Early High Court Decision 2010J266 (No. 12, 2011)

The application of conversion values is legitimate because it is not possible to verify the actual acquisition value of a building.

Since it is difficult to believe that the construction cost has been calculated accurately or actually paid according to the unit cost of construction works entered in the construction contract entered into with a non-registered business operator, it is difficult to believe that the construction cost has been paid or that it was not submitted at all objective financial data, the conversion price applied is lawful.

Article 97 of the Income Tax Act

2011Guhap12239 Disposition of revocation of imposition of capital gains tax

KimA

port of origin

June 22, 2012

July 6, 2012

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 000 for the year 2008 against the Plaintiff on December 16, 2009, which exceeds KRW 000,000, shall be revoked.

1. Details of the disposition;

A. On September 11, 2002, the Plaintiff acquired a multi-family house with a reinforced concrete structure structure (hereinafter referred to as “instant building”) on the third underground floor above 524.52 square meters in total on that ground after newly constructing a new apartment house with a total floor area of 524.52 square meters on that ground (hereinafter referred to as “instant building,” and “the instant real estate combined with the instant land”) and completed the registration of initial ownership on May 15, 2003.

B. On September 25, 2008, the Plaintiff transferred the instant real estate to the KimCC, and the next DD to KRW 000, and filed a preliminary return of capital gains tax on November 8, 2008 with the Defendant at KRW 000 and necessary expenses at KRW 000, and paid KRW 000.

C. On December 16, 2009, the Defendant deemed that it is impossible to confirm the actual transaction price at the time of acquiring the instant real estate, and thus, revised and notified the Plaintiff of KRW 000 (including additional tax) of the transfer income tax for the year 2008 (hereinafter referred to as the “previous disposition of this case”) by deeming the conversion price under Article 97(1) Item (b) of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009; hereinafter the same shall apply) as the acquisition price.

D. On June 24, 2010, the Plaintiff dissatisfied with the request and filed a request with the Tax Tribunal on March 10, 2010, and on July 12, 2011, the Tax Tribunal rendered a partial award to the effect that the actual transaction price confirmed in the instant land should be recognized as acquisition price. Accordingly, around July 22, 2011, the Defendant recognized the cost incurred in acquiring the instant land as KRW 000 (acquisition 00, registration tax and 000, brokerage cost, and 000) and corrected the transfer income tax of KRW 00,000, which was imposed in the instant previous disposition, and notified the Plaintiff thereof (hereinafter “instant disposition”).

[Reasons for Recognition] The facts without dispute, Gap evidence 1, Eul evidence 1, Eul evidence 1, Eul evidence 2, Eul evidence 2, Eul evidence 2-1 through 4, Eul evidence 3, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff, while constructing the instant building, spent the construction cost of KRW 00, KRW 000, KRW 000, KRW 000, and KRW 000, and KRW 100,000, and the actual acquisition value of the instant building is the actual transaction value objectively confirmed by all evidence. Furthermore, as long as the Plaintiff could recognize the real acquisition value of the instant building, the total of KRW 000 and KRW 000,00, paid by the Plaintiff at the time of the transfer of the instant real estate and KRW 00,00,00, should be deducted from the tax base of capital gains tax. Accordingly, the instant disposition made on a different premise is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Article 97 (1) 1 of the former Income Tax Act provides that "in the calculation of gains from transfer of a resident, the acquisition value, which is necessary expenses to be deducted from the transfer value, shall, in principle, be based on the actual transaction value required for acquisition, and where it is impossible to confirm the actual transaction value at the time of acquisition, it shall be based on the transaction example, appraisal value or conversion value prescribed by Presidential Decree, and where it is not possible to confirm the actual transaction value at the time of acquisition, and Articles 163 (12) and 176-2 (2) 2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010), "the converted value, which is the basis for calculating the transfer income tax, means the amount calculated by dividing the actual transaction value at the time of transfer, and the amount calculated by the standard market value at the time of acquisition by the standard market value at the time of transfer." In addition, "the actual transaction value of the relevant asset, which serves as a basis for calculating the transfer income tax amount, means the amount received as a sales contract or other evidence (see.

(2) Based on the above legal principles, it is recognized that the Plaintiff entered into a new construction contract of the instant building with the new FF that the Plaintiff had engaged in the construction business under the trade name of EE on September 10, 2002 (the balcony part) at KRW 00 (1/2), while new construction contract of the instant building was concluded with the lessee, it is difficult to recognize that the new construction contract of the instant building was not made for the Plaintiff to easily receive the lease deposit directly from the lessee because the new construction contract of the instant building was based on the evidence Nos. 3, 9-1 through 3, 10-1, 10, 11, 14, and 14, and testimony of new witness F. However, according to the evidence No. 4, it is difficult to recognize that the Plaintiff had paid the new construction contract of the instant building with the new FF that the Plaintiff had not easily claimed the cost of the construction, including the cost of new construction, for reasons that the new construction contract had not been made due to the Plaintiff’s business closure or new construction work without any reasonable basis.

(3) Therefore, since the acquisition value of the building of this case constitutes cases where it cannot be objectively recognized or confirmed, the disposition of this case, which calculated capital gains tax on the basis of the conversion amount under the Income Tax Act and subordinate statutes, as acquisition value of the building of this case, is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.