Suwon District Court 2007Guhap3836 ( April 28, 2009)

National High Court Decision 2006Du1875 (207.05)

The propriety of any disposition taken on the part of a related party or the transfer of listed shares into the final market price by an improper act

Since shares and equity shares of a stock-listed corporation are deemed to be the market price of the Korea Securities and Futures Exchange every two months before and after the base date of appraisal, it is reasonable to apply the denial of wrongful calculation by considering the difference between the market price reported and the market price in transactions with a person with a special relationship as the under-reported amount.

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

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition of capital gains tax of KRW 1,387,727,610 against the plaintiff on December 15, 2005 by the defendant shall be revoked.

The court's reasoning for this case is that Article 60 (3) of the former Inheritance Tax and Gift Tax Act provides that where it is difficult to calculate the market price in the application of the provisions of Article 60 (1) of the former Inheritance Tax and Gift Tax Act, it shall be based on the appraised value in accordance with the provisions of Articles 61 through 65 in consideration of the type, size, transaction situation, etc. of the relevant property, and Article 60 (1) (the latter part of Article 60 (1) of the former Inheritance Tax and Gift Tax Act and Article 63 (1) 1 of the latter part of Article 60 (2) of the former Inheritance Tax and Gift Tax Act shall not be interpreted as a supplementary evaluation method applicable to cases where it is difficult to calculate the market price under the provisions of Article 60 (1) (Ga) of the former Inheritance Tax and Gift Tax Act and Article 63 (1) 1 (Ga) of the latter part of Article 63 (2) of the former Inheritance Tax and Gift Tax Act, and thus it is difficult to interpret this case's 20 (20) and 7) of the latter.

Therefore, the judgment of the court of first instance is legitimate, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.