In calculating capital gains, requirements for land excluded from special long-term holding deduction pursuant to Article 46-3 of the former Enforcement Decree of the Income Tax Act.

In calculating capital gains, the term "Bed site" under Article 46-3 of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 14467 of Dec. 31, 1994) that is excluded from the special long-term holding deduction shall refer to the land on which a building is substantially able to be constructed, regardless of its land category in the public record, and whether it falls under such a site shall be determined by unit at the time of transfer as of the time of transfer. For the land excluded from the special long-term holding deduction under the above provision, it shall fall under idle land, etc. as of the date of transfer under Article 8 of the Land Excess Profit Tax Act as of the date of transfer, and shall fall under the land which is a site or appurtenant to a building and exceeds the area calculated by multiplying the floor area

Article 8 of the Land Excess Profit Tax Act, Article 23 (2) 2 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) (see current Article 95 (2)), Article 46-3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994)

Supreme Court Decision 92Nu4291 delivered on June 26, 1992 (Gong1992, 2313), Supreme Court Decision 92Nu15925 delivered on February 26, 1993 (Gong1993Sang, 1111), Supreme Court Decision 92Nu19613 delivered on July 27, 1993 (Gong193Ha, 2453), Supreme Court Decision 94Nu15806 delivered on April 11, 1995 (Gong195Sang, 1901), Supreme Court Decision 95Nu153 delivered on August 11, 1995

Kim Literature (Attorney Kim Chang-chul et al., Counsel for the defendant-appellant)

Head of the Office of Government

Seoul High Court Decision 96Gu10371 delivered on November 27, 1996

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

We examine the grounds of appeal.

In calculating capital gains, the term "Bed site" under Article 46-3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467, Dec. 31, 1990; hereinafter referred to as the "former Enforcement Decree") that is excluded from the special long-term holding deduction means the land substantially able to be constructed, regardless of its land category in the public register, on which the building is not settled (see, e.g., Supreme Court Decisions 94Nu15806, Apr. 11, 1995; 95Nu153, Aug. 11, 1995; 92Nu4291, Jun. 26, 1992; hereinafter referred to as the "former Enforcement Decree") that is not subject to such special holding deduction shall be determined by unit at the time of transfer (see, e.g., Supreme Court Decisions 94Nu1563, Jul. 26, 1993>

In the same purport, the court below is just in holding that one of the land in this case is a site that can be substantially constructed even if the land category was a miscellaneous site at the time of transfer, and that another one is the land annexed to a factory building under Article 46-3 of the former Enforcement Decree, but part of it constitutes idle land under Article 8 (1) 1 of the Land Excess Profit Tax Act, and thus is excluded from the special long-term holding deduction within the scope of the above, and there is no error in the misapprehension of legal principles as to the requirements of the land subject to the special long-term holding deduction. There is no reason to argue

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 Yong-hun (Presiding Justice)