The propriety of the disposition by which the former owner’s transfer value is determined on the basis of

A person who may be deemed to have conflicting interests with the Plaintiff initially reported the acquisition value as alleged by the Plaintiff, but thereafter, there is considerable credibility in the statement that the actual acquisition value in the tax investigation process or in this court has reached the above amount.

Article 96 of the Income Tax Act

1. The appeal is dismissed.

2. The costs of appeal are assessed against the Plaintiff.

The records of this case and the judgment of the court below and the grounds of appeal were examined. However, the grounds of appeal by the appellant are not included in the grounds provided for in each subparagraph of Article 4(1) of the Act on Special Cases Concerning the Procedure for Appeal, and the appeal is dismissed pursuant to Article 5 of the same Act. It is so decided as per Disposition by the assent

Seoul High Court 2007Nu31555 (Law No. 25, 2008)

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's disposition of imposition of capital gains tax of KRW 38,292,000 against the plaintiff on September 1, 2006 shall be revoked.

The court's explanation concerning this case is the same as the reasoning of the judgment of the court of first instance, and thus, it refers to Article 8 of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

Therefore, the judgment of the court of first instance is legitimate, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

Suwon District Court 2007Guhap3900 ( October 24, 2007)

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 KRW 38,292,00 on September 1, 2006 against the Plaintiff shall be revoked.

1. Details of the disposition;

A. On September 22, 2001, the Plaintiff and ○○○○○ (hereinafter referred to as “Plaintiff, etc.”) jointly owned one half of each share of 00,000,000 ○○○-dong 72-1 311 m2,00 m31 m2, and 5 m2 m2,000 m2,000 m2 (hereinafter referred to as “instant real property”). On November 27, 2001, the Plaintiff and ○○○ (hereinafter referred to as “Plaintiff, etc.”) reported the actual transfer value of KRW 670,000,000 (335,000,000 won in part of the Plaintiff’s share) and reported and paid a substantial transfer margin calculated on such premise.

B. After that, the head of ○○ Tax Office conducted a tax investigation with regard to the transfer of the instant real estate again by this ○○○, which confirmed that this ○○ acquired the instant real estate from the Plaintiff, etc., and notified the Defendant of this fact. On September 1, 2006, the Defendant issued the instant disposition to correct and notify the Plaintiff of capital gains tax of KRW 38,292,090, which belonged to the year 2001.

[Reasons for Recognition] : Gap evidence 1-1, Gap evidence 3, Eul evidence 1-1, 1-2

2. Determination of legality of disposition

A. The plaintiff's assertion

Although the Plaintiff et al. transferred the instant real estate to ○○○○ in the price of KRW 670 million, the Defendant received only the assertion from ○○○○○, leading to mistake as to the transfer price of KRW 850,000,000,000.

B. Determination

As evidence that corresponds to the Plaintiff’s assertion that the transfer price of the instant real estate is KRW 670 million, Party A’s certificate No. 1-2 (sales Contract) is written.

However, comprehensively taking account of the purport of Gap evidence 4, Eul evidence 2-1, Eul evidence 2-1, 5-7, Eul evidence 4-1, 2-1, 6-1 to 5-1, 5-2, and Eul evidence 1-6 of Eul evidence 5-1, and the purport of the whole pleadings, the plaintiff et al. offered the real estate of this case as security and borrowed money from ○○○○○○ Cooperative. At the time of selling the real estate of this case, the plaintiff et al. acquired debts in lieu of the payment of the purchase price of this case on October 4, 2001. (2) The plaintiff et al. purchased debts in lieu of the payment of the purchase price of this case to ○○○ and this○○○○○○○○○○○○○○ KRW 1,700,700,000,000 won, and the total price of the real estate of this case was KRW 2,700,000,00,00.

Meanwhile, in full view of the aforementioned purport of the argument in the evidence duly adopted by this court, the acquisition value of ○○ was reported as KRW 670 million under the evidence No. 1-2 (a sales contract) as alleged by the Plaintiff, upon reporting the transfer income tax after the resale of the instant real estate, and then reporting the acquisition value to ○○○ as KRW 670 million under the evidence No. 1-2 (a sales contract) as alleged by the Plaintiff. After that, ○○ stated that the purchase price purchased from the Plaintiff in the course of the tax investigation was KRW 850 million, and thereafter, it was acknowledged that the Plaintiff appeared as a witness in this court and testified with the same content. In light of the fact that ○○ initially reported the acquisition value (transfer value of the Plaintiff, etc.) as KRW 670 million as alleged by the Plaintiff in conflict with the Plaintiff in relation to the burden of transfer income tax, it cannot be deemed that the actual acquisition value in the course of tax investigation or this court has considerable credibility.

Furthermore, the above purport is to introduce the sale and purchase between the Plaintiff, etc. and the ○○○’s statement or testimony of the former lessee of the instant building.

Therefore, the Plaintiff’s assertion on the premise that the transfer price of the instant real estate is KRW 670 million is without merit, and the instant disposition is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.