Seoul Administrative Court 2017Gudan74262 ( October 10, 2018)

A disposition to apply the conversion acquisition value because the value of payment in kind cannot be recognized as the actual transaction value is legitimate.

(1) Although the acquisition value of the real estate of this case is the payment value in kind, the defendant's disposition imposing capital gains tax by applying the conversion acquisition value is legitimate on the ground that the acquisition value of the real estate of this case is unclear on the ground that there is no unsecured or non-interest loan on the high-amount loan, and there is no evidence that the plaintiff received the high-amount cash as a divorce-related material, etc.

Article 97 (Calculation of Necessary Expenses in Transfer Income)

2018Nu69143 Revocation of Disposition of Imposing capital gains tax

KimA

BB Director of the Tax Office

o October 10, 2018

May 3, 2019

June 21, 2019

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 Defendant’s imposition of KRW 00,00,000 (including additional taxes) for the transfer income tax of the year 2014 on the Plaintiff on January 2, 2017 shall be revoked.

1. Imposition of capital gains tax;

The following facts are recognized in full view of each description of Gap evidence Nos. 1, 2, 3, 4, 10, 19, 20, 25, 30, 31, 32, 33, 35, Eul evidence Nos. 1, 2, and 3 (including branch numbers; hereinafter the same shall apply), Gap evidence Nos. 11, 22, 23, and 24, and the whole purport of the pleadings at part of witness Eul of the court of first instance.

[1]

On January 24, 1985, the Plaintiff reported marriage with the Gangwon A, but reported divorce on January 21, 1990.

On December 30, 2005, the Plaintiff acquired shares of 49,587/456,868 square meters of forest 6-1 forest 456,868 square meters from HaBB, ○○○○○○, Gyeonggi-do (hereinafter referred to as “○○○○”) from HaB.

The above shares became 48,851 square meters of forest land in ○○○-ri, 6-39 forest land through the division of land and common property (hereinafter "land in this case").

On December 12, 2014, the Plaintiff transferred the instant land to Gangwon in KRW 600,000,000 for the price.

[2]

On February 17, 2015, the Plaintiff made a preliminary return and payment of capital gains tax with the acquisition value of KRW 515,000,000, and the transfer value of KRW 600,000 with respect to the transfer of the instant land.

On January 2, 2017, the Defendant rendered a disposition imposing capital gains tax of KRW 00,000,000 (including additional tax) for the Plaintiff on the ground that the acquisition value cannot be recognized as the actual transaction value, and thus the acquisition value is determined based on KRW 112,025,316, the Defendant rendered a disposition imposing capital gains tax of KRW 00,000 (including additional tax) for the year 2014 (hereinafter “instant disposition”).

On April 4, 2017, the Plaintiff appealed to the Tax Tribunal, but the Tax Tribunal dismissed the Plaintiff’s request on July 19, 2017.

2. Summary of the plaintiff's assertion

The Plaintiff acquired the instant land from the subordinateB on December 30, 2005. At the time, 515,000,000 won as the actual transaction price, since the Plaintiff acquired the instant land by payment in lieu of loan amounting to KRW 5,15,00,000, which was not repaid from the subordinateB at the time.

Therefore, without recognizing the above KRW 515,00,00 as the actual transaction price, the instant disposition that determined the acquisition price of the instant land according to KRW 112,025,316 at the conversion price is unlawful, and thus, the revocation thereof is sought.

3. Loans and payment in kind;

A. The plaintiff's assertion

The plaintiff claims the lending of money and payment in kind to the sub-B as above, and the specific arguments are as follows.

1) Lending KRW 608,00,000 and lending KRW 638,700,00

The mother of the former husband, divorced from the Plaintiff, requested the Plaintiff to lend money by requiring approximately KRW 4.1 billion in order to purchase 536,130,533 square meters of 00 square meters of 00,000 from December 23, 1995 to January 9, 1995, the Plaintiff deposited KRW 608,000,000 won in the account under the name of the Industrial Bank of Korea in the name ofHaB in the name of ○○○ 6,833 square meters, and ○○ 614-1,616,617 (hereinafter referred to as “five parcels”), and then lent money to the Plaintiff by depositing KRW 4.1 billion in the account under the name of ○○ 6,00,000,000 during the period from December 23, 1995 to January 19, 196.

2) Payment in substitutes of KRW 300,000,000

After about three years from the date of the last loan, the Plaintiff was unable to receive the loan of KRW 1,246,70,000 (=608,000 + 638,700,000) from the HaB, and demanded the HaB to pay a part of the loan through the HaB. On July 19, 1999, the Plaintiff acquired five parcels, including KRW 300,000,000,000, from the HaB, as payment in lieu of KRW 614-1, etc. among the above loans.

