Cho High Court Decision 201J2559 ( December 30, 2011)

It is difficult to recognize the transferred land as being a minor one for not less than eight years.

In light of the fact that tax authorities confirmed that neighboring residents have cultivated land when they confirm on-the-spot, sold direct cultivated fish plantations, but failed to submit financial transaction details on the payment of the price, operated a construction enterprise or registered as the representative director of the corporation, and operated a transport enterprise, it is difficult to recognize that the transfer land has been self-sufficient for not less than eight years.

2012Guhap298 Revocation of Disposition of Imposing capital gains tax

Song XX

Head of Jeju Tax Office

December 12, 2012

January 9, 2013

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposing capital gains tax of KRW 000 against the Plaintiff on March 2, 2011 is revoked.

1. Details of the disposition;

A. The Plaintiff completed the registration of ownership transfer on February 4, 1993 with respect to the registration of ownership transfer on the same 000 square meters of 1,608 square meters in Jeju-si, and on June 16, 2008 with respect to the same 000 square meters of 93 square meters, and around February 2003, the Plaintiff divided the 163 square meters of 000-3 square meters of XX Dong-dong 000, into 000-3 (hereinafter “each of the instant land”), and the Plaintiff transferred each of the instant land to thisA on May 8, 2009.

B. On May 23, 2009, the Plaintiff filed a return on capital gains tax with no tax amount to be paid after reduction of capital gains tax as the Plaintiff directly cultivated each of the instant land for at least eight years.

C. On March 2, 2011, the Defendant denied the reduction or exemption of capital gains tax for the Plaintiff on the ground that “it is difficult to view that the Plaintiff was making a self-defluence of each of the instant land for at least eight years” and subsequently excluded the special deduction for long-term holding, thereby correcting and notifying KRW 000 of capital gains tax for the year 2009 (hereinafter “instant disposition”).

D. The Plaintiff filed an appeal with the Tax Tribunal on July 13, 201, but was dismissed on December 30, 2011.

[Ground of recognition] Each entry of Gap evidence Nos. 1, 2, 4, Eul evidence Nos. 1 and 2 (including evidence with a serial number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

As seen below, since the Plaintiff cultivated each of the instant lands into farmland for not less than eight years from the time of acquisition to May 8, 2009, income from the transfer of each of the instant lands constitutes an exemption from capital gains tax. Nevertheless, the instant disposition imposing capital gains tax on the Plaintiff on a different premise is unlawful.

(1) Around 1999, the Plaintiff installed agricultural water on each of the instant land. From 2002 to 2004, HaB from 2002 to 2004, the Plaintiff sold each of the instant land to the Audit Committee from 2005 to 2007, and the Plaintiff had been doing dry field upon request from DoD who owns the agricultural machinery.

(2) After acquiring each of the instant land, the Plaintiff filed an application for membership with the Agricultural Cooperative (hereinafter “Agricultural Cooperative”). However, the Plaintiff did not permit membership with the board of directors on the grounds that the farmland area owned by the Plaintiff is small, and did not become a member. Therefore, the Plaintiff purchased agricultural chemicals, etc. from the Jeju Agricultural Cooperative Sub-Support Center in the name of Jeju Agricultural Cooperative Co., Ltd. in the name of the mother of Ma

(3) The Plaintiff had a certificate of qualification for civil engineering engineer, and was registered as a director and representative director of the XX company from December 1994 to October 2007, and the above company actually operated the Plaintiff’s her her her her her her her her her her and her her her her her her her her her hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers hers

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) From February 15, 1994 to January 7, 1995, the Plaintiff was registered as a business entity of the 'P subparagraph' of fishing vessel from July 1, 2003 to December 11, 2003, and from July 5, 2009 to from February 15, 1994 to July 13, 2000, the Plaintiff was registered as a business entity of the 'P subparagraph' of transportation chain from July 5, 2009 to the date of Jeju.

(2) From September 13, 2001 to October 11, 2007, the Plaintiff was registered as the representative director and director of XX enterprise corporation for the purpose of water supply and drainage, soil and public business, etc., and was the largest shareholder of the said company as of December 31, 2009.

(3) The mother FF purchased agricultural chemicals, etc. from April 1, 2003 to December 6, 2004, from February 4, 2008 to December 10, 2008 at Jeju City Agricultural Support Center.

(4) On July 1998, the letter of certification (Evidence No. 14-1) prepared by GoGG operating 'OO', the 'Irre, at the Plaintiff's request, filled up a stone-to-land unit in XX 000 dong-dong, and he completed the above construction around October 199, and on July 198, each land of this case was in a state in which it was impossible to stop farming due to the high-speed of the river."

