Whether it falls under real estate trading business and whether standard expense rate is legitimate;

In full view of the acquisition and holding status of land, the process of annexation and division of the land from the acquisition to the transfer, the status of use before and after the transfer, and the mode, size, frequency, etc. of transaction, it constitutes real estate trading business. The application of 70% of the cost rate by deeming the period of land to be more

Article 19 (Business Income)

Article 80 (Determination and Correction of Income Tax Act)

1. All of the plaintiffs' claims are dismissed.

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

The Defendant’s imposition of global income tax of KRW 171,94,150 for the year 2002, global income tax of KRW 202,987,080 for the year 2003, global income tax of KRW 341,993,470 for the year 2004, global income tax of KRW 349,629,320 for the year 2005, and the imposition of global income tax of KRW 349,629,320 for the year 2005 for the year 2004 for the year 204 for the Plaintiff Hu○○ (the “2002 of the Defendant’s claim” appears to be a clerical error of KRW 208,927,560 for the year 204).

1. Details of the disposition;

A. From March 1979, Plaintiff Kim Jong-hun had engaged in the livestock farming industry with the trade name of ○○-ri ○○-ri, Busan-do ○○○-ri, Busan-do ○○○○○-ri, mountain land, ○○○-○-○ Miscellaneous land, 89.787 square meters (hereinafter “instant ○○○-ri land”) and with ○○○ ○○ ○○-ri ○○ ○ ○○ -- 347 square meters (hereinafter “instant ○○○○-ri land”). From December 1, 1987 to December 1, 1987, he transferred the livestock farming industry with the trade name of ○○○-ri, Busan-dong ○○○-dong, Busan-dong, and ○○-○ 346 square meters (hereinafter “instant land”). From 200 to 346 square meters, he paid the said land from 205 square meters to 205 square meters, respectively.

B. On February 5, 2004, in relation to the transfer of the instant land to the Plaintiff Kim Il-hun and the instant ○ Dong, the Plaintiff Hu○○ has reported and paid the transfer income tax on the transfer margin of his share in relation to the person who jointly carried on the real estate leasing business in the land of this case.

C. However, the Busan regional tax office conducted a tax investigation on the plaintiffs around October 2006, determined that the act of transferring each of the above lands of this case constitutes real estate sales business for the purpose of obtaining profit margin, and notified the defendant of taxation data. After calculating the profit margin on each of the lands of this case based on the actual transaction price, the defendant imposed a global income tax of 171,94,150 won for the year 2002, global income tax of 2003, global income tax of 202,987,080 won for the year 2003, global income tax of 341,93,470 won for the year 204, global income tax of 349,629, 320, total amount of 1,06,54,020 won for the year 205, and the defendant imposed a disposition of 208,207,000 won for the year 204.

[Ground of recognition] Facts without dispute, Gap evidence 1 to 5, Eul evidence 1 to 3, Eul evidence 1 to 7, Eul evidence 1 to 5, Eul evidence 8-1 and Eul evidence 8-2, the purport of the whole pleadings

3. Whether the disposition is lawful;

A. The plaintiffs' assertion

The instant disposition should be revoked for the following reasons.

(1) The plaintiffs were inevitably disposed of while running a livestock industry or a real estate rental business in each of the instant lands while closing the business. Since the plaintiffs' act of transferring each of the instant lands is not recognized as the continuity and repetition of business objectives and business, it cannot be deemed as a real estate sales business. Accordingly, the defendant's imposition of comprehensive income tax is illegal.

(2) The Defendant calculated the amount of income by applying the premium rate of 20% to the simple expense rate of 70% per year in the calculation of each business income for the year 2005, which was 202, based on the estimation. However, the Plaintiff Kim Jong-hun did not acquire each of the instant land to use for real estate sales business, but acquired to use each of the instant land for the inherent livestock business, real estate rental business, etc., and transferred it to the business, and thus, it cannot be deemed that each of the instant land was owned by real estate sales business for not less than five years. As such, the simple expense rate of 80.9% applied to each of the instant land owned by the Defendant for less than five years shall be applied to the real estate sales business. In addition, the premium rate applied by the Defendant annually to each of the above periods is without any legal grounds. Thus, the Defendant’s calculation of

