National High Court Decision 2008J 2673 ( October 08, 2008)

Land used for motor vehicle maintenance business shall not be classified as storage, etc.

Land within 120/100 of the maximum area used for the storage and management of goods each year with storage, etc. separately used for the storage and management of goods, shall be excluded from land for non-business, but land used for motor vehicle maintenance business shall not be applicable thereto.

The contents of the decision shall be the same as attached.

Article 168-11 (Scope of Other Land Used for Business)

1. The plaintiff's claim is dismissed.

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

The defendant's rejection disposition against the plaintiff on June 27, 2008 shall be revoked.

1. Details of the disposition;

A. On June 21, 2007, the Plaintiff sold 1,681 square meters (hereinafter “instant land”) prior to 153-2, Suwon-si, Suwon-si, ○○○○-dong, 153-2, 153-2, and reported and paid capital gains tax on July 26, 2007 on the premise that the instant land constitutes non-business land.

B. On April 10, 2008, the Plaintiff filed a request for correction of capital gains tax on the ground that the land in this case was owned for not less than 20 years under Article 168-14(3)2 of the Enforcement Decree of the Income Tax Act, and does not constitute land for non-business use. However, the Defendant rejected the Plaintiff’s request for correction on June 27, 2008 (hereinafter “instant disposition”).

C. The plaintiff appealed and filed an appeal with the Tax Tribunal on July 24, 2008, but was dismissed on October 9, 2008.

[Ground of recognition] Facts without dispute, Gap evidence 2, Eul evidence 1 to 3, each entry in 2 and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Since the Plaintiff owned the instant land by inheritance around 1931 and used it as farmland for a period exceeding 94% during the total ownership period, it cannot be deemed as non-business land.

(2) On December 28, 2002, the Plaintiff leased the instant land to Lee ○-jin, who operated a motor vehicle maintenance plant, for the purpose of the storage space in which the motor vehicles and construction heavy equipment are stored. Since the Plaintiff used the instant land as land annexed to the storage space and the building for storage until it was transferred to ○○ City Development, it cannot be deemed as land for non-business use.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Determination on the first argument

Pursuant to Article 104-3 (2) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21062 of Oct. 7, 2008), Article 168-14 (3) 2 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21062 of Oct. 7, 2008) provides that the land transferred until December 31, 2009, which is farmland, forest land and stock farm land owned for not less than 20 years prior to December 31, 2006, shall not be deemed land for non-business use. The video of the evidence No. 5, alone, is insufficient to recognize that the Plaintiff owned the land of this case as farmland for not less than 20 years prior to December 3

(2) Judgment on the second argument

According to Article 104-3 (1) 4 (c) of the Income Tax Act (amended by Act No. 8825 of Dec. 31, 2007), Article 168-1 (1) 7 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20720 of Feb. 29, 2008), land less than 120/100 of the maximum area used for the storage and management of goods every year as a storage, open storage, storage, etc. separately installed and used for the storage and management of goods does not constitute land for non-business purpose. According to the evidence No. 6-1 through 3, evidence No. 7-1, 8, and evidence No. 9-1 through No. 3 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20720 of Feb. 28, 2008), it is recognized that the Plaintiff had no other reason to recognize that the land was used for the purpose of No. 17 of this case No. 81 merely because it was leased from Seoul. 1.

(3) Therefore, the instant disposition that the Defendant rejected the Plaintiff’s request for correction of capital gains tax by deeming the instant land as non-business land 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.