In calculating the acquisition value of a new building and an extended building, the method of the on-site investigation and the extended part may be calculated by applying the method of the estimation investigation.

Although the building of this case is divided at a time and newly constructed and expanded, the whole building of this case, including extended parts, constitutes one building under the law, and so long as the newly constructed and expanded parts are transferred en bloc, it shall be deemed to constitute a single subject of taxation. Therefore, when calculating the acquisition value of the building of this case, it cannot be calculated by means of an on-site investigation and an estimated investigation.

Article 94 (Scope of Transfer Income) Article 96 of the Income Tax Act (Estimated Decision and Revision) Article 176-2 (Estimated Decision)

2013Guhap10687 Revocation of Disposition of Imposing capital gains tax

LAA

Head of tax office

October 30, 2014

January 15, 2015

1. The imposition of a tax shall be revoked;

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

The same shall apply to the order.

1. Basic facts

A. The Plaintiff’s acquisition and transfer of real estate

On October 20, 2005, the Plaintiff acquired an OB 1123-10 large scale of 377 square meters (hereinafter referred to as “instant land”) from OB, O-si, O-si, 1123-10 large scale of 37 square meters (hereinafter referred to as “the instant land”). On December 20, 2010, the Plaintiff newly constructed two-story commercial buildings (1st 308.5 square meters, 2nd 186.14 square meters) on the said ground, and owned a building of 83.87 square meters on the said second floor on May 2, 2011 (hereinafter referred to as “the instant new construction and extension commercial building”), and transferred the instant land and building to KimCC and DoD in the purchase price OO.

B. Return of capital gains tax by the Plaintiff

On July 11, 2011, the Plaintiff scheduled and paid the transfer value of the instant land and building to the Defendant as an OOO (on the basis of the actual transfer value), and the acquisition value of the instant land and building cannot be confirmed as the actual transaction value at the time of acquisition, the Plaintiff scheduled and paid an OOO of the capital gains tax calculated based on the standard market price as follows.

C. Defendant’s disposition to increase or correct capital gains tax

On January 2, 2013, the Defendant applied OOO(the instant land) and OOOO(the newly constructed part of the instant building) to the Plaintiff on January 2, 2013, since the acquisition value of the instant land and the newly constructed part of the instant building can be confirmed as at the time of acquisition. The acquisition value of the extended part of the instant building cannot be confirmed as at the time of acquisition, and thus, deducted the said tax amount scheduled and paid by the Plaintiff from the transfer income tax calculated by applying OOO(the converted acquisition value as at the time of acquisition, and then increased or corrected OO(including additional tax) of the transfer income tax corresponding to the difference (hereinafter referred to as “instant disposition”).

(d) Procedures of the previous trial; and

On February 4, 2013, the Plaintiff dissatisfied with the instant disposition, filed a request for examination with the National Tax Service on February 4, 2013, but was dismissed on June 20, 2013.

[Ground of recognition] The facts without dispute, Gap evidence 1 to 3, Eul evidence 1 to 3 (including numbers, and hereinafter the following) and the purport of the whole pleadings

2. The plaintiff's assertion and relevant Acts and subordinate statutes;

A. The plaintiff's assertion

In calculating the transfer income tax imposed by the Defendant pursuant to the disposition of this case, there is an error in calculating the acquisition value of the land and buildings of this case as follows, and the disposition of this case based on this error is unlawful.

1) Regarding the instant land

In calculating the acquisition value of the instant land as the actual acquisition value, the Defendant included only OOOOO won in the actual acquisition value as the construction cost of the building that the Plaintiff acquired in return for the acquisition of the instant land in addition to the financial liabilities acquired by the Plaintiff while acquiring the instant land, and did not include the OOOO won additionally disbursed by the Plaintiff to ChoE, the construction cost of the said building, in the actual acquisition value.

2) Regarding the instant building

In calculating the acquisition value of the building of this case, the Defendant calculated the acquisition value by applying the conversion acquisition value on the ground that the extension part cannot be confirmed at the time of acquisition and by including only the OOOO and the OOOO of sewerage burden as the actual acquisition value on the ground that the new part can be confirmed at the time of acquisition.

However, as the instant building was transferred en bloc as a single building, if there is no evidentiary document to verify the actual transaction price at the time of acquisition of the extended part, it constitutes a case where there is no evidentiary document to verify the actual transaction price at the time of acquisition of the entire building of this case, and thus, the acquisition price should be calculated by

Furthermore, with respect to the calculation of the acquisition value of the newly constructed portion of the instant building, the Defendant recognized only the portion for which the construction cost is recognized through the issuance of the tax invoice as new construction cost. However, in addition to the portion of the construction for which the tax invoice was issued, the Plaintiff also disbursed the expenses due to septic tanks, communications, fire-fighting, and waterworks construction, etc., and there is no evidentiary document verifying the construction cost, and

(b) Related statutes;

It is as shown in the attached Table related statutes.

3. Determination

(a) Whether the acquisition value is calculated;

1) Under the tax law on the recognition of necessary expenses

Inasmuch as the tax authority bears the burden of proving the legality of taxation and the existence of the taxation requirement fact, the tax authority, in principle, bears the burden of proving necessary expenses. However, as necessary expenses are favorable to the taxpayer and most of the facts generating necessary expenses are located in the controlled area of the taxpayer, and the tax authority has difficulty in proving them, so it should return to the taxpayer the necessity of proof if it is reasonable to have the taxpayer prove the necessary expenses in consideration of the difficulty of proof or the equity between the parties. However, in cases where necessary expenses are apparent, deeming necessary expenses as zero is contrary to the empirical rule because it is against the rule of experience to the extent that it is possible to calculate necessary expenses by the method of the on-site investigation or the estimation investigation, if necessary expenses are obvious, the tax authority must prove the amount by the time of the conclusion of the fact-finding proceeding (see, e.g., Supreme Court Decisions 91Nu10909, Jul. 28, 1992; 9Nu165, Apr. 15, 1995).

