early 209west2509 ( November 20, 2009)

Whether the donation of the acquisition fund of shares was made under title trust

It is reasonable to impose gift tax on the disputed amount on the claimant in consideration of the complaint, details of transfer income tax, verification of payment, necessity for title trust, etc. filed with the court, in the course of tax investigation on the funds to acquire stocks.

1. All of the plaintiff's claims are dismissed.

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

The Defendant imposed a gift tax of KRW 1,111,50,000 on the Plaintiff on February 5, 2009.

And each disposition of imposition of gift tax of KRW 700,700,000 shall be revoked for the year 198.

1. Details of the disposition;

A. A. Around July 1996, the Plaintiff’s public auction procedure for the shares 5,888 shares owned by BA (hereinafter “the shares of this case”) which are the major shareholders of Doldong International Co., Ltd. (hereinafter “Sari foreign Co., Ltd.”) was conducted, on August 1996, acquired the shares of this case as KRW 588 billion in total, including KRW 2 billion received from B, who is the father of this case. On December 18, 1998, the Plaintiff received KRW 1.63 billion from B on December 18, 1998.

B. From October 2, 2008 to November 27, 2008, the Daejeon Regional Tax Office investigated the Plaintiff’s gift tax on the ground that the Plaintiff received title trust of the instant shares, etc. from B, on February 5, 2009, the Defendant issued a disposition of imposition of KRW 11.5 billion for the reason that the Plaintiff donated the Plaintiff’s cash amount of KRW 2 billion, not the non-party company’s shares, and KRW 1.63 billion in cash, not the non-party company’s shares, to the Plaintiff on February 5, 2009, on the ground that the Plaintiff did not report it (hereinafter referred to as the “instant first disposition”), and the disposition of imposition of KRW 770 million for the gift tax of KRW 1.1.5 billion for the year 1996 (hereinafter referred to as the “instant second disposition”).

C. On May 4, 2009, the Plaintiff filed an appeal with the Tax Tribunal on each of the dispositions of this case, but was dismissed on November 20 of the same year.

[Grounds for Recognition: The absence of dispute, Gap evidence 1, Eul evidence 2, Eul evidence 1, Eul evidence 1, Eul evidence 1, Eul evidence 1, Eul evidence 1, Eul evidence 16, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

For the following reasons, each of the dispositions of this case should be revoked in its entirety because it is unlawful.

1) Disposition No. 1 of this case

A) The Plaintiff was not only an administrator of the BB but also the Plaintiff and the BB were in a partnership business relationship in which the Plaintiff invested funds in the non-party company and received profits by sharing profits by participating in the management.

B) Even during the process of public sale of the instant shares owned by BA, the Plaintiff and B have invested KRW 4 billion in the partnership relationship and KRW 2 billion. Thus, 588 shares of this case are the partnership property of the Plaintiff and BB. The Plaintiff has shares in the shares of KRW 4 billion among them, and the Plaintiff has shares in the shares of KRW 4 billion in the shares of KRW 2 billion.

C) Therefore, the Plaintiff did not receive a donation of KRW 2 billion in cash from thisB.

2) Disposition No. 2 of this case

A) The Plaintiff was paid KRW 1.63 billion in cash by thisB in order to repay the Plaintiff’s debt and to pay interest on the loan amounting to KRW 2 billion in the process of the purchase of the instant shares, which are the business property of the Plaintiff and the BB.

B) Therefore, the Plaintiff did not receive a donation from thisB to KRW 1.63 billion in cash.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) The burden of proof of the existence of the taxation requirement fact is against the tax authority, but if the facts alleged in the facts alleged in the taxation requirement in light of the empirical rule are revealed in the litigation process, it cannot be deemed illegal disposition that failed to meet the taxation requirement against the tax imposition disposition unless it proves such circumstances (see, e.g., Supreme Court Decisions 89Nu6006, Apr. 27, 1990; 99Du4082, Nov. 13, 2001; 99Du4082, Nov. 13, 2001). If the tax authority received a written confirmation of the contents of the person who donated a donation from the taxpayer in the course of a tax investigation, it cannot be readily denied the confirmation document unless there are special circumstances, such as where the certificate was drafted compulsorily against the will of the originator, or it is difficult to consider it as evidence of specific facts due to lack of its content, etc. (see, e.g., Supreme Court Decision 201Du2560, Dec. 6, 2002).

2) As to the legitimacy of the first disposition in this case

(a)a fact of recognition;

(1) The non-party company was established on December 21, 1974 by B, etc. and transferred to B in the name of 4,989 shares out of 35,00 shares issued and outstanding. The non-party company purchased shares of the non-party company 1,800 shares and 3,31 shares out of 1,531 shares of the non-party company on May 31, 1988, and 1,531 shares of the non-party company on July 1, 1993. The non-party company purchased shares of the non-party company 1,00 shares of the non-party company from MaximumD on December 1, 1987 and transferred to 1,850 shares from MaE on May 21, 198 to 350 shares and 500 shares from CC on May 19, 198, the transfer to 20 shares of the non-party company 1,850 shares from CC.

(2) In the public sale process around July 1996, the Plaintiff purchased the instant shares of KRW 2 billion in total of KRW 2 billion in cash and KRW 2 billion in the Plaintiff’s loan borrowed from △△, etc. from the Plaintiff, and obtained a transfer of ownership and issuance of share certificates in the Plaintiff’s future. Accordingly, the Plaintiff became a controlling shareholder of the non-party company, whose share in this BB and the Plaintiff’s family members, etc. were 51.023% of the shares issued by the non-party company. Accordingly, the Plaintiff was working as the representative director of the non-party company from October 10, 1996 to October 2002, and this B was appointed as the representative director of the non-party company on October 14, 2005.