3) 100,000,000 Loans

The Plaintiff again deposited KRW 100,000,000 in the light bank account in the name of HB over 13 times from February 11, 2003 to October 10, 2005, and then lent it to HB to the Han Bank account in the name of HB.

4) Payment in kind of 600,000,000

After that, on December 5, 2005, the Plaintiff completed provisional registration on the land ○○○○○ 615-4, 615-5, 615-6, 616-1, and 616-2 (hereinafter referred to as “five parcels, including ○○ 615-4”) owned by HaB as collateral for loan claims. On December 27, 2005, the Plaintiff acquired five parcels, including 1,046,70,000,000 (=1,246,70,000,000 + 300,000,000,000 + 600,000,000,0000,000 as payment in lieu of KRW 615-4,00,000,000.

5) Payment in lieu of the instant land

After that, the Plaintiff acquired shares of 446,70,000 won (i.e., KRW 1,046,70,000 - KRW 600,000) in accord and satisfaction of 49,587/456,868 square meters of ○○○○-1 Forest land, 456,868 square meters, from HaB. At the time of payment, the Plaintiff acquired shares of 520,000 won in accord and satisfaction of 520,30,000 won in excess of 73,30,000 won (=520,000 - KRW 446,70,000 - KRW 600,000) and paid the above shares of 05,000 won in accord and satisfaction of 305,005,000 won in 205,000 won in - from May 29, 2006 to March 208.

B. Determination

The plaintiff's above assertion is examined as follows.

1) Lending KRW 608,00,000 and lending KRW 638,700,00

(1) On December 195, 1995, HB requested the Plaintiff to lend money by requiring approximately KRW 4.1 billion to purchase five parcels, including 536,130/539,833 equity and ○○ 614-1 equity and ○○ 614-1 equity, etc. The Plaintiff deposited KRW 608,00,000 in the Industrial Bank of Korea account in the name of HB from December 23, 1995 to January 9, 1996, and lent KRW 608,00,000 to HBB, and deposited KRW 638,700,000 in the account in the name of HB from January 11, 1996 to July 29, 196.

According to the evidence evidence Nos. 12 and 13, as alleged above by the plaintiff, it is acknowledged that the Industrial Bank of Korea and the Korea Investment Trust account under the name of HB as alleged by the plaintiff was deposited in KRW 608,00,000, and KRW 638,700,000, as alleged by the plaintiff. However, there is no objective evidence to acknowledge that the plaintiff deposited it.

The Plaintiff asserted that his resident registration domicile was in Busan but actually deposited KRW 608,00,000 in the account of the above Industrial Bank of Korea at the location of Sadong branch, Saundong branch, Trade Center branch, Tehye branch, and Syero branch, etc., and that it deposited the above KRW 608,00,000. The Plaintiff cannot be deemed to have deposited the above KRW 608,000 on account of the fact that the Plaintiff resided with his child in Seoul.

She, the plaintiff, at the time of divorce with the Gangseo in 1990, received 1 billion won as consolation money at the time of divorce, and asserts that the cash possessed by the passbook was lent to HaB as it is, not by withdrawing cash in the passbook (see the plaintiff's complaint).

According to the testimony of the witness of the trial party, the plaintiff was given cash of one billion won as consolation money to the plaintiff while divorced from the plaintiff, and the plaintiff had cash. However, there is no objective data to recognize the payment of consolation money.

In addition, as seen earlier, Gangnam reported the divorce on January 21, 1990 with the Plaintiff, and there is room for doubt even if the Plaintiff possessed the cash received as consolation money by December 1, 1995, which was about six years thereafter.

Referencely, the Plaintiff asserts that HB opened the above Bank’s account and an investment trust account in order to clarify the lending relationship with the Plaintiff by purchasing 536,130/539,833 square meters of ○○○○ 6-1 forest and field 539,833 square meters of forest and field.

According to the evidence Nos. 37 and 39, it is recognized that the above Industrial Bank account was opened on December 23, 1995, and that there was a meriation on January 11, 1996, stating that the money investment trust account was opened on January 11, 1996, and that there was a meriation on the money transfer account."However, such establishment date and meriation can only be deemed to have opened the above account to purchase shares in ○○○ Risan 6-1 forest land, etc., and it is difficult to recognize that HB opened the above account to clarify the relationship of monetary lending with the Plaintiff.

