Criteria for determining whether real estate is business income or capital gains;

The Plaintiff’s head and title holder are not capable of acquiring land or operating real estate development business, and the acquisition fund was raised by the Plaintiff and transfer margin was used by the Plaintiff, and thus, deemed to have been actually owned by the Plaintiff. Since the Plaintiff continues to engage in real estate sale and development business from the past, it constitutes real estate sale business.

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

Article 14 (Real Taxation under Framework Act on National Taxes)

Article 19 (Business Income)

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 147,693,00 as gift tax for the year 2002 on December 9, 2004 and KRW 1,967,481,180 as global income tax for the year 2001 on January 3, 2005 shall be revoked, respectively.

1. Details of the instant disposition

A. Reasons for imposing gift tax of this case

(1) On May 2, 2001, ○ Development Co., Ltd. (hereinafter “○○ Development”) entered into a sales agency contract for an apartment complex with ○○○○○○○ M&D Co., Ltd. (hereinafter “○○○○○○ M&D”) on behalf of the sales agency (at least 30%, officetels shall be 2.5% of the total sales amount, and commercial buildings shall be 5% of the total sales amount).

(2) On June 5, 2002, ○○ Development transferred some of 551,650,000 won of the sales agency fees under the said sales agency contract to ○○○○○○○ Branch Account from a single-dong branch account in the name of the National Bank of Korea to ○○○○○○○○○○○ Branch Account. On the same day, ○○○○ M&D accounted for KRW 340,000,000 as the provisional payment, and transferred KRW 213,00,000 as the provisional payment, to ○○○○○○ Branch Account in the name of ○○○○○○○○○○○○ Branch Account.

(3) From April 20, 2004 to October 29, 2004, the director of the Seoul Regional Tax Office confirmed the above facts as a result of conducting an in-depth examination of ○ Development, etc., and again remitted the above KRW 551,650,000 deposited into the account in the name of ○○○○○○○○○ bank account.

(3) From April 20, 2004 to October 29, 2004, the director of the Seoul Regional Tax Office confirmed the above facts as a result of an in-depth investigation into ○ Development, etc., and confirmed that the above 51,650,000 won deposited in the account in the name of ○○○○○○○’s name was actually donated to the Plaintiff as the actual owner of ○○ Development’s sales agency contract, and notified the Defendant of the above facts.

(4) Accordingly, on December 9, 2004, the Defendant decided and notified the Plaintiff of KRW 147,693,000 of the gift tax for the year 2002 (hereinafter the instant disposition of gift tax) (hereinafter the instant disposition of gift tax)

B. Details of the instant disposition imposing global income tax

(1) On June 23, 200, 2000, Na○○○○○○-dong 7, 33967, around 99 another branch court of Seoul District Court, awarded a bid of KRW 4,210,00,01,00 for a total of KRW 1,544 square meters for a site of KRW 94-68, 2,743, and 94-69, and for a total of KRW 4,210,00,00 for a real estate auction case of real estate rental (hereinafter “instant land”). On August 18, 200, 200, the ownership transfer registration (Na○○-dong 9/10, and KRW 1/100) was made accordingly.

(2) In order to newly construct and sell housing on the ground of the instant land, ○○○○○ Investment registered as a joint business proprietor on July 20, 200, but on September 6, 2001, 200, ○○○○ Construction Co., Ltd. transferred the instant land to ○○○ Construction Co., Ltd. (hereinafter referred to as KRW 7,800,000,000). On September 6, 2001, 2000 reported the gains on transfer of assets calculated according to the standard market price on September 6, 200, 200 reported the gains on transfer of assets on September 19, 201.

(3) On the other hand, the director of the Seoul Regional Tax Office decided that the person who actually acquired and transferred the instant land from April 21, 2004 to October 26, 2004 and the actual business operator of the said ○○○D Entertainment was the Plaintiff, and that the Na○○ and Seo-gu was merely the lending of the name. In light of the Plaintiff’s real estate transaction size and frequency, etc., the Defendant notified the Defendant on the ground that the instant land transfer constituted real estate sales business.