(b) Related statutes;

Article 19 (Business Income)

Article 80 (Determination and Correction of Income Tax Act)

(c) Fact of recognition;

The following facts do not conflict between the parties, or the testimony of Gap 3-1, 3, 7-1 through 4, Eul 10, Eul 18-2, Eul 18-1, 2, 3, Eul 4-1 through 5, Eul 5-1, 2, 6-2, Eul 10 through 13, Eul 14-1 through 12, Eul 16-1 through 16-3, Eul 17-1 through 5, Eul 18-1 through 5, Eul 19-1 through 3, Eul 20-1, 21-1, 21-2, 21-2, and 2-1 through 2-2 of the witness's testimony cannot be acknowledged in light of the following facts:

(1) The instant ○○○ and ○○○ land

(A) On March 23, 1979, Plaintiff Kim Ho-hun acquired the instant ○○ and the instant ○○○○ land, and engaged in livestock farming business from around March 23, 1979 to around February 28, 199.

(B) After the closure of business, the Plaintiff Kim Jong-hun intended to collectively dispose of each of the above land, but did not dispose of the land so as to be easy to dispose of, divided or combined the land, and divided into 36,704 square meters for ○○○○○-1 Miscellaneous land in ○○○○, ○○, ○○, ○○, ○○, ○, ○○-1 miscellaneous land in ○○, ○, ○, ○, ○○, ○, ○-204 square meters as follows. The instant land was divided into 28 square meters for the following reasons.

- Division into 925-O, 925-O, 925-O, 925-O

- Division into 925-O, 925-O, 925-O, 925-O, 925-O, 925-O

- Division into 925-O, 925-O on August 19, 202

- Division into 925-O, 925-O, 925-O, 925-O.O.

(C) In order to establish access roads necessary for the disposition of partition of each of the above lands, the Plaintiff Kim Jong-hun purchased approximately 784 square meters on six parcels of the land located immediately below the ○○ farm, and obtained permission for development activities for the purpose of development activities for the construction of access roads to the above ○○○ 925, 192-○ and 192-○ land, and constructed access roads over twice on August 8, 2001 and September 2, 2002.

(D) From around that time, Plaintiff Kim Jong-hun began to sell this case’s land. On 202, the above ○○○-ri 925-O, ○○, ○○○, ○○○, ○○, ○○○, ○○○, ○○○, ○○○, ○○, ○○○, ○○, ○○○, ○○○, 83,700,00) and 8 lots of 24,741 square meters (a total of the transferred amount was KRW 1,483, 70, 00), and on 203, the above ○○-ri 925-O,○○, ○○, ○○, ○○, ○○, ○○, ○, ○, ○, ○, ○○, ○, ○○, ○, ○○, and ○-14,000 square meters and six persons (a total of transferred amount).

(E) On the other hand, in the event of the conclusion of a sales contract for each of the above lands, it was added to the special agreement that the seller is responsible for it, the seller can perform civil engineering works under the responsibility of the buyer after permission for changing the form and quality, and the contract shall be null and void if the change of the form and quality becomes final and conclusive by the due date of the balance, and the plaintiff Kim Jong-hun also performed the excreta construction works as sewage according to the above special agreement.

(F) On June 199, 199, after the closure of ○○ farm, Plaintiff Kim Jong-hun requested ○○, a real estate broker, a high school, to dispose of ○ farm land. Accordingly, ○○○ established a container gambling room at the site of the instant ○○ land, and arranged the instant transfer of ○○-ri and ○○-ri land from 2001 to 205, and handled affairs, such as division of land necessary for such transfer, and opening of access roads.

(G) On the other hand, around November 2003, Plaintiff Kim Jong-hun transferred 720,000,000 won of the instant land of this case (limited to the instant land of this case, and a part of the instant ○○ farm was composed of only the administrative district) to ○○○○ around November 2003, and around November 7, 2003, the instant land of this case was divided into ○○○-ri 1132-36,37,38,40,41,42,43,444,45,46,47,50, and 13 lots, and 00,00 won was transferred to ○○-ri 1132-36,37,37,38,40,41,42,43,444,46,47, and 50,000 won and later, the said land was developed as the factory site through access roads

(2) The land of this case ○ Dong

(A) Around 1987, the Plaintiffs jointly acquired 140-○○○○-Dong 1400-○○ 79 square meters, 1400-○ 362 square meters, 1400-○ 13 square meters, 1400-○ 3 square meters, 1400-○ 43 square meters, 1400-○ 43 square meters, 1400-○ 43 square meters, 1400-○ 20-○ 20, 1400- ○ 380 square meters, 140-○ 1400- ○ 99 square meters and buildings on the ground (each 1/2 equity) from December 1, 1987 to jointly engage in the real estate rental business, and closed the business on June 30, 203.