According to the plaintiff's assertion and the plaintiff's assertion, HB around December 1995, purchased 5,36,130/533 square meters of 00,000,000 KRW 4,000,000,000,000 KRW 6,000,000,000,000 KRW 6,000,000,000 KRW 74,000,000,000,000 KRW 4,10,000,000,000,000 KRW 4,000,000,000,000. (See the plaintiff's complaint)

However, according to the statements in Gap evidence Nos. 14 and 16, it is recognized that the contract was prepared on July 15, 1999 with the content thatHaB sold five parcels, including ○○○○ 614-1, etc., to the plaintiff at KRW 300,000,000,000. On December 5, 2005, HB made a contract with the purport that HB shall sell 635,000,000,000,000,000 won for ○○○ 6-1,000,000,000. Meanwhile, HB did not submit as evidence in this case that HB purchased five parcels, including 536,130,539,833 square meters of forest land, 530,539,8333 equity and 614-1, etc.

As above, in light of the fact that 300,000,000 won as stated in the contract written in 1999 and 2005 and 635,00,000,000 won in total are less than one billion won, it is difficult to accept the Plaintiff’s assertion that HaB requested a monetary loan to the Plaintiff on the ground that 4.1 billion won was required for purchasing 5 parcels of 0,136,130,539,833 shares of 0,000 square meters around December 1995 and 4.1 billion won in purchasing 0,000,000 won in total.

(v) Taking into account the foregoing circumstances, there is considerable room for doubt to acknowledge that the Plaintiff lent 608,00,000 won to HaB and 638,700,000 won.

2) Payment in substitutes of KRW 300,000,000

According to the plaintiff's assertion, even after the lapse of about three years from the last lending date, loans of KRW 1,246,70,000 (=608,00,000 + KRW 638,70,000 +) were not paid to HaB through HaB, and the HaB requested HaB to pay a part of the loans. On July 19, 1999, the 300,000,000 out of the above loans was acquired from HaB by payment of KRW 614-1,00 among the above loans.

According to Gap evidence No. 14, the contract was prepared on July 15, 1999 that Eul shall sell five parcels, including ○○○ 614-1, to the plaintiff at KRW 300,000,000,000, and it is recognized that the contract was written that 50,000,000 won shall be paid at the time of the contract and the balance of 250,00,000 won shall be paid at the time of the contract.

The content of this contract does not simply transfer the ownership of real estate to the Plaintiff by payment in kind of loan, but simply sell real estate, and it is difficult to view that the payment in installments is made by dividing the price into the down payment and the balance as the payment in kind of loan.

In addition, according to the above, there is considerable room for doubt to acknowledge that the Plaintiff lent 608,00,000 won to HaB and 638,700,000 won to HaB. Thus, it is difficult to deem that the Plaintiff owned the loan claim to HaB, and therefore, there is considerable room for doubt about recognizing the payment in substitution on the premise of the loan claim.

3) 100,000,000 Loans

(1) According to the Plaintiff’s assertion, the Plaintiff deposited KRW 100,000,000 in the light bank account under the name of HB over 13 times from February 11, 2003 to October 10, 2005 and lent it to HB.

According to the Plaintiff’s evidence No. 15, the Plaintiff deposited KRW 100,000 in the Korea Light Bank account under the name of HB over 13 times, as alleged above, and there is no objective evidence supporting that the Plaintiff deposited KRW 88,000,000 in total on October 10, 2005, and KRW 5,000,000 deposited on December 21, 2004.

As above, there is no objective evidence to acknowledge that the Plaintiff lent 12,00,000 won deposited by the Plaintiff to HaB. Unlike the above 608,000,000 won and the above 638,700,000 won loan, the Plaintiff did not present specific arguments as to the motive or circumstance of the loan of 100,000 won, in contrast to the above 100,000 won loan of 10,000 won.

According to the plaintiff's argument, the plaintiff loaned 608,00,000 won to HaB from December 23, 1995 to January 9, 1996, and loaned 638,70,000 won again from January 11, 1996 to July 29, 196, while the plaintiff was not paid 630,000 won, and 300,000,000 won was collected as payment in kind after the lapse of 3 years, and 638,70,700,000 won was loaned to HaB from January 23, 1995 to January 9, 1996 to 638,70,000 won, 300,0000 won - 300,000,000 won was loaned to 10,000,000 won without any collateral loan from 10,000 won.

According to the statements in the evidence Nos. 3, 4, and 11 and the testimony by the witness of the first instance court, the plaintiff married with the HaB on Jan. 24, 1985, but divorced on Jan. 21, 1990. At that time, the plaintiff agreed with the HaB to be responsible for raising two children born with the HaB, and the HaB had three son and three son including the HaB. Meanwhile, according to the testimony by the party witness Gangnam-gu, the HaB gave 1 billion won in cash as consolation money to the plaintiff while divorced with the plaintiff, but there is no objective material to recognize the payment of consolation money.

In light of the above circumstances, it is not easy for the Plaintiff to fully borrow a loan of KRW 1,346,70,000 (= KRW 608,00,000 + KRW 638,700,000 + KRW 100,000) after the Plaintiff’s divorce with the Gangwon-A, but it is not easy for the Plaintiff to fully obtain a loan without collateral or interest.

