Seoul Administrative Court 201Gudan3824 ( October 05, 2011)

Cho High Court Decision 2010Du2481 ( October 27, 2011)

Since it is impossible to confirm the actual transaction price at the time of acquisition, the conversion acquisition price is legitimate.

In light of the fact that a sales contract is not presented at the time of acquisition, the fact that a part of the amount was withdrawn from the account on the nearest day of the sales contract, but it cannot be readily determined as a sales price, and that the acquisition of land at a higher price than twice in comparison with the sale price after six years is difficult to obtain, it is difficult to obtain it.

Article 97 of the Income Tax Act

Article 163 of the Enforcement Decree of the Income Tax Act

2011Nu39211 Revocation of disposition of imposing capital gains tax

AA

The Director of Gangnam District Office

Seoul Administrative Court Decision 2011Gudan3824 decided October 5, 2011

March 21, 2012

April 18, 2012

1. Revocation of a judgment of the first instance;

2 The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant’s disposition of imposition of capital gains tax of 000 won for the year 2008 against the Plaintiff on July 1, 2010 shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. Details of disposition;

The plaintiff, on October 11, 200, acquired 00 m2 or 10 m20 m2 or 251 m2 or 20 m2 or 30 m20 m2 or 20 m20 m2 or 30 m20 m20 m2 or 251 m20 m2 or 30 m20 m20 m2 or 300 m20 m2 or 200 m20 m2 or 10 m20 m20 m20 m2 or 200 m20 m20 m20 m2 or 201 m20 m20 m20 m3 or 200 m20 m3 or 20 m20 m20 m3 or 20.

2. Whether the instant disposition is lawful

A. The plaintiff principal

The Plaintiff purchased the instant land No. 1 from DaB and LCC from DaD in 000, respectively, and transferred all of the instant land No. 2 to 000 won. As such, there is no gains from transfer since the Plaintiff purchased the instant land from DaD in 000 won. The instant disposition that calculated the acquisition value at the conversion price is unlawful even when the Plaintiff was sufficiently able to verify the actual transaction price at the time of acquiring the instant land Nos. 1 and 2.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 114(1) of the Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009) provides that the head of a district tax office having jurisdiction over the place of tax payment or the head of a regional tax office having jurisdiction over the place of tax payment shall determine the tax base and tax amount of capital gains in cases where a person liable to make a preliminary return under Article 105 or a person liable to make a final return under Article 110 fails to do so. According to Article 97(1) of the Income Tax Act, the expenses to be deducted from the transfer value in calculating gains are the actual transaction value or the amount of capital gains in cases where the acquisition value cannot be confirmed at the time of acquisition, and Article 163(1) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21301 of Feb. 4, 2009) provides that Article 97(1)1(b) of the Income Tax Act (amended by Presidential Decree No. 21301 of Feb. 4, 2009>

2) In full view of the following circumstances, it is reasonable to view that the Defendant’s determination of the tax base and tax amount of capital gains on the Plaintiff pursuant to Article 114(1) of the Income Tax Act constitutes a case where the actual transaction price cannot be confirmed at the time of acquiring the instant land 1 and

① The Plaintiff did not present a sales contract at the time of acquiring the instant land Nos. 1 and 2 (a sales contract submitted by a DD at the time of filing a transfer income tax report is submitted in writing by the Defendant).

② According to the evidence No. 5, the Plaintiff’s withdrawal of KRW 000 and KRW 000 on two occasions on September 17, 2002 from the Plaintiff’s account is recognized, but in light of the fact that ChoB deposited KRW 00 in the Plaintiff’s above account on September 30, 2002, it cannot be readily concluded that the said money was the purchase price for the land No. 1 and 2 [the Plaintiff is not the sales price for each of the instant land on September 10, 202 or September 13, 2002 (Evidence No. 3-5) and received the registration of ownership transfer on October 11, 2002 on September 17, 200, it is sufficient to deem that the purchase price was the registration date, and that the remainder of the purchase price was paid at the time of registration on the ordinary contract date, and the entire amount of the purchase price could not be considered as the sale price on September 17, 2002.

③ A written confirmation (Evidence No. 4) stating that "A, at around September 2002, the Plaintiff was found to be the Plaintiff's office and the land Nos. 1 and 2 of this case was purchased at a total of 000 won without directly verifying each of the above lands, and the Plaintiff was not deemed to have disposed of at a half of the purchase price around April 2008," which was prepared by Park K-K, is an employee of the Plaintiff's office operated by the Plaintiff, and the purchase price is different from the amount claimed by the Plaintiff, and even if the purchase was made upon the request of relatives, it is difficult to understand that the purchase price of the instant Nos. 1 and 2 of this case was higher than twice in comparison with the sale price after six years, based on empirical rule, it is difficult to understand that the purchase price stated in the written confirmation is as is.

④ According to the evidence No. 7-1 to No. 5, the officially announced land price for the land No. 1. 2 of this case can be found to have increased double the Plaintiff’s transfer in 2008 over the year 2002 that the Plaintiff purchased the land. Rather, it is difficult to accept that the Plaintiff acquired the land No. 1. 2 of this case in 2002 by paying 200 won near the sale price in 2008.

⑤ At the court of first instance, UDR sold the instant land No. 2 to the Plaintiff at KRW 000, and testified that the instant land No. 1 was less than the said amount and sold to the Plaintiff, but it is difficult to believe for the reasons as stated in paragraphs (3) and (4).

① The sales price for the land No. 2 in this case is KRW 000, in a real estate sales contract (certificate No. 6) submitted by UD at the time capital gains tax was declared in 2002.

3. Conclusion

The claim is without merit. The judgment of the court of first instance is unfair and thus revoked. The claim is dismissed.