(B) On April 18, 1996, Plaintiff Kim Jong-hun acquired 140- 00- 44 square meters in ○○○○○-dong, 1400- 00, and offered it to the said real estate rental business.

(C) Of the above land, the above 1400-O, 1400-O, and 1400-O was combined with the above 1400-O and the above 1400-O and the above 1400-O and the above 1400-O were combined with the above 1400-O and the above 1400-O and the above 1400-O and the above 1400-O and the above 1400-O were merged with the above 1400-O and the above 1400-O and the above 1400-O were merged with the above 1400-O and the above 1400-O land around November 5, 2003.

(D) On April 2003, Plaintiff Kim Jong-hun applied for a building permit for a second class neighborhood living facilities building on the land, such as the above 1400-○○, and on May 14, 2003, ○○○○○ head of ○○○○○○○○○○○○ Office obtained a building permit (permission number: 203-Civil Petitions and New Construction Permit-88) for a business facilities (living facilities) under the name of the ○○○○○○○, a name of the ○○ Metropolitan City.

(E) On November 20, 2003, the Plaintiff Kim Ho-hun removed 162.47 square meters of the above 1400-○ ground building on November 29, 2003. On November 29, 2003, the Plaintiff purchased the same 1400-○ 358 square meters of the building adjacent to the land owned by the Plaintiffs from Hanpo-ro (the above 1400-○ 1400-○ was merged with the same 1400-○, 1400-○, 1400-○, and 1400-○).

(F) On January 5, 2004, the Plaintiffs sold en bloc the instant land (the names of ○○○○○○○ Co., Ltd. around June 29, 2004) (the names are changed to ○○○○○○○○○○○○○ Co., Ltd.) and completed the registration of ownership transfer on February 5, 2004.

(G) As to the pertinent land’s ○○○○○bench, the sales price agreed between the Plaintiffs and the ○○○○bens is KRW 4,800,000, and the appraisal price of the Korea Appraisal Board as of January 20, 2004 is KRW 4,338,00,000.

(3) On the other hand, the year Hu○ was imposed and collected on each of the general income tax for 2005 on the fact that the above ○○-ri 192-○, 192-○, and 192-○ land was transferred to Kim ○○, etc. around 2001, and that the above ○○-ri 192-○ land was transferred to Park ○○ in around 2005, but no objection was raised against this.

D. Determination

(1) Whether the act of transferring each of the instant lands constitutes real estate sales business

(A) Whether the income from the transfer of real estate is business income or capital gains under the Income Tax Act shall be determined according to the ordinary social norms, considering the transferor’s acquisition and holding of real estate, whether the transfer is made, whether the transfer is made, whether the transfer is made for profit, whether the transfer is made, how the transfer is made, and whether the transfer is continued and repeated to the extent that the business activity is seen. The determination shall take into account not only the transfer of real estate in question but also all the circumstances before and after the transfer of the real estate held by the transferor throughout the entire real estate held by the transferor (see, e.g., Supreme Court Decision 9Du5412, Apr. 24, 2001). Article 1(2) of the Enforcement Rule of the Value-Added Tax Act provides that the sale or purchase of real estate shall be deemed to have been engaged in real estate, if the real estate is acquired more than once during one taxable period for business purpose, and it shall be deemed that the sale or purchase of real estate has been made more than twice during the pertinent taxable period.

