Whether a comprehensive income tax may be imposed where income from the transfer of one house for one household is recognized as business income.

Even if it is impossible to impose capital gains tax on the income accrued from the transfer of a house which falls under one house for one household, if the transfer is made periodically, continuously and repeatedly under the objective of business, and income generated from such transfer is recognized as business income, the comprehensive income tax may be imposed.

Article 5 subparagraphs 3 and 6 (i) of the Income Tax Act, Article 15 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12767 of August 1, 1989)

[Plaintiff-Appellant] Plaintiff 1 et al. (Law Firm Gyeong, Attorneys Lee Gyeong-soo et al., Counsel for plaintiff-appellant)

Kim Jong-sung et al.

Head of the Dong-gu Tax Office, other than one person

1. Disposition of imposition of gift tax of 19,400 won, 19,00 won, and 3,528,00 won, 33,484,530 won, and 5,735,290 won, respectively, on February 16, 1992, the imposition of gift tax of 18,30,300 won, 30, 320, 97, 97, 197, 30, 97, 197, 200, 30, 97, 97, and 90, 190, 200, 196, 30, 196, 196, 30, 200, 200, 89, 196, 30, 200, 197, 200, 197, 197, 297, 290, 197, 197, 3

2. All of the claims by the plaintiff Kim Jong-hwan are dismissed.

3. Of the costs of the lawsuit, the part arising between the Plaintiff Kim Jong-sung and the Head of Dong Daegu Tax Office is assessed against the Plaintiff Kim Jong-sung, while the part arising between the Plaintiff Kim Jong-sung and the Head of Dong Daegu Tax Office is assessed against the Plaintiff Kim Jong-sung. The part arising between the relationship between the Plaintiff Kim Jong-sung, the Gyeong-sung, and the head of Dong Daegu Tax Office is assessed against the Defendant Daegu Tax Office.

[Plaintiff Kim Jong-soo] The head of the tax office of Daegu District shall revoke on January 16, 1992 the value-added tax amount of 3,191,60 won for the second term of 86 years, 2,350,690 won for the first term of 87 years, 5,280,500 won for the second term of 87 years, 4,428,450 won for the second term of 87, 6,084,50 won for the second term of 88 years, 7,16,570 won for the second term of 88 years, 40, 97, 97, 94, 97, 97, 97, 94, 97, 97, 97, 94, 97, 97, 97, 95, and 98, 97, 94, 97, 1986 won for global income.

[Defendants] The plaintiffs: Paragraph (1) of this Article.

1. Details of taxation disposition

The following facts can be acknowledged by taking into account the following facts: (a) there is no dispute between some parties between them; (b) evidence Nos. 1, 2-1 through 24, 3, 4-1 through 6; and (c) the whole purport of the testimony and pleading of the stuffed witness; and (c) there is no other evidence to reverse it.

A. A. A person who works as a miscellaneous position in the general affairs of the Daegu Branch of the Bank of Korea and who is the head of a church in the village, Plaintiff Kim Jong-sung, as shown in the “Detailed Statement of Real Estate Transactions”, purchased ten lots of land between September 23, 1985 to September 10, 191, and newly constructed ten detached houses on each site. Of them, the remaining nine houses except for the houses listed in No. 10 of the above detailed statement were sold from February 24, 1986 to July 20, 190. Among them, in constructing the houses listed in No. 5 to 10 of the above detailed statement, the ownership transfer registration or ownership registration was made in the name of the above plaintiffs, as shown in the “Detailed Statement of Real Estate Transactions”.

B. In the process of being investigated by the Daegu Suwon Police Station on the suspicion of real estate speculation on September 191, 191, the above details of real estate transactions were known to the tax authority. As the defendant Daegu Police Station: (a) purchased ten lots of land and sold ten single houses on that lot for its business purpose; and (b) newly constructed 9 units of land among 10 units of housing constitutes a construction business provided in Article 33(2) of the Enforcement Decree of the Income Tax Act or a real estate sales business provided in subparagraph 3 of Article 36 of the Enforcement Decree of the Income Tax Act, i.e., the supply of goods subject to value-added tax; (c) 10 units of housing units of housing units of 10 units of housing units of 10 units of housing units of 10 units of 10 units of housing units of 20 units of housing units of 9 units of the Income Tax Act (hereinafter referred to as "housing units of housing units of each building and its appurtenant building") were omitted in the report and the payment of 19 units of the housing units of 1.

C. In calculating the tax amount based on the housing transaction details on the spot investigation, the head of the tax office at Dong Daegu District Tax Office shall consider the value of the building calculated in proportion to the value calculated according to the standard market price under the Local Tax Act among the total sale amount of housing pursuant to Article 48-2(3) of the Enforcement Decree of the Enforcement Decree because the sale value of the building and the site sale value is unclear. Under the relevant provisions of the Value-Added Tax Act, the value-added tax shall be calculated by each taxable period, such as the attached sheet of value-added tax (excluding the portion of supply of the housing indicated in subparagraph 1 of the real estate transaction for which the tax prescription has expired), and the Plaintiff Kim Jong-si failed to submit books and documentary evidence necessary for calculating the global income tax base, thereby determining the tax amount by the method of an estimated investigation pursuant to Article 120(1) of the Income Tax Act, Article 169(2)1 of the Enforcement Decree of the Income Tax Act, and the remaining amount of the housing sales income generated by the said Plaintiff’s sale of the housing for each taxable year after deducting the total amount of the housing from the sales income tax base.

