Whether the appraised value is the market value within the objective exchange value of forest land;

In light of the fact that the appraisal value was conducted for the purpose of offering collateral to financial institutions for the purpose of appraisal, it is difficult to view it as the market value reflecting the appropriate exchange value of each forest of this case at the time of donation of each forest

Article 60 of Inheritance Tax and Gift Tax Act: Principles of Appraisal

1. The Defendant’s disposition of imposing gift tax amounting to KRW 861,450,720 against the Plaintiff on August 1, 2005 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the imposition;

The following facts are not disputed between the parties, or can be acknowledged in full view of the statements and images of Gap evidence 1, Gap evidence 2-1, 2-3 (the same as Eul evidence 3-5), Gap evidence 7-1 through 8, Gap evidence 8-1, 2, Gap evidence 9-1, 10-2, 3, Eul evidence 1-2, Eul evidence 1-1, 2, and Eul evidence 2-2, and the whole purport of pleadings.

A. On September 23, 1998, the Plaintiff decided to purchase 7 lots of forest land listed in the separate sheet owned by ○○○○ Co., Ltd. (hereinafter “Nonindicted Company”) and received the registration of ownership transfer from the Nonparty Company on February 5, 1999 on the following grounds: (a) the purchase price of KRW 362,00,000 out of the down payment of KRW 362,00,000 on the same day; (b) the intermediate payment of KRW 200,000 on the 30th of the same month; and (c) the remainder payment of KRW 90,000,000 on the 30th of the same month; and (d) the registration of ownership transfer was completed by the Nonparty Company on the grounds of the said sale.

On the other hand, each of the instant forests is a forest that is adjacent to the ○○○○○○○○○○○○○○○, and a forest that is located on the ground of 13 lots, built on the ○○○○○○○○○○○○, and is located on the 13th ground level.

B. The defendant is deemed to have taken over the forest land of this case from the non-party company with a special relation at a price lower than 2,418,636,00 won which is its market price (the appraised value of ○○○○○○○○). Pursuant to Article 35(1)1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 7010, Dec. 30, 2003; hereinafter referred to as the "former Inheritance Tax and Gift Tax Act"), the defendant deemed to have received gift tax of 2,056,636,00 won (2,418,636,000 won - 362,00,000 won), and imposed gift tax of 861,450,720 won on the plaintiff on August 1, 2005 (hereinafter referred to as the "instant disposition imposing tax").

C. On August 18, 2005, the Plaintiff dissatisfied with the instant disposition, filed an objection with the Commissioner of the National Tax Service, and the Commissioner of the National Tax Service dismissed the Plaintiff’s objection on October 24 of the same year. On January 17, 2006, the Plaintiff filed a request for examination with ○○○○. The Plaintiff’s request for examination was dismissed on May 19 of the same year.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The appraisal value determined by the Defendant as the market price of each forest of this case cannot be deemed as the market price within the meaning of the objective exchange value of each forest of this case under the Inheritance Tax and Gift Tax Act, and thus, the instant disposition based thereon is unlawful.

(2) If the forest land of this case is transferred at a price lower than the market price, it constitutes an unfair act under Article 20 of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998), and thus, income tax is imposed on the amount calculated by adding the difference with the market price as the Plaintiff’s other income. Thus, the gift tax cannot be imposed pursuant to Article 2(2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 5582 of Dec. 28, 1998). Thus, the disposition of this case is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

The following facts may be acknowledged in full view of each of the evidence mentioned above, Gap evidence 4, Eul evidence 5-1, 2, 3, Eul evidence 6-1 through 8, Eul evidence 3-1 through 4, and Eul evidence 6 through 9.

(1) At the time of December 1998, 12.59% of the shares of the non-party company was a major shareholder.

(2) The appraisal value of each forest of this case as of July 1, 1998, as of January 1, 1998, shown in the appraisal report prepared by ○○○○○ on December 10, 1998, is as follows (hereinafter “the appraisal value of each forest of this case”).