(B) Determination as to the transfer of the instant ○○○ land by the Plaintiff Kim Jong-hun

The following circumstances revealed by the above recognition: ① Plaintiff Kim Jong-hun arranged the transfer of the above land over a long period from 201 to 2005, and transferred it to 28 lots of land in order to facilitate the disposal of the instant land; ② Plaintiff Kim Jong-hun decided to be responsible for Plaintiff Kim Jong-hun at the time of the transfer of the above land, and added special terms to the effect of the permission for change of land form and quality as a requirement for entry into the contract. In fact, Plaintiff Kim Jong-hun entered access roads and sewage pipes; ③ Real Estate broker was requested to dispose of the instant land including this case’s land from Plaintiff Kim Il-hun and established the sales office at the above site, and arranged the transfer of the above land over a long period of time from 201 to 2005; ② Plaintiff Kim Jong-hun's sale of land to 2001 to 2005, and the transfer price of the land was objectively recognized to have been more than 708,708,708,000 won of the above land.

(C) Determination as to the transfer of the instant ○○○ land by the Plaintiff Kim Jong-hun

In light of the following circumstances revealed by the above facts, i.e., the instant land of ○○○ is classified into the instant land of ○○○ and the administrative district, and the time when the instant land of ○○○ was transferred belongs to the same period as the time when the instant land of ○○○ was transferred, the transfer of ○○ land of ○○○ constitutes a brokerage by ○○, and other circumstances described in the above sub-paragraph (b) above, it is reasonable to deem that the instant land of ○○○○ constitutes a real estate sales business, and there is no reason to determine otherwise differently from the act of transferring ○○○○○ land of this case.

(D) Determination as to the plaintiffs' act of transferring the land in the Dong of this case

In light of the following circumstances revealed by the above recognition, i.e., ① Plaintiff Kim Jong-hun applied for a building permit for complex buildings on the ground, such as 1400- ○○, etc. among the Dos in which the plaintiffs jointly engaged in real estate leasing business, and ② annexation of various lands in order to facilitate the above construction after closure of real estate leasing business into 1400- ○ and 1400- ○, removed the above 1400- ○ and 1400- ○, and additionally purchased the above 1400- ○○ and 358 square meters which are linked to the above land. ③ After all, the plaintiffs transferred the land of this case to ○○-dong to ○○○, which is considerably larger in its transfer value, ④ The transfer of the land of this case was conducted in the same period before and after the establishment of the real estate leasing business, and the transfer of the land was conducted in the same manner before and after the acquisition of the land of this case under the plaintiffs 200- ○ and ○.

이에 대하여 원고들은, 위 건축허가는 부동산개발업체인 세븜공영 주식회사가 원고의 명의를 빌려 발급받은 것이고, 연접한 한○향 소유의 토지를 매수하여 함께 양도한 것은 매수인인 주식회사 ○○○어드벤타스의 요청에 의한 것일 뿐, 원고들

Although it is argued that there was no direct development activity on the land of this case, it is difficult to believe that the statement by the witness ○○, who seems to correspond thereto in light of the statement of Gap 9-3 and Gap 20-1, etc., and the statement of Gap 9-1 through 4, Gap 19-1 through 3, Gap 19-1 and 20-1, Gap 20-2, and Eul 23 are insufficient to recognize it, and there is no other evidence to acknowledge it, the above plaintiffs' above assertion is not acceptable.

(e) Sub-decisions

Therefore, this part of the plaintiffs' assertion is without merit.

(2) Whether the calculation of income amount is unlawful

The standard expense rate system, even if the necessary expenses are not recorded in the book in the calculation or correction of the income amount, the principal expenses (purchase expenses, rent, personnel expenses) which are the basic expenses for business are recognized as necessary expenses by the evidence, and other expenses are determined as necessary expenses by the government’s standard expense rate. In relation to real estate sales business, 70%, which is the lowest expense rate for the land whose holding period is not less than five years, and 80.9%, which is the highest expense rate, are applied to the land whose holding period is less than five years in consideration of land price increase factors, and 80.9%, which is the highest expense rate. In this context, it is reasonable to deem that the land holding period is calculated by adding up the period from the time of transfer to the time of acquisition of the land to the time of acquisition. Thus, it is legitimate to deem that the Defendant applied 70% to the expense rate by considering the holding period of each of the land of this case as more than five years when calculating the income amount of Plaintiff Kim Jong-hun as the Defendant calculated the income amount.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed in entirety as it is without merit. It is so decided as per Disposition.