Cho High Court Decision 2009Du2758 (No. 22, 2009)

Appropriateness of the assertion that a gift tax disposition is void as a matter of course

Since the tax authority’s objective circumstance exists to mislead his father and son that there was a gift between her father and son, it cannot be deemed null and void as a matter of course.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

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

On December 3, 2007, the defendant confirmed that the disposition of imposition of gift tax of KRW 361,631,618 against the plaintiff against the plaintiff on December 3, 2007 (the notice of claim No. 1 of the complaint seems to be a clerical error of October 25, 2007) is null and void.

1. Details of the disposition;

A. On September 7, 2006, in the name of the Plaintiff’s wife, a loan of KRW 1,400,000,000 (hereinafter “instant loan”). Around 139,031 square meters (hereinafter “1 real estate”) owned by the Plaintiff at BB city, BB city, 139,031 square meters (hereinafter “the Plaintiff’s property”); and B-1 forest and field 8,926 square meters (hereinafter “2 real estate”) owned by the Plaintiff’s wife, including 138, 298, and 138, and 2-1 forest and field 8,926 square meters (hereinafter “the highest credit amount”): the obligor, 1,820,000,000, the obligor, 2BA: hereinafter “the instant mortgage”).

B. On December 28, 2006, the registration of ownership transfer was completed on the ground of purchase by consultation (1,711,638,330 won) with the Korean Housing Examination. The Korea Housing Corporation paid KRW 1,145,309,000 out of the above payment (hereinafter “the instant payment”) to BB Nonghyup for the repayment of the instant loan. The registration of ownership transfer of the instant real estate was cancelled on December 26, 2006.

C. The Defendant: (a) received the instant loan in the name of the Plaintiff; (b) received the payment of the amount equivalent to KRW 1,145,309,00 out of the above loan debt from the proceeds of the second real estate sale owned by leCC; (c) on December 3, 2007, the Defendant assessed the amount equivalent to the above amount as a donation from leCC; and (d) on December 3, 2007, imposed the Plaintiff a gift tax of KRW 361,631,618 (tax amount of KRW 286,123,60 + penalty tax of KRW 57,224,720 + penalty tax of KRW 18,283,293,298 (hereinafter “instant disposition”).

D. On July 3, 2009, the Plaintiff requested the Tax Tribunal to revoke the instant disposition. However, on September 22, 2009, the Plaintiff was dismissed on the ground that the period of appeal was elapsed.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, Eul evidence Nos. 1, 2, 5, 6, 7, 9 (including each number), and the purport of the whole pleadings

2. Determination on this safety defense

In this case, the plaintiff's petition is confirmed to be null and void of the disposition of this case, and the limitation of the time limit for appeal is not required for the litigation for confirmation of nullity, so the defendant's safety defense is without merit.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

The obligor, who received the instant loan from leCC as collateral for the second real estate, is an applicant for the instant loan. Therefore, the obligor is not the Plaintiff, but the person who received the repayment benefit equivalent to the instant repayment payment from the proceeds of the sale of the second real estate. Therefore, the instant disposition, premised on the premise that the said person is the Plaintiff, is the Plaintiff, and the defect is serious and apparent, and thus, is null and void.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) On November 30, 200, the Plaintiff respectively loaned KRW 399,00,000, and KRW 37,000,000 on March 31, 2004 from the BD Credit Union (hereinafter referred to as the “DD Credit Union”), and reached the remainder of the loan KRW 426,00,000 on September 7, 206.

2) On June 30, 200, 83,000, 10,000, 31 March 31, 2004, 10,000, and 100,000, and 100,000 on February 3, 2005, and 10,000,000 on December 19, 2005, respectively, were loaned from D Newcom on September 7, 2006.

3) On September 7, 2006, the Plaintiff and the Red AA made payment of KRW 719,00,000 for the instant loans to the Plaintiff and the Red AADD (i.e., KRW 426,00,000 + KRW 293,00,000). On October 10, 2006, the Plaintiff purchased KRW 6,611 square meters for the instant loans in the name of the Plaintiff for KRW 500,000,00 for KRW 6,611 square meters for the instant loans, and around September 11, 2006, the Plaintiff purchased KRW 50,000 in the name of the Plaintiff for KRW 353,20,000,00 in total.

4) On December 28, 2006, the registration of ownership transfer was completed due to purchase by consultation with the Korea National Housing Corporation (254,691,000 won). The Korea National Housing Corporation paid the total amount of the above price to BB Nonghyup as repayment for the instant loan.

5) On September 30, 2009, the Plaintiff filed a revocation lawsuit against the instant disposition (U.S. District Court 2009Guhap10964), but withdrawn on November 6, 2009.

[Reasons for Recognition] Each entry of Gap evidence Nos. 3, Eul evidence Nos. 3, 4, and 8 (including each number)

D. Determination

In order for a taxation disposition to be null and void as a matter of course, the mere fact that there is an illegality in the disposition is insufficient. The defect must be objectively clear and obvious, and it is necessary to examine the purpose, meaning, function, etc. of the laws and regulations which form the basis of the taxation disposition in a teleological context and to reasonably consider the specificity of the specific case itself at the same time. From this point of view, a taxation disposition on a person who does not have any legal relations or factual relations subject to taxation is grave and obvious, but if it can be found only after an accurate investigation into the factual basis as to any legal relations or factual relations which are not subject to taxation, it cannot be deemed apparent even if the defect is serious, and it cannot be said that the taxation disposition that misleads the facts of taxation is null and void as long as it is objectively clear and obvious, and if it is so long as such defect is merely a ground for revocation, it shall not be deemed that it does not change if it is determined differently, and it shall be determined by 200, 964, and it shall be determined by 960, without such determination method and determination.

In light of the Plaintiff’s major interest, including: (a) 1,145,309,000 won was used for the repayment of the instant loan; (b) 426,00,000 won with the Plaintiff’s repayment of debt to D New Credit; and (c) 5,00,000 won with the Plaintiff’s real estate purchase price; and (d) the relationship between the Plaintiff and the Plaintiff and YCC, it is deemed that leCC donated the amount equivalent to the instant repayment to the Plaintiff; and (c) even if not, the tax authority’s father and son did not have any objective reason to believe that the said donation existed between the Plaintiff and her father. Therefore, the instant disposition cannot be deemed as null and void as a matter of course.

Therefore, the plaintiff's assertion is without merit.

4. Conclusion

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