The case holding that although the building and site were transferred on the condition that the building and site of the repair work should be demolished, the repair cost shall be regarded as the installation cost or improvement cost to be deducted in calculating gains on transfer.

When the Plaintiff decided to rent the instant building site to a third party and sold it to the Incorporated Association, which is a site for the building that performed repair work, by inserting expenses equivalent thereto, the head of a tax office, etc. obtained the opinion that the Plaintiff may deduct expenses, etc. for the repair of the building from the transfer income tax when calculating the transfer income tax. In the sales contract, the purchaser agreed to remove the building and deliver the instant building site since the said building is not necessary. In determining the purchase price, if considering the cost of removal and repair of the building that the Plaintiff was to bear, and the penalty for breach of contract due to the cancellation of the lease contract, it shall be deemed that the instant building site and the building were included in the subject matter of the transfer even if the transfer was subject to the condition that the building be demolished, and the construction cost for the repair of the building is the necessary expenses or improvement expenses to be deducted from the transfer

Article 45 (1) 2 of the Income Tax Act, Article 94 (2) of the Enforcement Decree of the Income Tax Act

Attorney Kim Jong-won et al., Counsel for the defendant-appellant

Head of Hongsung Tax Office

Seoul High Court Decision 89Gu7995 delivered on May 31, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

As to the ground of appeal by Defendant Litigation Performers

According to the reasoning of the judgment below, the court below found, based on evidence, that the plaintiff acquired 629 square meters and above ground buildings from 105-1, 105-1, 629 square meters and 22,14,500 square meters and transferred them to the non-party association 38 million won on June 7, 1984. The plaintiff originally decided to lease the above building to the non-party Hadju, which included expenses equivalent to the above building's expenses in May 1984, and the above building was repaired at the completion of the repair work. The above construction was just in the process of finding that the building site was the most suitable site for employees of Hong tax office, and that the building was removed from the building site of this case under the condition that the non-party 2 should be deducted from the sale contract of this case as necessary expenses for the removal of the above building site in light of the legal principles as to the removal of the building site of this case, and that the sale contract of this case should not be approved by the plaintiff.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yoon Young-young (Presiding Justice)