(3) Upon approval by the temporary shareholders' meeting on October 5, 2005 of the plan for the merger between the non-party company and the non-party company in the name of the non-party company 9,219 shares (3,31 shares + 5,88 shares), including the shares in this case, against the non-party company on October 19, 2005, the plaintiff claimed that the non-party company purchased the shares in this case with the above cash 2 billion won donated by the non-party company in this case. However, on February 12, 2007, the above court rejected the plaintiff's claim that the non-party company did not have the right to file an application for the determination of purchase price of shares against the non-party company 9,219 shares since all of the above shares 9,219 shares were trusted by B from the non-party company, and the plaintiff appealed the above decision under Daejeon High Court Decision 207Ra4444 against the above decision.

(4) Meanwhile, the Plaintiff filed a lawsuit against the non-party company on the claim for share transfer of 1,800 shares of the non-party company, the transfer of which is entered in the name of thisG in the future, Daejeon District Court 2005Gahap 10160. The above court rendered a dismissal judgment on July 5, 2006, and the Plaintiff appealed on the above judgment as the Daejeon High Court 2006Na8496.

(5) In the Daejeon High Court case No. 2006Na8496, Sept. 7, 2007, the non-party company purchased KRW 9,219 shares from the Daejeon High Court as to the plaintiff's application for the determination of the purchase price of shares at KRW 4.5 billion, and the plaintiff filed an appeal against the return of shares at the Daejeon District Court 2006Na10307 and the appeal against the above Daejeon High Court 2007Ra44 case, respectively (hereinafter referred to as the "instant conciliation"). The non-party company paid the plaintiff a sum of KRW 4.5 billion from December 4, 2007 to December 31, 2008, and the plaintiff voluntarily withdrawn all the pertinent lawsuits, including each of the above appeals.

(6) On November 2008, the Plaintiff prepared and submitted a written confirmation to the effect that the Plaintiff received a donation of KRW 2 billion in cash and KRW 1.63 billion in cash (hereinafter “instant confirmation document”) from the said Nonparty Company’s 9,219 shares from the said Nonparty Company in the process of investigation by the Daejeon Regional Tax Office on suspicion of tax evasion, etc., even though the said shares were held in title by the said Nonparty Company’s 9,219 shares, and the said B also prepared and submitted such written confirmation document.

[Ground for Recognition: The absence of dispute, Gap evidence 3-1, 2, 4 through 6, 9 through 19, Eul evidence 2, 5, 10, 11-1 through 3, Eul evidence 3, 7-1 through 6, Eul evidence 4, 12, 14, 16 through 20, Eul evidence 6, 8, 9, 13, 15-1, 2-1, and the purport of the whole pleadings]

B) As seen earlier, thisB withdrawn the said cash KRW 2 billion from its new bank account, etc. and paid to the Plaintiff, and the Plaintiff was investigated as a suspicion of tax evasion of the said shares 9,219, and the Plaintiff prepared and submitted the instant confirmation document stating that the donation was not the said shares 9,219, but the said cash KRW 2 billion. Thus, it is reasonable to deem that the said cash amount was donated to the Plaintiff, barring any special circumstances.

On the other hand, the above facts and evidence revealed that this case's shares were purchased from EF, EG 3,650 shares (1,850 shares + 1,800 shares) and EB were purchased from EF, EG 3,331 shares. Unlike the 3,331 shares transfer to the plaintiff, the Daejeon District Court 2006Na10307 shares transfer against EF, which the plaintiff filed against EF, stated that this case's shares were purchased directly by the plaintiff, and that this case's shares were "within 2 billion won at the time this case's shares were delivered to EF 1,000,000 won." In light of the facts that this case's shares were purchased from EB, Daejeon District Court 2006 non-conforming 24 shares purchase price determination application, etc., and that this case's shares were not yet purchased from EF 9,000,000 won in the previous lawsuit, and the plaintiff and EB had no other evidence that this case's shares were purchased during the procedure.

C) Therefore, the Plaintiff’s above assertion is without merit.

3) As to the legitimacy of the second disposition of this case

A) According to the above evidence, the Plaintiff withdrawn KRW 1.63 billion from the new bank passbook of this B on December 18, 1998, and the Plaintiff, in the course of being investigated on suspicion of tax evasion, can be recognized as having prepared and submitted the instant confirmation document that the Plaintiff received the donation from thisB, barring any special circumstance, it is reasonable to deem that the said cash KRW 1.63 billion was donated to the Plaintiff by thisB, barring any special circumstance.

B) Meanwhile, according to the above evidence, the Plaintiff paid interest of KRW 2 billion on the loan 1.63 billion to the Plaintiff at the time of acquiring the instant shares from thisB. In Daejeon District Court 2006Na10307, Daejeon District Court 2006 or 10307, the Plaintiff submitted a preparatory document stating that the Plaintiff would have paid interest of KRW 1.66 billion on the loan 2 billion to the Plaintiff himself. In the process of being investigated on suspicion of the Plaintiff’s omission of gift tax as above, this BB also prepared and submitted a confirmation document stating that the Plaintiff would have donated the above cash 1.63 billion to the Plaintiff. In light of the above facts, the confirmation document of this case can be acknowledged without any evidence that the Plaintiff was forced to prepare the said cash 1.63 billion against the Plaintiff’s will, and there is no evidence to acknowledge the Plaintiff’s lack of interest on the loan 1.6 billion in the process of collecting the loan 200 million to the Plaintiff’s loan 3 billion won.

C) Therefore, the Plaintiff’s above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.