(5) The Plaintiff’s birth, as her mother, written confirmation (Evidence A No. 11) by SongH, the representative director of the company XX company, stated that “the Plaintiff had the relevant certificate of qualification and was registered as a director, but did not participate in the company’s management at all as it was engaged in the construction site only.”

(6) The Jeju-si Agricultural Cooperative shall meet the qualification requirements for its members, providing that farmers (a person operating or cultivating farmland of not less than 1,00§³, and a person engaged in agriculture for not less than 90 days a year) who have a domicile, residence, or place of business within the territory of the principal association and a person engaged in agriculture for more than 1,00§³ and the principal office within the territory of the association shall be limited to agricultural partnership or agricultural company that operates agriculture, and a person engaged in agriculture for more than 90 days using leisure time shall not be admitted as its members. A person who intends to join the said association shall submit to the Jeju-si Agricultural Cooperative a written application for membership, farmland ledger, a certified copy of resident registration, and a copy of the resident registration certificate, as well as documents evidencing the purchase of agricultural materials for farmland area, agricultural products sales

[Ground of recognition] Each entry of Gap evidence Nos. 7, 11, 14, Eul evidence Nos. 4, 6, and 7 (including additional evidence Nos. 4, 6, and 7), and the purport of the whole pleadings

D. Determination

In light of the following circumstances, it can be acknowledged that the Plaintiff is engaged in cultivating a spawn, etc. in each of the instant land for at least eight years or did not cultivate a spawn, etc. with 1/2 or more of the farming work with his own labor, and thus, the Plaintiff’s assertion is without merit.

(1) The Defendant’s public official in charge confirmed that neighboring residents cultivated each of the instant land. It is difficult to readily conclude that the Plaintiff directly cultivated the instant land solely on the ground that the Plaintiff performed a stone shed construction on each of the instant land or installed agricultural waterworks.

(2) The Plaintiff asserted that the Plaintiff did not permit the membership of the board of directors on the ground that the farmland area owned by the Plaintiff is small. However, the Plaintiff stated in the warden that the Plaintiff was not a partner because it failed to meet the “1,500 square meters or more of the farmland owned by the agricultural cooperative member qualification” and that the Plaintiff was not a member, but the Plaintiff reversed the assertion as above, and the Defendant submitted data on the qualification requirements of the agricultural cooperative member of the Jeju Agricultural Cooperative, and the Jeju Agricultural Cooperatives prescribed the Plaintiff as “a person operating or cultivating farmland of not less than 1,00 square meters of the qualification requirements for the cooperative member,” even if the Plaintiff satisfied this qualification requirements, it is difficult to readily understand that the Plaintiff did not permit the membership on the ground that the farmland area owned by the Plaintiff is

(3) The plaintiff asserted that he cultivated each of the lands of this case since around 1993 after acquiring each of the lands of this case, and the entries of the certificate of cultivation (Evidence No. 6) and the witness statement (Evidence No. 19) prepared by Doddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd

(4) The Plaintiff alleged that HaB and the GangwonCC sold spawals, etc. from 2002 to 2007, and purchased agricultural chemicals, etc. in the name of F in the name of F, and that each entry of MaE, HaB, and the document of confirmation or fact confirmation (Evidence A No. 8, No. 10-1, and No. 10-2) and witness HaB’s testimony conforms to the above argument. However, HaB testified that the Plaintiff did not have paid spawals to the Plaintiff while purchasing spawals from the Plaintiff, and the Plaintiff did not submit the financial transaction details as above, and each of the above allegations and evidence are difficult to believe. Furthermore, the Plaintiff did not explain whether spawals purchased agricultural chemicals, seeds, or hairs for a period other than 203, 2004, and 2008, and did not explain how spawals were cultivated for a period other than 207 years.

(5) The plaintiff was registered as a director or representative director of the XX company as the majority shareholder of the XX company. The plaintiff was registered as the business operator of the XX company from July 2009 when the transfer of each of the lands of this case was made. In particular, the plaintiff stated that the plaintiff was not involved in the management of the XX company in the relation that the plaintiff was engaged only in the construction site, and that the plaintiff had installed the water supply of each of the lands of this case around 1999 or 200. The plaintiff was admitted to the civil engineering division of the XX university in 198, and it was related to the plaintiff who was attending the same department, and it was difficult for the plaintiff to know that the plaintiff was operating the company at that time or at that time that the construction was made, and that the plaintiff was engaged in growing or maintaining the land of this case, and it was difficult for the plaintiff to have done the construction work at each of the plaintiff's own time or the construction work at the time of installing the above waterworks.

3. Conclusion

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