Cho High Court Decision 2008Du3475 (Law No. 30, 2009)

If the registration of ownership transfer has been made on the register, the procedure and cause shall be deemed legitimate.

If the registration of transfer of ownership on the register of real estate has been made, the assertion that there is real acquisition value by the sale is not trustable by relevant evidence, unless the registration of transfer of ownership has been made due to the donation, because it is presumed that the procedure and cause are justified.

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

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 capital gains tax of KRW 60,49,110 for the Plaintiff on August 11, 2008 shall be revoked.

1. Details of the disposition;

A. On September 12, 1997, the registration of ownership transfer was made in the name of the Plaintiff on the ground of donation on April 20, 1997, with respect to the land of 11,504 square meters (hereinafter “instant land”) located in the name of the largestA, Gangwon-do Jung-gun, YABri 62-4, 22-4, 11,504 square meters (hereinafter “instant land”).

B. On September 7, 2007, the Plaintiff (hereinafter “instant transfer”) transferred the instant land to YY-gun at KRW 327,864,000 (hereinafter “instant transfer”). On January 28, 2007, the Plaintiff asserted that the Plaintiff purchased the instant land in KRW 20,000,000 to the Defendant and acquired it. On or around November 28, 2007, the Plaintiff reported and paid the transfer income tax at KRW 327,864,00 with the acquisition value and transfer value at KRW 20,000 based on the actual transaction value, based on the acquisition value and transfer value as the actual transaction value.

C. On August 11, 2008, the Defendant: (a) on the ground that the Plaintiff acquired the instant land by donation, not by sale; (b) calculated gains from transfer by considering the appraised value under Article 60(3) of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 20618, Feb. 22, 2008; hereinafter the same shall apply) pursuant to Article 97(1)1 of the Income Tax Act (amended by Act No. 8911, Mar. 21, 2008; hereinafter the same shall apply) and Article 163(9) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20618, Feb. 22, 2008; hereinafter the same shall apply) as acquisition value of the instant land; and (c) calculated gains from transfer by adding the wrongfully underreporting penalty tax to the capital gains tax for the reason that the Plaintiff underreporting the tax base by unjust means.

[Ground of recognition] Evidence No. 1, No. 5, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) The Plaintiff’s agent purchased the instant land in KRW 200 million, but could not obtain permission for the transaction of the instant land within the land transaction permission zone at the time of purchase. Thus, unlike actual circumstances, the Plaintiff’s donation of the instant land from the MinimumA on April 20, 1997, which was prior to the commencement date of land transaction permission, was merely the Plaintiff’s transfer of ownership on the instant land. However, the instant disposition of imposition of the instant land was unlawful on the premise that the Plaintiff acquired the instant land as donation, contrary to the fact, on the premise that the Defendant acquired the instant land as donation, on the premise that it was unlawful.

(2) Since the Plaintiff purchased the instant land in KRW 200 million from the largestA, it cannot be deemed that the Plaintiff underreporting the capital gains tax base by improper means, the Defendant’s failure to file a return calculated by applying an unfair underreporting additional tax rate to the principal tax of the instant capital gains tax is unlawful to impose the tax by adding the mountain.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) On September 9, 1997, the Plaintiff acquired the registration of transfer of ownership in the name of the Plaintiff on the instant land on April 20, 1997, with the approval seal affixed under the Act on Special Measures for the Registration of Real Estate from the Head of Jong-do Jong-gun on the Real Estate Donation Contract dated April 20, 1997, stating that the Plaintiff received the donation of the instant land from the LAA.

(2) On March 11, 200, the tax authority assessed the gift tax of this case as KRW 23,008,000 on the premise that the Plaintiff received a donation of this case from the leastA, and imposed a gift tax of KRW 2,91,040 on the said land. The Plaintiff paid the gift tax around March 31, 2003.

(3) On April 23, 1997, the Plaintiff asserted that the Plaintiff acquired the instant land from the Defendant side at the time of filing a tax base return of the transfer income tax, and submitted a receipt of the receipts in the name of 3D that the Plaintiff or his agent KimD received 200 million won for the purchase of the instant land from the Plaintiff on April 23, 1997, with the content that the purchase price was set at KRW 200 million.

(4) Meanwhile, the instant land was designated as a land transaction permission zone from April 22, 1997 to April 21, 1999.

[Reasons for Recognition] Nos. 3, 4-1 through 3, 2, 8-1, 2, and 4-1, 4-2, and the purport of the whole pleadings, without dispute between the parties;

D. Determination

(1) As to the Plaintiff’s assertion on acquisition value

In principle, the tax authority shall bear the burden of proving the facts that meet the requirements for taxation, such as the reason for taxation and the tax base, in a lawsuit seeking revocation of imposition. However, inasmuch as the registration of ownership transfer on the registry of real estate has been completed, the procedure for such revocation and the presumption that the justifiable cause are legitimate (see, e.g., Supreme Court Decision 2007Da91756, Mar. 27, 2008). As long as the registration of ownership transfer was completed on the gift of this case, the Plaintiff should prove that the acquisition value, which is the content of the return of transfer income tax of this case

According to the above, the plaintiff purchased the land of this case from the lowestA to avoid land transaction permission period, on April 20, 1997, which was the first day of the land transaction permission period. However, if the plaintiff actually acquired the land of this case before the first day of the land transaction permission period with the intention to avoid land transaction permission period after the purchase from the lowestA, there is no special circumstance that the cause of acquisition should be the donation. As to the fact that the plaintiff actually paid 200 million won to the largestA with the purchase price of the land of this case, there is no objective material such as financial material, and there is no possibility that the above receipts 200 million won were made after the fact that the plaintiff actually, the above receipts 3 of this case submitted by the plaintiff. Thus, it is difficult to acknowledge that the plaintiff's testimony of this case was made after the lack of evidence to acknowledge the acquisition price of the land of this case from the witness of this case.

(2) As to the Plaintiff’s assertion on unjust and minor penalty

As seen above, insofar as the registration of ownership transfer has been made on the register of real estate, it shall be presumed that the procedure and cause for response is justifiable. Considering the fact that the Plaintiff paid gift tax on the land of this case on the grounds that the Plaintiff was donated as the cause of acquisition on the registry of real estate, there was no objective data, such as financial data to recognize that the Plaintiff acquired the land of this case, and the submission period or submission procedure of the above sales contract, etc., barring any special circumstance, the Plaintiff acquired the land of this case as donation, and it is reasonable to presume that the Plaintiff made a false preparation of two copies, etc. in filing a return of

Therefore, the Plaintiff may be deemed to have underreported the transfer income tax base of this case by making false evidence or false documents under Article 27(2)2 of the Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 21316, Feb. 6, 2009). Thus, it is lawful to add the additional tax on negligent tax returns applying the amount of unfair underreporting under Article 47-3(2)1 of the Framework Act on National Taxes (amended by Act No. 9259, Dec. 26, 2008) to the additional tax on negligent tax returns applying the amount of unfair underreporting under Article 47-

(3) Ultimately, the instant disposition is lawful.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.