Whether expenses incurred in purchasing and removing an unauthorized building constructed without permission in order to transfer the land and perform the duty of delivery constitute necessary expenses.

If a landowner has disbursed expenses for the purchase and removal of an unauthorized building which was illegally constructed on the land in order to perform the duty of delivery in the course of transferring the land, barring special circumstances, such expenses constitute transfer expenses under Article 45(1)4 of the Income Tax Act and Article 94(4) of the Enforcement Decree of the Income Tax Act, unless the purchaser agreed to assume the responsibility of removal and agreed to set the sale price. In particular, the expenses for removal should be deemed as the expenses for removal for the convenience of land use under Article 45(1)2 of the Income Tax Act (amended by Act No. 4661 of Dec. 31, 1993), Article 94(2)4 of the Enforcement Decree of the Income Tax Act, and Article 47(1)2 of the Enforcement Decree of the same Act, which are paid for the convenience of land use under Article 47(1)2 of the Enforcement Decree of the same Act, and the expenses for removal shall not be deemed as the expenses for the removal of the building without permission only for the purpose of using the land from the beginning.

Article 45 (1) 4 of the Income Tax Act, Article 45 (1) 2 of the former Income Tax Act (amended by Act No. 4661 of December 31, 1993), Articles 94 (2) 4 and 94 (4) of the Enforcement Decree of the Income Tax Act, Article 47 (1) 2 of the Enforcement Rule of the same Act

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

Attorney Lee Jae-soo, Counsel for plaintiff-appellant

Head of North Busan District Tax Office

Busan High Court Decision 91Gu3048 delivered on September 30, 1992

The part of the judgment below against the plaintiff is reversed, and that part of the case is remanded to Busan High Court.

We examine the grounds of appeal.

1. On the first ground for appeal

The court below rejected the plaintiff's assertion that the plaintiff et al. spent gold 6,00,000 won as expenses for the suspension of the land of this case on the grounds that it is difficult to believe and there is no other evidence to acknowledge it on the grounds as stated in its reasoning, and therefore, the above suspension work expenses should be deducted as expenses for the calculation of gains from transfer. In light of the records, the above measures of the court below are just and acceptable, and there is no error of law of misconception of facts due to incomplete deliberation or violation of the rules of evidence, such as the theory of lawsuit, and there is no ground to discuss

2. On the second ground for appeal

According to the reasoning of the judgment below, the court below rejected the Plaintiff’s assertion that the Plaintiff should deduct the Plaintiff’s expenditure from the necessary expenses in calculating gains from transfer among the total amount of KRW 14,00,000 paid to the Nonparty, etc. during the period from June 10, 1988 to June 17, 1988, in order to carry out the duty of delivery when the Plaintiff, etc. transferred the land of this case to the Non-Party Cho Young Bank on June 21, 1988, in order to perform the duty of delivery, the Plaintiff purchased and removed the land of this case from the first time to the non-party Cho Young Bank for the purpose of discharging the duty of delivery of the transferred land, not only acquired the land together with the land for the purpose of using only the Plaintiff’s acquisition of the land of this case, but also the Plaintiff’s purchase and sale price of the land of this case without permission by illegally occupying the land of this case from the above non-party 1,000 and the Plaintiff’s non-party 16, who purchased the land.

However, if a landowner spent expenses for the purchase and removal of an unauthorized building illegally constructed without any relation to his/her own will in order to perform the duty of delivery while transferring the land, such expenses constitute transfer expenses under Article 45(1)4 of the Income Tax Act and Article 94(4) of the Enforcement Decree of the same Act, barring special circumstances, such as where the purchaser agreed to assume the responsibility of removal and set the sale price, and in particular, the expenses for removal constitute the transfer expenses under Article 45(1)2 of the Income Tax Act, Article 94(2)4 of the Enforcement Decree of the same Act, Article 47(1)2 of the Enforcement Decree of the same Act, and Article 47(1)2 of the Enforcement Rule of the same Act, which are paid for the convenience of land use under Article 45(1)2 of the Income Tax Act, and the expenses for removal or improvement shall not be included in the necessary expenses only if an unauthorized building was acquired with the land for

Although the court below acknowledged that the plaintiff purchased and removed the above unauthorized buildings with the cost of carrying out the duty of delivery of the land in this case, it was erroneous in the misapprehension of legal principles as to the necessary expenses of capital gains or failing to properly satisfy the reasons. The grounds for appeal pointing this out are with merit.

3. Therefore, the part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the lower court for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yoon Young-young (Presiding Justice)