1. The defendants' appeal is dismissed.

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

Purport of claim and appeal

1..

1. The reasoning of the court's explanation concerning this case is as stated in the part of the judgment of the first instance except for adding the judgment of the second instance under Paragraph 2 below, thereby citing this as it is in accordance with the main sentence of Article 420 of the Civil Procedure Act.

2. The portion to be determined additionally

A. Defendants’ assertion (1) The Defendants are value-added tax-free business operators.

The first, the main complex building located in Nam-gu Incheon Metropolitan City E, F, and G (hereinafter “instant building”) newly built by the Defendants, is a house of national housing scale as prescribed by Article 2 subparagraph 6 of the Housing Act.

Since construction services for housing below national housing scale are exempt from value-added tax pursuant to Article 106 (1) 4 of the Restriction of Special Taxation Act and Article 106 (4) 2 of the Enforcement Decree of the Restriction of Special Taxation Act, D also is exempt from value-added tax.

Since both the Defendants and D are not liable to pay value-added tax, the Defendants are obliged to pay the construction cost of KRW 4,568,400,000 to D without value-added tax.

Since the Defendants paid KRW 4,568,231,80 among these, the unpaid construction cost is only KRW 168,200.

② Since the Plaintiff received KRW 8 million from the auction disposal of movable property owned by Defendant B, the said money should be deducted from the claimed amount.

B. (1) Determination (1) We examine the defendants' above assertion (1).

Value-added tax shall be exempted on the supply of goods or services for national housing prescribed by Presidential Decree and the construction services of such housing (see Article 106 (1) 4 of the Restriction of Special Taxation Act). The term "national housing prescribed by Presidential Decree" means housing the area of which is not more than 85§³ per house or household, the area of which used exclusively for residential purposes, is not more than 85 square meters

(See Article 106(4)1 and 2 of the Enforcement Decree of the Restriction of Special Taxation Act, Article 51-2(3) of the Housing Act, Article 2 subparag. 6 of the Housing Act, and Article 4(4)4 of the Enforcement Decree of the Restriction of Special Taxation Act, Article 106(4)1 and 2 of the Act, and Article 2 subparag. 14 of the Housing Act