Seoul Administrative Court 2014Gudan3399 ( October 19, 2014)

Seocho 2013west 3669 ( December 04, 2013)

If the acquisition value under the stamp contract applied to a sale case shows a significant difference between the standard market price and the retroactive appraisal price under the Income Tax Act, it may not be applied to a sale case.

It is reasonable to deem that the purchase price stated in each of the approval forms of this case by the co-owners of the land of this case was prepared differently from the actual transaction price, and the disposition of this case was made by applying the sales price stated in each of the approval forms of this case

Article 176-2 (Estimated Decision and Revision)

Article 115 (Determination of Standard Market Price)

2014Nu56408

xAA

Head of Yongsan Tax Office

Seoul Administrative Court Decision 2014Gudan3399 decided June 19, 2014

December 18, 2015

January 22, 2016

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition of correction of KRW 000 of the capital gains tax for the year 2007, which was rendered to the Plaintiff on May 20, 2013, shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On February 3, 1989, the Plaintiff acquired OO2m2 (hereinafter “instant land”) among OO2 (OO-O2) O-O2 (hereinafter “O2”). On September 28, 2007, the Plaintiff transferred it to BBB, etc.

B. On November 30, 2007, the Plaintiff reported and paid the transfer income tax on the instant land. The transfer value is the actual transaction value as the OOO, and the acquisition value was the conversion value on the ground that the documentary evidence was destroyed by fire. The Defendant calculated the acquisition value of the instant land as the OO of the converted value on the ground that the documentary evidence was destroyed by fire. After calculating the acquisition value of the instant land as the amount equivalent to KRW 4,083 per square meter, the Defendant issued a disposition to notify the correction and payment of the transfer income tax including the additional tax on the transfer income tax for the year 2007 (hereinafter “instant disposition”).

C. On August 14, 2013, the Plaintiff filed an appeal for adjudication against it, but received a decision of dismissal from the Tax Tribunal on December 4, 2013.

[Reasons for Recognition] Uncontentious Facts, Gap evidence 1 through 4, Gap evidence 12-1, 2, Eul evidence 1, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) Principal capital gains tax portion

Each sales contract in the name of CCC and DD, which the Defendant used as the basis for business example, is merely a so-called "sale agreement" made in a lump sum for tax convenience. The sales price stated in each of the above sales contracts does not exceed 1/10 of the officially assessed individual land price as of January 1, 1990, and the land price in this case was less than 1/10 of the officially assessed individual land price as of February 3, 1989, because the Plaintiff acquired real estate speculation at the time of February 3, 1989, and the sales price sharply increased in the entire process in which the Plaintiff acquired the ownership in the instant land, and each of the sales contracts in this case cannot be deemed an actual sales contract in light of the custom of approval form as of the time of the instant sales contract.

(2) Even if the principal portion of the disposition of this case is lawful, there is no circumstance or possibility to deem that the Plaintiff was aware of the existence of each of the instant approval agreements. Therefore, it cannot be expected that the Plaintiff report the capital gains tax calculated by calculating the sales price of each of the instant approval agreements by making the sales price of each of the instant approval agreements. Ultimately, there was a justifiable reason not to err by neglecting the duty to report and pay the capital gains tax of this case

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Relevant legal principles

Unless there are special circumstances, the stamp contract prepared by the parties to the transaction and affixed the seal of approval of the head of the Si/Gun, etc. shall be presumed to have been prepared in accordance with the sales contract between the parties, and the assertion that the contract was prepared differently from the actual ones shall be proved (see Supreme Court Decision 93Nu2353, Apr. 9, 193).

(2) Facts of recognition

① On September 10, 198, the FF and DD, the owner of the instant land, entered into a sales contract and the FF and CCC on September 10, 198 with respect to a partial share of the instant land (hereinafter referred to as “each of the instant sales contract”). Each of the instant sales contract was prepared by GGG for employees of the EE judicial affairs office for filing an application for registration. Based on each of the above approval approval agreement, the transfer registration under the name of CCC was completed on February 3, 1989, and the share transfer registration under the name of DD on March 8, 1989 was completed. Meanwhile, on February 3, 1989, the Plaintiff acquired the share of the instant land by completing the registration of transfer of H ownership under the name of H on February 3, 1989, and entered the ownership of the instant land on September 198, 198.

② The sales price of each of the instant approval seal contracts was calculated as KRW 4,083.7 per square meter. Meanwhile, on the other hand, on January 1, 1989, the higher grade of the land publicly notified as of January 1, 1989 is KRW 964 per square meter.

③ The officially assessed individual land price as to the instant land did not exist at the time the Plaintiff acquired the instant land shares, and was publicly announced since 1990, and the individual land price as of January 1, 1990 was KRW 45,000 per square meter.

