Busan District Court 2014Guhap21586 ( October 13, 2015)

Expenses incurred in relation to the occupancy of a lessee shall not be deemed capital expenditure.

(as with the judgment of the court of first instance) that did not reflect the inflation rate and the amount of expenditure claimed by the plaintiff in calculating capital gains is legitimate.

Article 97 (Calculation of Necessary Expenses for Transfer Income)

2015Nu20718 Revocation of Disposition of Imposing capital gains tax

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Head of △ District Office

Busan District Court Decision 2014Guhap21586 Decided December 13, 2015

oly 2015.18

o October 02, 2015

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition of capital gains tax of KRW 2,773,480 against the Plaintiff on December 10, 2013 shall be revoked.

1. Details of the disposition;

A. On September 3, 1992, the Plaintiff: (a) sold the instant real estate at KRW 86,00,00 on April 22, 201 to the △△△△△△△ and the instant real estate at KRW 41,60,00 and completed the registration of ownership transfer; (b) on December 10, 201, the Plaintiff purchased the instant real estate at KRW 86,00,00 and completed the registration of ownership transfer on April 16, 201; and (c) completed the registration of ownership transfer each of 1/2 shares in the instant real estate at KRW 1/40 on June 16, 201; (d) “The Plaintiff did not report the transfer income tax on the instant real estate at KRW 86,00,000,000,000 to the Plaintiff; and (e) the Plaintiff was subject to a disposition of KRW 140,70,000,000; and (e) the Plaintiff was subject to a disposition of KRW 181.4.7.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Around July 192, 192, the Plaintiff spent at least KRW 65 million in total to transfer the instant real estate, the delivery order of the instant real estate, the repair work of the instant real estate, the installation of urban gas, the replacement of gas distribution plates, and the replacement of boilers, and there is no transfer margin of the instant real estate considering the inflation in the period during which the Plaintiff owned the instant real estate. Nevertheless, the instant disposition based on the premise that the transfer margin

B. Relevant statutes

It is the same as the entry of the "attached Acts and subordinate statutes".

1) First, as to the Plaintiff’s assertion on reflection of price inflation during the retention period of the instant real estate, the price raised during the retention period of the instant real estate under the Health Unit and the former Income Tax Act (amended by Act No. 10625, May 2, 201; hereinafter the same) is actually reflected through the special deduction system for long-term holding. It is not subject to separate consideration in determining the tax base of transfer income. Thus, in disposing of the instant real estate, the Plaintiff recognized KRW 9,60,000 as the special deduction for long-term holding for the period during which the Plaintiff owned the instant real estate, as seen earlier. Accordingly, this part of the Plaintiff’s assertion is

2) Next, we examine the Plaintiff’s assertion on reflection of the amount of expenditure.

In a lawsuit seeking revocation of a disposition imposing income tax, the burden of proof on the tax base, which is the basis of taxation, is on the tax authority, and the tax base is deducted from necessary expenses, so the tax authority must bear the burden of proof on income and necessary expenses in principle. However, since most of the facts that generated necessary expenses are in the sphere under the control of the taxpayer, and the tax authority is difficult to prove. Thus, if it is reasonable to prove the taxpayer in consideration of difficulty in proof or equity between the parties, it accords with the concept of fairness to recognize the necessity of proof on the taxpayer (see, e.g., Supreme Court Decisions 2002Du1588, Sept. 23, 2004; 2006Du16137, Oct. 26, 2007).

“The Plaintiff claimed that the Plaintiff spent at least KRW 65 million in total at least for the repair work, urban gas installation work, replacement of gas distribution board, boiler replacement, etc. of the instant real estate on July 1992. Of these, some items among them may constitute necessary expenses of transferred assets as “expenses paid for the alteration of the purpose of use, improvement of the purpose of use, or convenience in the use of transferred assets” under Article 97(1)2 of the former Income Tax Act and Article 163(3)3 of the Enforcement Decree of the Income Tax Act. However, there is no evidence to acknowledge that the Plaintiff did not have any other necessary expenses of transferred assets. However, there is no evidence to acknowledge the amount exceeding KRW 400,00,00,000 among the acquisition value already deducted by the Defendant, solely on the basis of the order of delivery of the instant real estate to the instant real estate to the instant real estate by the Plaintiff, the witness of the first instance △△△△△△, and the fact-finding inquiry about the △△ Gas Co., Ltd. of the Party.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.