[1] In determining whether a real estate sales business is the principal business of the pertinent corporation, whether the sales revenue of the newly constructed building can be included in the sales revenue of the real estate

[2] The time when a corporation whose main business is real estate sales business uses land for sale directly for its unique business

[1] Article 84-4 (3) 2 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14481 of Dec. 31, 1994) provides that "the land for sale acquired by a corporation which does not engage in real estate sales business as its main business for the purpose of selling to a third party shall be land for non-business use of a corporation." Article 46-6 of the Enforcement Rule of the Local Tax Act provides that "the main business under Article 84-4 (3) 2 of the Decree under Article 84-4 (3) 7 of the Decree" shall be the case falling under any of the following subparagraphs.

[2] In determining whether the land falls under the land that is not used directly for the corporation's unique duties under Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 13033 of Jun. 29, 190), the time when the corporation that runs real estate sales business directly uses the land for its unique duties, and in light of the purport of the relevant provisions, such as the Local Tax Act, etc. with respect to the acquisition tax, in case where the corporation concludes a sales contract to sell the land within three years after it acquired the land and receives the down payment, it shall be deemed that the corporation directly uses the land under Article 84-4 (1) of the Enforcement Decree of the Local Tax Act, barring any special circumstance. The sale referred to in this case shall be deemed as the time of transfer of the asset under the Income Tax Act or as corresponding to the time of acquisition under the same Enforcement Decree,

[1] Article 84-4 (3) 2 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14481 of Dec. 31, 1994), Article 46-6 of the Enforcement Rule of the Local Tax Act / [2] Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 1303 of Jun. 29, 190)

[2] Supreme Court Decision 91Nu2861 delivered on October 8, 1991 (Gong1991, 2748) Supreme Court Decision 92Nu3427 delivered on June 9, 1992 (Gong192, 2168)

Postal Construction Co., Ltd. (Attorney Choi Jin-jin, Counsel for the defendant-appellant)

Yangsan Gun (Attorney Kim Sang-hoon, Counsel for the defendant-appellant)

Supreme Court Decision 94Nu5786 delivered on November 11, 1994

Busan High Court Decision 94Gu7645 delivered on June 2, 1995

The appeal is dismissed. The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

1. On the first ground for appeal

Article 84-4 (3) 2 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 1481 of Dec. 31, 1994) provides that the land for sale acquired by a corporation which does not engage in real estate sales business as its main business to sell to a third party shall be land for non-business use of a corporation. Article 46-6 of the Enforcement Rule of the Local Tax Act provides that "the main business under Article 84-4 (3) 2 of the Decree is "the main business under Article 84-4 (3) 7 of the Decree" shall be the case falling under any of the following subparagraphs.

In accordance with the purport of the above, the judgment of the court below that the ratio of the sales amount of the plaintiff corporation's 1989 and the sales amount of the sales amount of the real estate in the same year to the total sales amount of the real estate in the same year constitutes 50/100 or more of the above rules and thus the main business of the plaintiff corporation shall be deemed the real estate sales business is just and there is no error of law by misapprehending the legal principles like the theory of lawsuit.

2. On the second ground for appeal

In determining whether a corporation's main business is a land that is not directly used for its unique business under Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 1303 of Jun. 29, 1990), the time when the corporation engaged in real estate sales business directly uses (sale) the land for its unique business, in light of the purport of relevant provisions, such as the Local Tax Act with heavy acquisition tax, where the corporation concludes a sales contract to sell the land within three years after the acquisition of the land and receives the down payment, it shall be deemed that the corporation directly uses the land under Article 84-4 (1) of the Enforcement Decree of the Local Tax Act, unless there are special circumstances. The sale referred to above shall be deemed as the time of transfer of the asset under the Income Tax Act or as corresponding to the time of acquisition under the Enforcement Decree of the same Act, or shall not be deemed to have received the remaining payment (see Supreme Court Decision 92Nu3427, Jun. 9, 1992

The judgment of the court below to the same purport is just and there is no error of law by misunderstanding the legal principles like the theory of lawsuit.

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

Justices Lee Jae-soo (Presiding Justice)