(4) Accordingly, on January 3, 2005, the Defendant decided and notified the Plaintiff of the global income tax of KRW 1,967,481,180 (hereinafter “instant global income tax disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1-1 to Gap evidence 2-2, Eul evidence 1-2, Eul evidence 2-1, 2, 3, Eul evidence 3-4 through 7, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Disposition of gift tax of this case

The above KRW 551,650,000, which ○○○○○○○, remitted to the literature○○○○○○○, was merely a receipt of the money that ○○○○○, a representative director of ○○○ Development, personally borrowed from Kim○○, on behalf of ○○○○○, and there is no ground to deem this as having been donated to the Plaintiff. Therefore, the instant gift

(2) The instant global income tax disposition

The instant land was acquired by Na○○ and Seo-gu using their own funds and loans from financial institutions, and there is no relationship with the Plaintiff, and even if the Plaintiff is the actual owner of the instant land, there is no fact that the Plaintiff continuously and repeatedly sold real estate for business purposes other than the transfer of the instant land, and thus, the instant global income tax disposition that deemed transfer margin as the Plaintiff’s business income is unlawful.

(b) Related statutes;

(c) Fact of recognition;

(1) From February 1994 to May 12, 1998, Plaintiff Na○○ was working as the president of ○○ Group and was responsible for overall management and supervision of the business affairs of ○○ Group’s affiliates. As of May 12, 1998, ○○ Group’s insolvent debt amounting to 3,48.8 billion won as of the end of December 2003, 200, and 3.8 billion won in total, including corporate tax, value-added tax, securities transaction tax, capital gains tax, etc., imposed on the Plaintiff individual as of November 10, 2004. The ○○○ Development was a company established on June 11, 1999, which was 1,500,000,000 won after the ○○○○ Group’s bankruptcy, and all officers and employees at the time of its establishment were owned by ○○○○ Group’s company’s account and employees, etc., ○○○○ Family Construction, etc.

(2) Meanwhile, on June 5, 2002, ○○○○○○○ Branch Account in the name of ○○○○○○○○○○ Branch Account in the name of ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○, which was part of the sales agency fees, from ○○○○○○○○○○○○○○ Development, was returned again from June 5, 2002. Of the said money, KRW 486,45,000 out of the said money was transferred to ○○○○○○ Branch Account in the name of ○○○○○○○○○○○○ on the same day, and on June 21, 2002, said KRW 480,000,000 was transferred to ○○○ Branch Account in the name of ○○○○○ Branch Account in the name of ○○○○○○.

(3) On the other hand, KRW 6,455,00 in the balance remaining in the account of ○○○○○ branch in the above gate-type name of the National Bank on July 31, 2002, deposited 65,195,000 in the account of ○○ branch in the name of ○○ branch in the name of ○○○ branch in the Plaintiff’s visa on July 31, 2002, and KRW 65,195,000 in the account of ○○ branch in the name of ○○ branch in one bank on June 5, 2002, deposited into the account of ○○ branch in the name of ○○ branch in the name of ○○ branch in the name of ○○ branch in the name of ○○ branch in the name of ○○ branch in the name of ○○ branch in the name of ○○ branch in the name of ○ branch in the name of ○ branch in the name of ○○ branch in the name of ○ branch in the name of ○ branch (hereinafter).

(4) At the time of the National Tax Service’s investigation, ○○○ M&D representative Kim deliberation stated that KRW 51,650,000,000, either personally lent to ○○○○○ KRW 490,000 (this rate is 3% a year, 1 year a lending period), and KRW 70,000,00 (1 year a year a year a year a lending period) to ○○○○○, by means of a written confirmation from August 5, 2004. In fact, ○○○ did not have received interest under the above agreement from ○○ or Kim○○, and even though the agreed lending period had already expired, there was no demand for payment or extension of the lending period.

(5) Meanwhile, on June 23, 200, 200, Na○○ and Seo-gu Branch acquired the instant land at a voluntary auction of KRW 4,210,00,000 from Southern Branch of the Seoul District Court. On June 21, 2000, 200, an acquiring employee deposited KRW 300,000 from the foreign exchange bank ○○○ Branch of the company related to the Plaintiff at ○○○ Branch of the foreign exchange bank under the name of Na○○○○○ Branch of the company related to the Plaintiff at KRW 30,00,000 from the account of Na○○ Branch of the ○○○ Branch of the ○○○ Branch of the ○○○ Branch of the Na○○ Branch. The Plaintiff-dong Kim Jong branch deposited KRW 100,00,000 in the account under the name of ○○ Branch on June 22, 200, 200, 4300 and 9 of the instant real property as its ownership deposit.

(6) The plaintiff and ○○○ graduate School operator were only a friendship-friendly relationship with the plaintiff, and on July 16, 2004, at the time of investigation by the National Tax Service, the deposit of KRW 100 million was made to the account of Na○ and ○○○, respectively, in order to create the source of Na○○ Fund upon the plaintiff's request, and immediately recovered.

