(a) Method of calculating gains on transfer where data which can recognize the actual transaction values are submitted in imposing transfer income tax under the former Income Tax Act (Act No. 3271, Dec. 13, 1980);

(b) The time limit of submission of data attesting the actual transaction price in an appeal litigation disputing a disposition of capital gains tax;

A. The purport of Articles 23(4) and 45(1)1 of the former Income Tax Act and Article 170(3) of the Enforcement Decree of the same Act (Presidential Decree No. 10120, Dec. 31, 1980) is that in calculating transfer margin, transfer value and acquisition value are based on the actual transaction value, if a taxpayer fails to make a preliminary return on transfer margin or a final return on tax base, it can be determined based on the standard market price on the presumption that the actual transaction value is unclear once the actual transaction value is determined based on the standard market price in the calculation of transfer margin. Thus, in a case where the data that can be recognized as the actual transaction value is submitted, it shall be based on the actual transaction value, and

B. In an administrative litigation disputing the illegality of taxation, the parties concerned may submit arguments and evidence supporting the objective amount of tax liability until the closing of argument, so even in an appeal litigation disputing the disposition of capital gains tax, the evidence proving the actual transaction price may be submitted until the closing of argument.

A. Articles 23 and 45 of the former Income Tax Act (Act No. 3271, Dec. 13, 1980); Article 170 of the former Enforcement Decree of the Income Tax Act (Presidential Decree No. 10120, Dec. 31, 1980); Article 14 of the Administrative Litigation Act; Article 136 of the Civil Procedure Act

A. (b) Supreme Court Decision 84Nu394 delivered on October 23, 1984; 83Nu553 delivered on December 27, 1983; b. 84Nu106 delivered on September 25, 1984; 84Nu356 delivered on November 13, 1984

Plaintiff

Head of Ansan Tax Office

Seoul High Court Decision 83Gu928 delivered on May 3, 1984

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. According to the reasoning of the judgment below, the court below acknowledged the fact that the plaintiff purchased the site and the building in this case from the non-party 1 on February 27, 1980 and transferred the site and the building in this case to the non-party 2 on January 4, 1982, the non-party 2 did not make a final return on the transfer income or the final return on the transfer income under the Income Tax Act even though the plaintiff transferred the site and the building in this case to the non-party 2 on January 4, 1982. In addition, if each provision of Article 23, 45, and Article 95 of the Income Tax Act and Article 170 of the Enforcement Decree of the Income Tax Act are gathered at the time of transfer, the acquisition value and the transfer value are based on the actual transaction value, or if the transfer income or the final return on the transfer income under the Income Tax Act are not made on the basis of the standard market price, the court below held that the disposition of imposition of the transfer income tax in this case and the defense tax are legitimate.

2. However, according to the provisions of Articles 23(4) and 45(1)1 of the Income Tax Act (Act No. 3271, Dec. 13, 1980) at the time of the transfer of the site and building of this case, the transfer price and acquisition price shall be based on the actual transaction price, and if determined by the Presidential Decree, they shall be based on the standard market price at the time of the transfer or acquisition of the assets. According to Article 170(3) of the Enforcement Decree of the same Act (Presidential Decree No. 10120, Dec. 31, 1980) Article 95 or 100 of the Act, the transfer price and acquisition price shall be determined based on the standard market price if the taxpayer fails to make a preliminary return on transfer or final return on tax base; see, e.g., Supreme Court Decision 30Nu1848, Mar. 19, 198; 200Nu48484, Mar. 19, 20198.

Although the court below's decision is reasonable in light of the legal principles as to calculation of transfer marginal profit under the Income Tax Act, and the decision of the court below is justified, since the plaintiff confirmed the actual transaction price after acquiring and transferring the land and building in this case, and considered the transfer marginal profit amount to KRW 1,744,672 based on the standard market price.

3. Therefore, the judgment of the court below is reversed, and the case is remanded to the Seoul High Court. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Young-ju (Presiding Justice)