Cho High Court Decision 2009J3507 ( November 24, 2009)

Since it cannot be deemed that a disposition imposed on a non-business land is legitimate.

In light of the fact that the Plaintiff is the representative of an enterprise whose annual sales are more than one billion won, it is not deemed that the Plaintiff was engaged in cultivating crops or cultivated not less than half of the farming work with its own labor, in view of the fact that the Plaintiff was a full-time employee in the cultivation of crops or a full-time employee in the cultivation of crops.

2011Revocation of disposition of revocation of imposition of capital gains tax, etc.

Gyeong Kim

OO Head of the tax office

April 6, 2011

April 20, 2011

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 154,179,140 against the Plaintiff on February 2, 2009 shall be revoked.

1. Details of the disposition;

A. On February 9, 2004, the Plaintiff acquired farmland of 148-4, 1737m2, 148-6m2, 195m2, 148-6m2, 148-98m2, and 83m2, 148-98m2, and disposed of the farmland of this case on October 11, 2007. On December 17, 2007, the Plaintiff filed a capital gains tax report by applying the provision on capital gains tax reduction and exemption on farmland of this case.

B. On February 2, 2009, the Defendant denied the reduction or exemption of capital gains tax on the farmland substitute land, and deemed the farmland of this case as the land for non-business use and imposed capital gains tax of KRW 154,179,140 on the Plaintiff in the year 2007.

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on September 25, 2009 on April 28, 2009, but the appeal was dismissed on November 24, 2009.

[Reasons for Recognition] The entry of Gap evidence Nos. 1 through 5 (including each number), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Since the plaintiff made the "self-gravation under Article 2 subparagraph 5 of the Farmland Act" in the farmland of this case, the farmland of this case is not the land for non-business use. Nevertheless, the defendant made the disposition of this case by considering the farmland of this case as the land for non-business use under Article 104-3 (1) of the Income Tax Act. Thus, the disposition of this case is unlawful (the plaintiff does not dispute the defendant's rejection of capital gains tax reduction or exemption due to farmland).

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) The former Income Tax Act (amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) stipulates that the transfer income tax rate shall apply to the transfer of non-business land. Whether the land constitutes non-business land shall be generally proved by the tax authority as it falls under the taxation requirements. However, since the former Income Tax Act widely provides non-business land, the requirements not falling under the non-business land function as the grounds for reduction and exemption. In the case of farmland, the former Income Tax Act serves as the grounds for reduction and exemption. The former Enforcement Decree of the same Act (amended by Presidential Decree No. 20618, Feb. 22, 2008) provides for re- village and self-development requirements as of whether the land falls under non-business land. Such matters can be easily proven by the taxpayer as belonging to the taxpayer's territory, and in the case of transfer income tax, it is reasonable for the taxpayer to select the relevant taxation requirements and submit the verification data.

(2) In this case, since the plaintiff continued to reside in the vicinity before and after the ownership period of the farmland of this case, the issue of this case is whether the plaintiff has cultivated the farmland of this case, since there is no dispute between the parties, the issue of this case is whether or not the plaintiff has cultivated the farmland of this case. For this purpose, the fact that the plaintiff was engaged in the cultivation of crops pursuant to Article 2 subparagraph 5 of the Farmland Act, or cultivated not less than 1/2 of the farming work with his own labor, and as long as he is engaged in the direct farming, the plaintiff also falls under the category of self-sufficiency in this case even if he concurrently engages in other occupation, but if he is engaged in the direct farming business, it cannot be viewed as an indirect operation of agriculture while referring to the other occupation (see, e.g.

However, it is difficult to believe that the Plaintiff constantly engaged in the cultivation of agricultural crops or cultivated not less than 1/2 of 1/2 of the farming work with its own labor, in light of the respective descriptions No. 9, as shown in Gap evidence No. 2-1, 2, and 3, the testimony of Gap evidence No. 6, 13, 15-1 or 6, witness KimD, and YE are insufficient to recognize it, and there is no other evidence to acknowledge it otherwise. Rather, in light of the above evidence and evidence No. 12-2, Eul evidence No. 3 through 6 (including each number), the Plaintiff’s annual sales of farmland is the representative of FF, ② the Plaintiff’s purchase of farmland more than 1 billion won, ③ the Plaintiff’s purchase of farmland of this case without any justifiable reason, ④ the Plaintiff’s purchase of farmland of this case, ⑤ the Plaintiff’s purchase of farmland of this case without any specific farmland, and there is no other evidence to recognize it.

(3) Even if the plaintiff cultivated the farmland of this case using leE's labor, so long as the plaintiff paid leaps to leaps, it constitutes a self-defense as it sets up a farmer's house under the plaintiff's account and responsibility. However, the "agricultural management" is an act falling under the "agricultural management" under Article 2 subparagraph 4 of the Farmland Act, and the above provision of the same Act separates the "agricultural management" and "self-defense." Therefore, the above assertion is without merit.

(4) Therefore, the Defendant’s instant disposition that imposed capital gains tax on the instant farmland as non-business land 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.