On the other hand, in principle, the tax base and tax amount of income tax should be determined by the actual amount revealed by the method of on-site investigation, and in order to determine it by the method of on-site investigation, it shall be exceptionally permitted only when there is no taxpayer’s account books or documentary evidence, etc. or there is no other method to disclose the actual amount of income without the credibility of the important portion being recorded in inadequate or false. Thus, the reason why the taxpayer wants to investigate and determine the actual amount of income by the method of estimation alone cannot be deemed as satisfying the requirements for on-site investigation (see, e.g., Supreme Court Decision 97Nu20304, Jan.

2) As to calculating the acquisition value of the instant land

In light of the above legal principles, the following facts and circumstances can be acknowledged by comprehensively taking into account the facts and evidence as seen earlier, Gap evidence, Eul evidence No. 4, Eul evidence No. 5, and evidence No. 6. The plaintiff purchased the land from ChoB, and the plaintiff takes over financial obligations owed by ChoB and her husband Kim F, as collateral for the said land, and decided to substitute payment for the plaintiff's new construction work contract for the said 1123-4 on the ground that the plaintiff purchased the land on June 27, 2005, since it is difficult to view the construction contract for the new construction of the building at the above 1123-4 on the ground that the construction cost for the above 1123-4 was included in the construction cost for the above new construction work, according to the plaintiff's allegation that the construction cost for the new construction work was included in the construction cost for the above OE constructor's new construction work contract for the construction work, the construction cost for the OEG was not included in the construction cost confirmation issued by the OE.

Meanwhile, since the fact that the Plaintiff incurred additional construction costs in addition to the above OO members is not acknowledged for the construction cost of the said building, there is no room to apply the estimation investigation method on the ground that there is no evidentiary data, etc. for the confirmation of such cost on the premise that such cost has been paid.

Therefore, the computation of acquisition value of the instant land is lawful.

3) As to the calculation of the acquisition value of the instant building

A) Whether the acquisition value can be calculated by means of an estimate investigation only for a part of the building;

Since determining the tax base of a single taxable object by mixing the on-site investigation and the estimated investigation is not a taxation method recognized by relevant Acts and subordinate statutes, such as the Income Tax Act (see, e.g., Supreme Court Decision 2005Du14561, Jul. 26, 2007). In determining the tax base of capital gains tax, some of the single taxable objects can not be calculated by the method of on-site investigation and by the method of the estimated investigation for the remainder.

(2) In light of the above legal principles, although the building of this case was newly constructed and extended on a time basis, the entire building of this case, including the extended part, constitutes a single building under the law, and so long as the newly constructed and extended part was transferred en bloc, it constitutes a single subject of taxation. Thus, in calculating the acquisition value of the building of this case, the acquisition value of part of the building of this case shall be calculated by the method of a field investigation and the remaining acquisition value shall not be calculated by the method of a preliminary investigation.

However, since the Defendant applied the method of on-site investigation to the newly constructed part of the instant building, and calculated acquisition value by applying the method of on-site investigation, the Defendant’s calculation of acquisition value of the instant building by itself is unlawful

B) Whether it is possible to compute the acquisition value of the building of this case based on the actual transaction price

In light of the above legal principles, the following facts and circumstances can be acknowledged by comprehensively taking account of the aforementioned facts and evidence and evidence as seen earlier, as well as evidence Nos. 7 and 8 evidence, and the purport of the entire argument as to the appraiser H as a result of the appraisal commission by this court, i.e., (i) the building of this case constitutes a single taxation object and thus it is impossible to calculate the acquisition value by mixing the method of on-site investigation and the method of estimation investigation as seen earlier; (ii) there is no evidence proving the actual transaction value at the time of acquiring the extended part of the building of this case; and (iii) the Defendant included the construction cost in the actual acquisition value only for the newly constructed part of the building of this case where the construction cost can be verified through the issuance of tax invoice with respect to the construction cost of the newly constructed part of this case, but it can be easily expected that the expenditure of the construction cost that was not issued, such as personnel cost, had been incurred due to the Plaintiff’s direct execution of the construction work of this case. In fact, the acquisition value of the newly constructed part of this case could not be reflected.

B. Scope of revocation

1) Determination of whether a disposition is lawful in a lawsuit seeking revocation of a tax disposition is based on whether it exceeds a legitimate tax amount. The parties concerned may submit objective tax bases and materials supporting such tax amount until the closing of arguments in the fact-finding court is closed. When a legitimate tax amount to be imposed lawfully is calculated based on such materials, only the portion exceeding the legitimate tax amount should be revoked. However, if not, the entire tax disposition should be revoked, and in such a case, the court does not have the duty to calculate a legitimate tax amount by actively finding a reasonable and reasonable and reasonable calculation method ex officio (see, e.g., Supreme Court Decision 94Nu13527, Apr. 28, 1995).

2) In light of the above legal principles, in calculating the transfer income tax on the transfer of the building of this case, the acquisition value of the building of this case cannot be deemed unlawful, but the calculation of the acquisition value of the building of this case shall be deemed unlawful. However, the acquisition value of the building of this case cannot be confirmed at the time of acquisition, and the calculation of the acquisition value of the building of this case shall be based on the estimation investigation because it is impossible to verify the actual transaction value at the time of acquisition. In this case, calculating the acquisition value of the building of this case by selecting a reasonable and reasonable estimate investigation method is the area entrusted to the defendant who is the tax authority,

4. Conclusion

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