(7) The ○○○ is the Plaintiff’s head of the household, who was born on December 10, 1975. At the time of the acquisition of the instant land, 25 years of age from the side, there was little experience in construction business operation. Since marriage on February 1, 2002, marriage, October 16, 2003, second birth, and pregnancy, etc., it is currently in a usual family group without carrying on business or business operation. In addition, ○○○○ branch, a ○○ branch of the Plaintiff’s highest graduate school management group, was a business-friendly group, and ○○ branch of the Plaintiff’s ○○ branch of the graduate school management group, left Canadian permanently on May 29, 201. Even around the time of transfer of the instant land to ○○○ branch of the Plaintiff, there was no sufficient time for the transfer of the instant land during the actual process of transfer, such as departure on May 29, 2001 and entry on September 5, 2001.

(8) On the other hand, from 202.12 to 2004.11, the Plaintiff purchased the above 400 square meters of land from 200,000,000 70,000 20,000 70,000 20,000,000 1,000 70,000 20,000,000 1,000 70,000,000,000 1,000,000 20,000,000 20,000,000 1,000,000,000 1,000,000,000 1,00,00,000 20,000,00,000 20,00,00,00,00,000.

[Ground of recognition] Eul evidence 3-3, 8-22, Eul evidence 5-1 through Eul evidence 7-121, Eul evidence 8-1 through 21, 25, Eul evidence 11-1 through 13-5, and the purport of the whole pleadings

D. Determination

(1) Determination on the disposition of gift tax of this case

(A) As shown in the above facts, the Plaintiff, who was the president of the ○○○ Group, was in bankruptcy, operated a large number of business enterprises by lending the name of children and former executives and employees of the ○○○○ Group in the circumstance of enormous debts and delinquent tax. ○○ Development and ○○ Development, a company established with the former executives and employees of the ○○○○ Group immediately after the ○○○○○ Group’s default, appears to be the Plaintiff in fact. ○○○○○ND was used for the above ○○○ Development’s capital increase and the operating fund of the ○○○○○○ Development. During that process, it appears that the Plaintiff, who was the president of the ○○○○○○○○○○○○○○○○○○○○○ Group, was in charge of tracking the above money, and it was sufficiently and individually lent to the ○○○○○○○○○○○○○○ Group, but there was no evidence that the said money was paid to the Plaintiff for the payment of the said money to the Plaintiff.

(B) Therefore, this part of the Plaintiff’s assertion is without merit.

(2) Determination on the instant global income tax disposition

(A) As shown in the above facts, ○○○ is the mother and female of the Plaintiff as shown in the above facts, which is closely related to the Plaintiff as the Plaintiff’s friendship, and in fact, Na○○ or Seo-gu does not have the ability or situation to buy the instant land or to operate ○○○D Investment, and the Plaintiff appears to have actually raised funds relating to the purchase of the instant land. The transfer margin of the instant land was also used by the Plaintiff as ○○ Construction, the actual owner, and the transfer margin of the instant land was also used as the funds for ○○ Construction, the actual owner, and the transfer margin of the instant land was also used by the Plaintiff as the funds for ○○ Construction, the actual owner, the instant land appears to have actually been owned by the Plaintiff, and it is sufficient to view that Na○○ and Seo-gu, Seo

(B) On the other hand, whether the income from the transfer of real estate is business income or capital gains under the Income Tax Act shall be determined according to social norms by taking into account the transferor’s acquisition and holding of real estate, the scale and frequency of the transfer, the mode, the other party, etc. of the transfer, as well as the continuity and repetition of the degree to be seen as business activities. As seen in the above facts, the Plaintiff, as the president of the ○○ Group, has been engaged in real estate development business, etc. from the past as the president of the ○○ Group, was actually engaged in real estate development business, etc., even after the ○○ Group’s failure to pay ○○ Group, and was continuously and repeatedly engaged in real estate sales and development business. Therefore, in light of the above circumstances, the Plaintiff’s land transfer act of this case is objectively deemed as the purpose of business, and its continuity and reflects should also be recognized.

(C) Therefore, the Defendant’s disposition of global income tax on the instant case, which deemed that the instant land was owned by the Plaintiff and its transfer constituted real estate sales business, is lawful, and the Plaintiff’s assertion is without merit.

Conclusion

Therefore, all of the plaintiff's claims are without merit, and they are dismissed. It is so decided as per Disposition.