The evidence presented in the case where invalidity is asserted is insufficient to recognize that there is a serious and obvious defect in the taxation disposition. Thus, the taxation authority's disposition is legitimate.

The evidence presented in the case where invalidity is asserted alone is insufficient to recognize that there is a significant and apparent defect in the taxation disposition, and there is no other evidence to prove otherwise, the disposition by the taxation authority is legitimate.

Article 96 (1) of the Income Tax Act

2019Gudan52713 Revocation of Disposition of Imposing capital gains tax

DelegationO

Head of the Do Tax Office

June 12, 2019

July 17, 2019

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

On January 5, 2011, the Defendant confirmed that the imposition of capital gains tax of KRW 88,696,198 (including additional tax) for the Plaintiff was null and void.

1. Details of the disposition;

A. On February 2, 2001, the Plaintiff acquired 432-00 square meters (hereinafter “instant land”) of OO-dong OO-dong 432-00 square meters (hereinafter “O-dong 132 square meters”) through a successful bid in the auction process, and transferred the instant land on April 19, 2006 (hereinafter “instant transfer”).

B. As the Plaintiff did not report the transfer income tax on the transfer of this case, the Defendant: (a) determined the transfer value of the land of this case as KRW 280 million, which is the transaction value under the approval seal agreement of the transfer of this case; (b) determined the acquisition value as KRW 42.1 million, which is the sale price for the voluntary auction procedure; (c) notified the Plaintiff of the pre-announcement of taxation on November 29, 201; and (d) issued a disposition imposing capital gains tax of KRW 88,696,198 (including additional tax) for the Plaintiff on January 5, 201 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap evidence 1, 10 evidence, Eul evidence 1 to 5 (including each number if there is a serial number) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The actual transfer value of the transfer of this case is KRW 50 million, not more than KRW 280 million. Since the Plaintiff had a legal dispute with the owner and lessee of the building due to the unregistered building on the ground since the Plaintiff acquired the land of this case, and this led to the Plaintiff and the purchaser of the transfer of this case, the purchase price was set at KRW 50,000,000,000, which is less than the market price of neighboring land at the time of the transfer of this case. Accordingly, the disposition of this case is null and void since the Plaintiff did not obtain gains on transfer of the transfer of this case.

B. Determination

1) In order for an administrative disposition to be deemed null and void as a matter of course, the mere fact that there is an illegality in the disposition is insufficient, and its defect must be objectively obvious as it seriously violates the relevant laws and regulations (see Supreme Court Decision 2005Da24646, Nov. 15, 2007). Meanwhile, a tax disposition imposed on a person who does not have any factual relation, such as legal relation or income or act, which is subject to taxation, shall be deemed to have a significant and apparent defect. However, in a case where objective circumstances exist that make it possible to believe that a certain legal relation or fact that is not subject to taxation is subject to taxation, if it is apparent only after an accurate investigation of the factual relation, it cannot be deemed that the defect is apparent even if it is serious (see Supreme Court Decision 2001Du7268, Sept. 4, 2002).

In addition, in an administrative litigation claiming the invalidity of an administrative disposition and seeking the invalidity confirmation thereof, the Plaintiff is liable to assert and prove the grounds for invalidity of the disposition (Supreme Court Decision 2009Du3460 Decided May 13, 2010).

2) We examine the instant case in light of the aforementioned legal principles. In light of the following circumstances, the evidence presented by the Plaintiff alone is insufficient to acknowledge that there was a serious and apparent defect in the instant disposition, and there is no other evidence to acknowledge otherwise.

① On April 18, 2006, the time of the instant transfer, the Plaintiff reported the instant transfer to the head of OOO/O on April 18, 2006, and received a certificate of completion of the real estate transaction contract from the head of OO/O on the same day.

② As above, the sales contract attached when the Plaintiff reported a real estate transaction contract for the transfer of this case is presumed to have been prepared in accordance with the sales contract between the parties, barring any special circumstance (see, e.g., Supreme Court Decision 93Nu2353, Apr. 9, 1993). The actual transaction price of the transfer of this case stated in the certificate of completion of the above real estate transaction contract is KRW 280,000,000.

③ If the Plaintiff did not report the transfer income tax on the transfer of this case, the Defendant imposed the transfer income tax by regarding KRW 280 million as the transfer value based on the actual transaction price stated in the above real estate transaction contract completion certificate as the transfer price.

④ The actual transfer value of the transfer of this case claimed by the Plaintiff and the existence of gains on transfer by the transfer were revealed only when the facts are accurately examined.

⑤ Therefore, even if the Defendant did not properly examine the Plaintiff’s actual transfer value and necessary expenses even though the Plaintiff did not acquire transfer marginal profit from the transfer of this case as alleged by the Plaintiff, in light of the aforementioned various circumstances, the instant disposition cannot be said to be apparent that its defect is apparent.

3) The Plaintiff’s assertion is without merit, and the instant disposition cannot be deemed to be null and void as a matter of course.

3. Conclusion

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