Parcel Number

Individual Land Price

Values

○○○○○○○○○○○○○ Forest 51,868 square meters

29,097,948 won

155,604,00 won

138,413 square meters of forest ○○○○ ○○○ ○○

65,192,523 won

1,362,965,00 won

The above ○○ ○○ ○○ Forest 83,239 square meters

46,447,362 won

249,717,00 won

The above ○○ ○○ ○○ Forest 3,868 square meters

1,934,00 won

19,340,00 won

The above ○○ ○○ ○○ 4,661 square meters of forest

2,330,500 won

23,305,00 won

The above ○○ ○○ ○○ Forest 13,884 square meters

16,799,640 won

69,420,00 won

The above ○○ ○○ ○○ Forest 60,793 square meters

73,559,530 won

432,665,00 won

The above ○○ ○○ ○ 21,124 square meters of forest

25,348,800 won

105,620,00 won

Total

260,710,303 won

2,418,636,00 won

On the other hand, the appraisal report of ○○○○○ on December 10, 1998 on each of the instant forests stated as follows: “The appraisal report was prepared in good faith and fairness in accordance with the relevant laws and regulations, such as the Act on the Publication of Land Prices and the Evaluation of Land, etc., at ○○○○○○○○,” and written as follows: (a) the client is a company outside the country; (b) the purpose of the appraisal is as a collateral; (c) the applicant is as a “the central branch of the ○○ Bank”; and (d) the period of investigation is from June 15, 1998 to August 2, 198 (hereinafter referred to as “the appraisal report of this case”).

(3) On March 11, 2004, the Plaintiff entered into a sales contract with ○○○○, Inc., and with respect to each of the instant forests, with the sales amount of KRW 705,00,000, and completed the registration of ownership transfer for the said company on the 16th of the same month.

Then, on May 19, 2004, the Plaintiff calculated the amount of capital gains from the transfer of each of the instant forest in ○○ Tax Office as KRW 222,670,830 [260,686,472,368- [260,683 won of transfer value + necessary expenses + special long-term holding deduction + KRW 7,820,583 + KRW 39,294,852], and the transfer and acquisition value were all deemed to have been based on the publicly assessed individual land price. Accordingly, the Plaintiff reported and paid KRW 60,805,340 of capital gains tax.

(4) When the entire ○○○○○○○○○ Branch of ○○○ District Court 2004Da1338 on March 16, 2005, hereinafter referred to as “○○○○○○○○○○○○○○○○○○○○ Office” from the end of 1997, the entire ○○○○○○○ Group was in a bad condition due to the business trouble and large scale insolvency, in mind, by transferring the real estate and assets owned by its affiliate companies at a low price in the name of a relative relative, etc., the company’s assets were deducted from the company’s assets. On September 23, 1998, the judgment included the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (the Act on the Aggravated Punishment, etc. of Real Estate under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (the Act on the Aggravated Punishment, etc. of Specific Economic Crimes) in the instant forest owned by the Nonparty Company, who takes over KRW 362,00,0000.

D. Determination

(1) The market price under Article 35(1)1 of the former Inheritance Tax and Gift Tax Act refers to the value that is generally recognized as a transaction between many and unspecified persons under Article 60(2) of the Inheritance Tax and Gift Tax Act, i.e., an objective exchange price formed through a normal transaction, but this includes the value assessed in an objective and reasonable manner. As such, where there is no exchange price through a transaction, the reliable appraisal institution’s appraisal price may also be deemed as the market price. However, in order to view the appraisal price as the market price, it should be recognized that the appraisal was made in an objective and reasonable manner (see Supreme Court Decision 200Du6244, Jun. 28, 2002).

(2) Therefore, as to whether the appraisal value of this case can be seen as the market price of each forest of this case at the time of donation of this case, it is difficult to conclude that the appraisal value of this case was faithfully and fairly prepared in accordance with relevant Acts and subordinate statutes, such as the Act on the Public Notice of Land Price and the Evaluation of Land, etc., and there is no indication as to the criteria, method, etc. for the appraisal value calculation. In addition, the purpose of appraisal is to assess the appraisal value at the time of offering the public interest to financial institutions, even though the individual land price does not reach the market price, the aggregate of the individual land price at the time of donation of this case is 260,710,710,300, 10.7% (260,710, 418, 636,000, 100, 2000, 2000, 200, 300, 206, 200, 306, 2005, 306, etc.).

(3) Therefore, in the instant case where there is no material to calculate the fair market price of each forest of this case at the time of the instant donation, the instant disposition imposing tax on the premise that the market price of each forest of this case is the value of the instant land is unlawful, and thus, the Plaintiff’s remaining assertion is not necessary to determine the remainder of

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition by admitting it.

J. H. H. H. H. H.D.

1. 00 ○○○○-gun ○○○○○○-gun ○○○○○○-gun 51,868 square meters of forests and fields;

2. 138,413 square meters of forest ○○○○○ in the same Ri.

3. The forest of ○○○○○○ in 83,239§³;

4. The forest of 00 square meters in the same Ri, 00 square meters;

5. The forest of ○○○○○, 4,661 square meters;

6. The forest of 13,884 square meters in the same Ri-ri ○○○.

7. The forest of 00,793 square meters in the same Ri ○○○○.

8. 21,124 square meters of forest ○○○○ in the same Ri, Ri, ○○.

public official law, order of law,

[Inheritance Tax and Gift Tax Act]

Article 35 (Presumption of Donation at Time of Transfer of Low Price or High Price (Amended by Act No. 7010, Dec. 30, 2003)

(1) Where a person falling under any of the following subparagraphs acquires or transfers the property concerned, he shall be deemed to have received a donation of the amount equivalent to the difference between the price and the market price, and the profits determined by the Presidential Decree

1. The transferee of the property, in case where he takes over the property from a person having a special relationship at a price below the market price;

Article 60 (Principles for Evaluation, etc.)

