Income accruing from substituted land of farmland subject to non-taxable income under subparagraph 6 (j) of Article 5 of the Income Tax Act;

According to Article 5 (6) (j) of the Income Tax Act and Article 14 (7) of the Enforcement Decree of the same Act, in case where farmland is cultivated and transferred within one year, and another farmland is acquired in excess of the previous land area, the farmland shall be considered as substitute land for the purpose of cultivation unless there are other special circumstances, and the capital gains shall be exempted.

Article 5 (j) of the Income Tax Act, Article 14 (7) of the Enforcement Decree of the Income Tax Act

[Judgment of the court below]

Head of Suwon Tax Office

Seoul High Court Decision 86Gu709 delivered on July 7, 1987

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal are examined.

Article 5 of the Income Tax Act which provides for non-taxable income shall provide that “income accruing from substitute land for farmland falling under such cases as prescribed by the Presidential Decree” in subparagraph 6 (j) of the same Article shall not be imposed, and the term “cases as prescribed by the Presidential Decree” in Article 14 (7) through subparagraph 6 (j) of the Enforcement Decree of the same Act means cases where the requirements falling under any of the following subparagraphs are met in respect of farmland exchanged for cultivation:

1. When another farmland has been acquired within one year from the date of transfer of the previous farmland: Provided, That in case where another farmland has been acquired before the previous farmland was transferred, it shall be limited to the time when the previous farmland has been transferred within one year from the date of acquisition

2. Since the area of farmland to be newly acquired is not less than the area of farmland to be transferred, or the value thereof is not less than a half of the value of farmland to be transferred, if a farmland is cultivated and another farmland exceeding the area of the previous land is acquired within one year, it shall be considered to substitute land for farmland for the purpose of cultivation unless there are other special circumstances, and the capital gains shall be exempted.

According to the reasoning of the judgment below, the court below acknowledged the fact that the land of this case [168 square meters prior to the Gyeonggi-do (No. 1 omitted) had been cultivated as farmland since the purchase of the land on December 197 by the plaintiff, which was cultivated directly by cultivating vegetables and bean as farmland, and had Nonparty 1 cultivate it from the year 1980, and transferred it to Nonparty 2 on July 1983, 1983, and that it was necessary for cultivation, such as expanding the land for farming, etc., and that it acquired the land (No. 2 omitted) in the holding that it was farmland on October 10 of the same year [No. 840 square meters from the Gyeonggi-gun-gun (No. 2 omitted)]. The plaintiff's income from the transfer of land of this case by the transfer of the land of this case shall be exempted from taxation under

In light of the records, the above fact-finding and judgment of the court below are justified, and there is no error of law by misunderstanding the rules of evidence or misunderstanding the legal principles on the non-taxable income, such as the theory of lawsuit. The arguments are therefore groundless.

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Man-hee (Presiding Justice)