④ After the GG attended as a witness in the trial, each of the instant approval seal contracts was prepared in writing in order to register real estate and pay the receipts and registration tax. The sales price of each of the above approval seal contracts is recorded as stated by the parties to the sales contract. At that time, GG testified testified that the sales contract for the payment of the receipts and registration tax was ordinarily recorded as the class price of the notice of internal affairs.

⑤ At the time of January 15, 1988, the standard market price, which is the basis for the assessment of the transfer value under the Income Tax Act as of January 15, 198, was designated as a specific area to be computed by applying a specific rate to the standard market price of taxation under the Local Tax Act (the value of land, etc.) (the rate of 6.43 times was applied to the land of which the publicly notified land of this case is 110th class).

④ Meanwhile, on November 9, 2007, DD voluntarily reported and paid the high-amount of capital gains tax exceeding KRW 170,000,000,000 on the acquisition price under the above approval seal agreement.

7) According to the appraisal result by K K Appraisal Corporation at a trial, the market price of the instant land at the time of September 10, 1988 is 14,000 won per square meter.

[Reasons for Recognition] A without dispute, Gap evidence Nos. 8 through 16 (including the number of branch offices), Eul evidence No. 6, the testimony of GG witness GG witness at the trial, the result of the market price appraisal by KK appraisal corporation at the trial, the purport of the whole pleadings

(2) Determination

In full view of the above facts and other evidence revealed in the oral argument, it is reasonable to view that the sales price on each of the instant approval seal agreements and DD, which acquired part of the share of the instant land from FF, was prepared differently from the actual transaction. Therefore, the instant disposition that was taken by applying OOO per m2, the sales price under each of the instant approval seal agreements, as “the sales price” is unlawful.

① According to the Local Tax Act and subordinate statutes enforced at the time of the Plaintiff’s acquisition of shares in the instant land, the tax base of acquisition tax is the value at the time of acquisition, but when there is no indication of an acquirer’s reported or reported value or when the reported value is lower than the publicly notified land value, the value of the land publicly notified as of January 1, 1989 is 967 won per square meter, and thus, the purchase price indicated in each of the instant approval form contract is higher than the publicly notified land value. However, from the buyer’s standpoint, the purchase price indicated in each of the approval forms the tax base of acquisition tax; however, from the seller’s standpoint, the transfer price is calculated based on the standard market price, but it is exceptionally calculated based on the actual transaction price, and the standard market price of the instant land is calculated by multiplying the price of the instant land by the purchase price of KRW 9634,636,965 x 964,64,000,000,000.

In particular, in light of the fact that the standard market price in the calculation of capital gains tax as above is to overcome the practice of reporting at a price significantly lower than the actual market price by lowering the transfer price and securing tax revenue, the standard market price is ordinarily lower than the actual market price, but it is likely that the standard market price would normally be lower than the actual market price. In a case where transfer margin is to be calculated based on the standard market price, the tax amount calculated based on the principle of no taxation without law or prohibition against excessive taxation under the Constitution may not exceed the scope of the transfer margin based on the actual market price (see, e.g., Supreme Court Decision 2005Du12640, Jul. 12, 2007).

② GGG witness GG stated that the approval seal agreement of this case is written in the document of registration in order to carry out the registration of real estate and pay the registration tax. The sales price of each of the above approval seal contracts is recorded as stated by the parties to the sales contract. Since each of the approval seal contracts of this case is not written on the basis of the actual contract prepared by the parties, it is deemed that the contract of this case was made for new registration at the office of a certified judicial scrivener, not on the basis of the actual contract prepared by the parties, the sales price is likely to have been newly determined for the payment of the registration tax. The FF stated that the sale price of the land of this case is D and CCC is 'D' as it is signed and sealed by the parties to the contract prepared by the certified judicial scrivener office, and is not 'the actual sales contract, but 'the contract submitted at the time of payment of acquisition tax and registration' (Evidence A).

③ In addition, according to the result of the appraisal by the K Appraisal Corporation at the trial at the time of September 10, 1988, the market price of the instant land at the time of September 10, 198 is much higher than the purchase price stated in each of the instant approval seal contracts, each of the instant approval seal contracts is deemed to have been prepared differently from the actual ones.

3. Conclusion

Therefore, without examining the remaining arguments of the plaintiff, the plaintiff's claim shall be accepted on the grounds of its reasons, and since the judgment of the court of first instance is unfair on the grounds of its conclusion, it is so decided as per Disposition with the cancellation of the judgment of the court of first instance in the plaintiff's appeal and the cancellation of