4) Payment in kind of 600,000,000

According to the plaintiff's assertion, after additional loan of KRW 100,000,000, the plaintiff completed provisional registration on December 5, 2005 with respect to five parcels, including ○○○○○ 615-4, which are owned byHaB as collateral for loan claims, and on December 27, 2005, - KRW 1,046,70,000 (= KRW 1,246,700,000 + KRW 300,000 + KRW 1,000,000 + KRW 1,00,000,000 in payment in lieu of KRW 615-4,00.

According to each statement of evidence Nos. 16, 18, and 35, HB made a contract to sell 635,000,000 square meters for the plaintiff on December 5, 2005 to ○○○ 6-1 forest land of 536,097 square meters for the plaintiff. On the same day, provisional registration for the above forest land has been completed in the plaintiff's future. On the same day, on December 27, 2005, HB made a contract to sell 71,626 square meters for the plaintiff 60,00,000 won for five parcels, including ○ 615-4, which was divided from the above forest, to ○ ○ 61,626 square meters for the plaintiff, and the fact that the above provisional registration was cancelled for the plaintiff's ownership transfer registration on December 28, 2005.

In comparison with the provisional registration and the registration of transfer of ownership under the Plaintiff’s name, it is difficult to obtain a promise to sell KRW 635,000,000 for the first 536,097 square meters of the price, but to sell approximately KRW 71,626 square meters of the price similar to almost KRW 600,000,000, which is almost 15% of the price. In addition, it is reasonable to view the completion of a separate registration of transfer of ownership rather than the principal registration based on the provisional registration as a result of the provisional registration as a result of the provisional registration

In addition, according to the above, the Plaintiff’s lending of KRW 1,346,70,000 (= KRW 608,000,000 + KRW 638,700,000 + KRW 100,000) to HaB is not easy to obtain, and it is difficult to readily conclude that the Plaintiff had a loan claim against HaB, and therefore, there is considerable room for doubt about whether to recognize a payment in kind on the premise of a loan claim.

5) Payment in lieu of the instant land

According to the Plaintiff’s assertion, the Plaintiff acquired shares of KRW 446,70,000 (=1,046,70,000 - 600,000 - 600,000) in accord and satisfaction of KRW 49,587/456,868 square meters in ○○○○-1 Forest 66,868 square meters from HaB. At the time of payment, the Plaintiff acquired shares of KRW 520,000 in 73,30,000 in payment and satisfaction of KRW 520,000 (=520,000,000 - 446,70,000,000 in payment and satisfaction of KRW 546,700,000.

In accordance with the above, the Plaintiff paid 73,500,000 won to HaB from May 29, 2006 to March 20, 2008, to HaB from March 20, 2008, and thereafter, around 2011, the value of the payment in kind was determined as KRW 515,00,000, when the share in the land division was determined as 48,581 square meters of the instant land.

According to the statements in Gap evidence Nos. 19 and 20, HB made a contract with the plaintiff on December 30, 2005 that he/she sold 49,587/456,868 square meters of 000 square meters of 0,000,000 won to the plaintiff on December 30, 2005, and it is recognized that the registration of ownership transfer was completed in the plaintiff's future with respect to the above shares on the same day.

However, as alleged by the Plaintiff, it is difficult to obtain the payment by simply preparing a written contract that sells the amount of the claim to KRW 520,000,000 in excess of 73,300,000 and completing the registration of transfer of ownership as alleged by the Plaintiff. In addition, if the value of the payment in kind exceeds the amount of claim to KRW 73,50,000, as alleged by the Plaintiff, the amount of the payment in kind shall be KRW 446,70,000 of the amount of the claim, and the amount of the payment in kind shall be KRW 515,00,000 of the amount of the claim.

In addition, according to the above, the Plaintiff’s lending of KRW 1,346,70,000 (= KRW 608,000,000 + KRW 638,700,000 + + KRW 100,000,000) to HaB is not easy to obtain, and it is difficult to recognize that the Plaintiff had held a loan claim against HaB, and therefore, it is difficult to recognize payment in kind on the premise of a loan claim.

4. Conclusion

In full view of the above, although the Plaintiff made a preliminary return on capital gains tax of KRW 515,00,000 with the acquisition value of the transfer of the instant land as the acquisition value, it cannot be recognized as the actual transaction value, and the Defendant’s decision on the acquisition value at KRW 112,025,316 based on the conversion value is lawful.

Therefore, the plaintiff's claim seeking the cancellation of the disposition of this case shall be dismissed due to the lack of reason, and the judgment of the court of first instance is consistent with this conclusion, and the plaintiff's appeal