D. Meanwhile, based on the fact that the actual owner of six houses indicated in the “title trust statement” and the registered titleholder are different, the Defendants: (a) deemed that, under Article 32-2(1) of the Inheritance Tax Act, the Plaintiff Kim Jong-Gyeong, who is the real owner, donated each of the above houses to their respective nominal owners on the date of completing the registration of ownership transfer or the registration of ownership preservation in the future regarding each of the above houses; and (b) accordingly, imposed and collected the gift tax calculated in accordance with the relevant provisions of the Inheritance Tax Act on each of the instant titles, as indicated in paragraph (1) of the disposition, and its defense tax on each of the instant houses.

2. Whether the instant taxation disposition is legitimate

A. A disposition on Plaintiff Kim Jong-hwan

(1) Plaintiff Kim Jong-soo, (1) worked in the general affairs of the Bank of Korea Daegu Branch and the general affairs of the Bank of Korea and sold 1 or 2 houses for the purpose of maintaining the livelihood of his family members and raising school expenses for their children, not newly building and selling them for the purpose of business, and as provided in Article 1(1) of the Enforcement Rule of the Value-Added Tax Act, the above Plaintiff Kim Jong-soo, even if he newly building 10 houses and sold 9 houses among 10 new houses, cannot be considered as the “person who supplies goods or services independently for business purposes” under Article 2(1) of the Value-Added Tax Act, although the above Plaintiff was deemed as a constructor or a real estate sales businessman, the above Defendant’s act of imposing value-added tax on the newly building and selling houses for the purpose of business purposes was unlawful, and the Defendant did not impose value-added tax on the newly building and selling houses for the purpose of business purposes, and even if it did not impose value-added tax on the newly building and selling houses for the purpose of Article 5 subparag. 15 of the Income Tax Act.

For this reason, the above defendant's global income tax and its defense tax are also alleged to be erroneous because the income accrued from it is regarded as business income and thus, the global income tax and its defense tax were imposed accordingly.

(2) Therefore, since the Plaintiff’s new construction of a new house was carried out as part of his business activities, it constitutes a supply of goods subject to taxation under the Value-Added Tax Act, and whether the income accrued from the sale of the real estate constitutes a sale of the real estate for the purpose of profit and whether it can be seen as a continuous sale of the real estate, and whether the transaction of the real estate was conducted repeatedly under ordinary social norms. Article 1 of the Enforcement Decree of the Value-Added Tax Act stipulates that the transaction of the real estate constitutes a sale of the real estate for the purpose of 10 years and 10 years, and that the amount of income generated from the sale of the newly constructed house for the purpose of 10 years and 9 years is below the number of sales under the above provision, it does not deny the feasibility of the transaction (see Supreme Court Decision 92Nu14526, Feb. 23, 193). The Plaintiff’s new construction of a new house for the purpose of 198 years and 29 years, as seen earlier.

B. A disposition on Plaintiff Kim Jong-chul, Hun-Hun, Gyeong-chul, Park Byung-hee, and Park Gyeong-man

(1) The legislative intent of Article 32-2(1) of the Inheritance Tax Act before and after the amendment by Act No. 4283 of December 31, 1990 is to prevent the abuse of the title trust system as a means of avoiding gift tax in the property requiring the transfer, exercise, etc. of rights. Thus, if the title trust is not for avoiding gift tax, but for the reason of statutory restrictions or other similar inevitable circumstances, it shall not be deemed a donation.

(2) In this case, in light of the facts that the above 6 houses were newly constructed in the name of the above son Kim Jong-chul's name with the aim of avoiding gift tax, the above 6 houses were owned by the plaintiff Kim Jong-chul, Kim Jong-chul's title trust, and the facts that the above 6 houses were owned by the above 6 houses under the name of the plaintiff Kim Jong-chul's title trust, the above 3 and 4-1 and the above 6-mentioned witness's testimony and arguments were newly constructed and sold to the employees of the Bank of Korea who were the head of the church, for the purpose of leading to the maintenance of their livelihood and the financing of their children's school expenses, and the above 6 houses were newly constructed in their own name and sold under the above 6 houses under the name of the above 6 plaintiff Kim Jong-chul's title trust, and the above 3 and 4-1 and the above 4-1 and the above 3-1 and the above 5-1 and the plaintiff Kim Jong-chul's remaining unfavorable measures should not be taken against the plaintiff Park's new position.

(3) Nevertheless, the Defendants deemed that Plaintiff Kim Jong-sung donated each of the above houses to the rest of the Plaintiffs and imposed gift tax on the rest of the Plaintiffs. Accordingly, the Defendants’ imposition of the gift tax and the tax defense tax on Plaintiff Kim Jong-chul, Hun-sung, the right constitutionality of the Plaintiff Kim Jong-sung, the secret number, the secret number, Park Jong-hee, and Park Gyeong-Gyeong was unlawful.

3. Conclusion

Therefore, the claim of this case by the plaintiff Kim Jong-sung, seeking the revocation of the imposition of the above value-added tax, global income tax, and their defense tax against the plaintiff Kim Jong-sung, is dismissed as it is without merit. The defendant Dong Daegu District Tax Office's imposition of each of the above gift tax and their defense tax against the plaintiff Kim Jong-chul, Kim Jong-sung and the claim of this case of this case of the plaintiff Kim Jong-chul, Kim Jong-sung, Kim Jong-sung, Kim Jong-sung, Kim Jong-sung, Kim Jong-chul, Park Jong-k, and Park Jong-k, which sought the revocation of the imposition of the above value-added tax, global income tax, and their defense tax, and the judgment is delivered with the disposition of this case with the burden of the losing party.

[Attachment]

Judges Lee Dong-sik (Presiding Judge)