland, and determined that the Plaintiff could not directly cultivate the farmland within the above period of 20% of the total farming period.

C. Examining the above facts duly admitted by the court below in light of the legal principles as seen earlier, the court below is justified to determine that the period of about three months for which the plaintiff had continuously cultivated rice after the plaintiff acquired the previous farmland of this case was not included in the period of his own cultivation. The court below did not err in the misapprehension of legal principles as to the suitability of customary law and crops as to farmland transaction, the principle of substantial taxation, or the principle of interpretation of tax law, as alleged in the grounds of appeal.

2. Regarding ground of appeal No. 2

The allegation in the grounds of appeal in this part is that the court below recognized the fact that the plaintiff was engaged in cultivating crops or did not cultivate more than 1/2 of the farming work with his own labor during the period from August 18, 2005 to October 2005, the court below's determination on the evidence is unlawful without making all necessary deliberations. However, in light of the records, the recognition of facts and the selection and evaluation of evidence conducted on the premise thereof belong to the exclusive authority of the court of fact-finding as long as they do not go beyond the limit of the free evaluation of evidence. In light of the records, the above fact-finding by the court below is just and justified, and it does not seem that the court below failed to exhaust all necessary deliberations or it did not go beyond the limit of the free evaluation of evidence. Accordingly, the above allegation in the grounds of appeal is merely to criticize matters belonging to the exclusive authority of the court of fact-finding,

3. Conclusion

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