(1) The value of property on which an inheritance tax or gift tax is levied under this Act shall be determined by the company as of the date the inheritance commences or the date of donation (hereinafter referred to as the "date of appraisal"). In such cases, the value appraised by the method of appraisal stipulated in Article 63 (1) 1 (a) and (b) (excluding cases falling under the provisions of Article 63 (2)) shall

(2) The market price referred to in paragraph (1) shall be the value which is deemed to be normal in cases of free trade between many and unspecified persons, and shall include the expropriation, public auction price, appraisal price, and others which are deemed to be the market price under conditions

(3) In the application of the provisions of paragraph (1), where it is difficult to compute the market price, the value assessed by the methods prescribed in Articles 61 through 65 in consideration of the kind, scale, transaction status, etc. of the relevant area.

Article 61 (Appraisal of Real Estate, etc. before Amendment by Act No. 5582 of December 28, 1998)

(1) Real estate and rights to real estate shall be appraised by the methods prescribed in any of the following subparagraphs:

1. Land:

The officially assessed individual land price under the Act on the Public Notice of Land Price and the Evaluation of Land, etc. (hereinafter referred to as the “officially assessed individual land price”): Provided, That the price of the land on which no officially assessed individual land price exists, shall be the amount assessed by the method as determined by the Presidential Decree in consideration of the publicly assessed individual land price of neighboring similar land, and with respect to the land in

[Enforcement Decree of the former Inheritance Tax and Gift Tax Act]

Article 19 (Inheritance Deductions of Financial Property)

(2) The term "major shareholder or largest investor as prescribed by the Presidential Decree" in Article 22 (2) of the Act means the relevant stockholder, etc. in case where the sum of stocks held by one shareholder or one investor (hereinafter referred to as the "shareholders, etc.") and persons having relations falling under any of the following subparagraphs holds not less than 10/100 of the total number of stocks issued by the relevant corporation, and where the sum of stocks

1. Relatives;

Article 26 (Scope of Low or High Price Transfer and Special Related Persons)

(1) For the purpose of Article 35 (1) 1 of the Act, the term “low price” means the price where the value calculated by subtracting the price from the market price of the transferred property (excluding new type of bonds under Article 31-3 (1) 1) is 30/100 or more of the market price or at least 100 million won of the difference (amended by Presidential Decree No. 15971, Dec. 31, 1998).

(3) For the purpose of the main sentence of Article 35 (1) of the Act, the term “interest as prescribed by the Presidential Decree” means the difference between the price calculated pursuant to paragraphs (1) and (2) and the market price (amended by the Presidential Decree No. 17039, Dec. 29, 2000).

(4) The term “person in a special relationship” in any of the subparagraphs of Article 35 (1) of the Act means a transferor or transferee (hereafter in this paragraph, referred to as the “transferor, etc.”) and a person in a relationship falling under any of the following subparagraphs (amended by Presidential Decree No. 15971, Dec. 31, 1998):

1. A person who falls under Article 19 (2) 1 through 5. In such cases, "one stockholder, etc." shall be deemed "transferee, etc.";

Article 49 (Principles for Evaluation, etc.)

(1) For the purpose of Article 60 (2) of the Act, the term “those recognized as the market price under the conditions as prescribed by the Presidential Decree, such as expropriation, public sale price, appraisal price, etc.” means the amount confirmed by the provisions of one of the following subparagraphs during the period from six months (three months in the case of donated property) before the standard date of appraisal to the return of the tax base of inheritance tax or the deadline of the tax base of gift tax (amended by the Presidential Decree No. 15971,

1. If any fact of transaction exists with respect to the relevant property, the transaction value: Provided, That the same shall not apply where the transaction value is deemed objectively unreasonable, such as transactions with a person in a special relationship provided for in Article 26 (4);

2. In case where there exist the appraisal values which a reliable appraisal institution prescribed by Ordinance of the Prime Minister has assessed property for purposes other than payment of inheritance tax and gift tax with respect to the relevant property, the average value thereof

3. If there is a fact of expropriation or public auction in connection with the mountain concerned, the compensation amount or the public auction price.

(2) Where the value to be considered as the market price under the provisions of paragraph (1) is two or more, it shall be based on the value corresponding to the date nearest to the base date for assessment (amended by Presidential Decree No. 17829, Dec. 30, 2002).