In calculating the acquisition value of land, the disposition imposing capital gains tax on the basis of the converted value pursuant to Article 114 of the Income Tax Act is legitimate.

In calculating the acquisition value of the transferred land, the disposition imposing capital gains tax is legitimate on the basis of the converted value pursuant to Article 114 of the Income Tax Act by deeming that it is impossible to recognize or confirm the actual transaction value at the time of transfer or acquisition of the relevant asset because there is no sales contract, receipts or other documentary evidence or any material part is incomplete.

Article 114 of the Income Tax Act shall be determined, corrected and notified on the tax base and amount of tax for transfer income.

2013Guhap3277 Revocation of Disposition of Imposing capital gains tax

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00. Head of tax office

May 22, 2014

June 12, 2014

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s disposition of imposition of the capital gains tax for the year 2012 imposed on the Plaintiff on April 8, 2013 is revoked, including the OOO and the OOO of the penalty tax for the failure to report.

1. Details of the disposition;

"A. The plaintiff acquired OB from OB on July 25, 1997 an O-dong 1295-3 large 210.2 square meters (hereinafter "the land in this case") and completed the registration of ownership transfer in the name of the plaintiff on October 2, 1997," and "B thereafter, the plaintiff newly constructed a building on the third floor above the ground in that ground (hereinafter "the building in this case"). On August 10, 2012, the land and buildings in this case were sold to OCC and completed the registration of ownership transfer in the name of OCC on October 8, 2012, the plaintiff calculated the actual transaction value of the land in this case and the building in this case as OO as the actual transaction value, and the POO was converted into the actual transaction value of the building in this case to OO and the POO as the real transaction value, and the POO was converted into the real transaction value of the land in this case."

D. Accordingly, on April 8, 2013, the Defendant calculated the acquisition price of the instant land reported by the Plaintiff as the actual transaction price at the time of the acquisition of the instant land by deeming that there is no evidence of transaction, such as a sales contract, etc., and thus, the actual transaction price at the time of the acquisition of the instant land is unclear. Accordingly, pursuant to Articles 97(1)1 and 114(7) of the Income Tax Act, and Article 176-2(3) of the Enforcement Decree of the Income Tax Act, the acquisition price of the instant land and buildings as the conversion price rather than the actual transaction price, and notified the Plaintiff of the decision to dismiss the acquisition price of the instant land and buildings as the OO (the conversion price of the instant land + the acquisition price of the instant building in + the OOO price of the instant land in addition to the acquisition price of the instant building in 2013). However, the Plaintiff was subject to a request for adjudication by the Director of the Tax Tribunal for adjudication (hereinafter referred to as “the Plaintiff”).

Facts without any dispute arising in recognition, Eul evidence 1, Eul evidence 2, Eul evidence 9, Eul evidence 10 and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Around July 1997, the Plaintiff purchased the instant land from the ChoB to the OOB. Although the contract on the instant sales contract was lost at the time, it is confirmed that the Plaintiff’s her husband Park DoD’s bank account was deposited out of the Plaintiff’s her husband’s bank account before and after the said transaction. As such, there is sufficient proof as to the said actual transaction value, so the said OOOO shall be calculated as the acquisition value of the instant land. Therefore, the instant disposition imposing capital gains tax by calculating the conversion value on the ground that it cannot be recognized or confirmed as the actual transaction value at the time of the acquisition of the instant land.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

(1) According to Article 100(1) of the Income Tax Act, when the transfer value is calculated based on the actual transaction value (including where the value under Article 96(3) and the value of transaction example, appraisal value, etc. is applied pursuant to Article 114(7)), the transfer value or acquisition value is also determined based on the actual transaction value (including the value of transaction example, appraisal value, conversion value, etc. under Article 97(7) and Article 114(7). According to Article 114(7) of the Income Tax Act and Article 176-2(1)1 of the Enforcement Decree of the Income Tax Act, where the transfer value or acquisition value is determined based on the actual transaction value, where there is no book, sales contract, receipt, or other documentary evidence necessary to confirm the actual transaction value at the time of transfer or acquisition of the relevant assets, or where it is impossible to recognize or confirm the actual transaction value at the time of transfer or acquisition of the relevant assets, the transfer value or acquisition value may be determined or corrected by 97O-100 or 400.

However, in light of the following circumstances: (a) No. 4; (b) No. 5; (c) No. 8-2; and (d) No. 9-2; and (c) the Plaintiff’s real estate sales contract and the purchase price for the instant real estate are ordinarily paid from the date of the sales contract to the date of the registration of ownership transfer; (d) the Plaintiff’s use of the land as the balance of the purchase price for the instant real estate was difficult to be easily agreed upon by the Plaintiff on November 4, 1997, based on the fact that the purchase price for the instant land was less than KRW 7,00,000,000,000,000,000,000,000,0000,000,000,000,000,000,000,000,000,000,000,000,000.

"3) Therefore, in calculating the acquisition value of the Plaintiff’s land, the instant disposition imposing capital gains tax on the land of this case is legitimate on the basis of the conversion value pursuant to Article 114(1) of the Income Tax Act, on the ground that it is impossible to recognize or confirm the actual transaction value at the time of transfer of the relevant assets or acquisition because there is no sales contract, receipts, or other documentary evidence or lack of important parts."

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.