A. Whether Article 52(3) of the Enforcement Decree of the Income Tax Act on the time of acquiring land acquired through a replotting disposition violates the parent law (negative);

(b)the method for calculating gains on transfer where the transferred assets fall under "a specific area at the time of transfer" but do not fall under any such area at the time of transfer;

A. Article 5 subparagraph 6 (a) of the former Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982) provides that no income tax shall be imposed on income accrued from the disposition of replotting itself. Since Article 5 subparagraph 6 (a) of the former Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982) does not stipulate that the date of the disposition of replotting should be deemed the time of acquisition of the land if the disposition of replotting was subsequent to the acquisition of the transferred land, and it does not stipulate that no income tax shall be imposed on the transfer margin from the time of the disposition of replotting from the time of acquisition until the time of the disposition of replotting has been taken. Thus, the time of acquisition of the land acquired through

(b) In the event that the transferred asset at the time of transfer falls under the specific area determined by the Commissioner of the National Tax Service at the time of transfer, the transfer value shall be the value appraised by the multiple factor method, and the acquisition value shall be the standard market value converted by the method determined by the Ordinance of the Ministry of

A. Article 5 subparagraph 6 (a) of the former Income Tax Act (amended by Act No. 3576 of Dec. 12, 1982), Article 53 (3) of the former Enforcement Decree of the Income Tax Act, Article 23 (b) of the Income Tax Act, Articles 45 and 60 of the former Enforcement Decree of the Income Tax Act, Article 115 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12154 of May 8, 1987) (amended by Presidential Decree No. 12767 of Aug. 1, 1989)

A. Supreme Court Decision 87Nu310 Decided May 9, 1989

Plaintiff 1 and one other, Plaintiffs et al., Counsel for the plaintiff-appellant-appellee et al.

head of Sung Dong Tax Office

Seoul High Court Decision 88Gu7950 delivered on November 3, 1988

The part of the judgment below against the defendant is reversed, and the case is remanded to the Seoul High Court.

All appeals by the plaintiffs are dismissed.

The costs of appeal against the dismissed portion shall be assessed against the plaintiffs.

1. Determination on the grounds of appeal by the plaintiffs' attorneys

The purport of Article 5 subparagraph 6 (a) of the former Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982), which was enforced at the time when the 608 square meters of the land transferred in this case, was the land substitution disposition, is that no income tax shall be imposed on the income accrued from the land substitution disposition itself, and that the income tax shall not be imposed on the income accrued from the land substitution disposition if the land category or the lot number is changed or appropriated for the land substitution disposition under the Land Readjustment and Rearrangement Projects Act or the Rural Community Modernization Promotion Act (amended by Act No. 3576 of Dec. 21, 1982). The purport of Article 5 subparagraph 6 (a) of the former Income Tax Act (amended by Act No. 3576 of Dec. 21, 1982) which was enforced at the time when the land substitution disposition was taken after the acquisition of the transferred land. Therefore, the acquisition time of land acquired through a land substitution disposition under the Land Readjustment Projects Act or other Acts cannot be deemed to violate Article 536 (198).

The judgment of the court below with the same purport is just, and there is no ground for appeal.

2. Judgment on the grounds of appeal by Defendant litigation performer (the grounds of supplementary appeal stated in the briefs submitted after the deadline for supplemental appellate brief are examined to the extent of supplement in case of supplemental appellate brief).

A. As to the first ground for appeal:

Nor can we accept the argument on the premise that the court below erred by misapprehending the legal principles on capital gains tax on the premise that the land was contrary to the defendant's confession at the court below that at the time when the plaintiffs acquired the land of this case.

B. As to the second ground for appeal

(1) For the following reasons, the lower court partially accepted the Plaintiffs’ claim seeking revocation of the instant tax disposition, on the ground that the part exceeding KRW 3,309,610 and KRW 661,920, respectively, of the instant tax disposition, which the Defendant imposed KRW 10,568,850 and KRW 2,113,770, respectively, of the transfer income tax, and the defense tax, respectively, on the Plaintiffs as of January 15, 198.

In other words, the court below, after the plaintiffs acquired the land of this case on June 21, 197 and transferred on August 13, 1987, determined that the transfer value and the acquisition value of this case should be calculated based on the standard market price assessed by the method of the rate under Article 115 (1) 1 (a) of the Enforcement Decree of the Income Tax Act and the tax assessment of this case based on it. The court below acknowledged the fact that the land of this case does not fall under the specific area at the time of its acquisition, but at the time of its transfer, the transfer value and the acquisition value are calculated based on the standard market price assessed by the method of the rate under Article 115 (1) 1 (a) of the Enforcement Decree of the Income Tax Act, and determined that the transfer value and the acquisition value of the land of this case should be calculated based on the transfer value of this case, since the land of this case was not at the time of its acquisition but at the time of its transfer to the specific area.

(2) However, Articles 23(4) and 45(1)1 of the Income Tax Act provide that, in principle, the transfer value and acquisition value which form the basis for the calculation of gains on transfer of assets shall be based on the standard market price at the time of transfer of transferred assets and at the time of their acquisition. Article 60 of the same Act provides that the determination of the standard market price under Articles 23(4) and 45(1)1 of the same Act shall be based under the conditions as prescribed by the Presidential Decree. Article 115 of the Enforcement Decree of the Income Tax Act enacted upon delegation shall be based on the rate determined by the Commissioner of the National Tax Service. Article 115 of the same Act provides that the standard market price of land and buildings shall be based on the rate determined by the Commissioner of the National Tax Service for the specific area in which the transfer value under the Local Tax Act is calculated (Article 1(1)1(a) and (b) and Article 45(1)1 of the same Act shall be based on the standard market price at the time of transfer.

(3) Nevertheless, the court below determined that the transfer value and acquisition value should be calculated on the basis of the standard market price of taxation under the Local Tax Act on the grounds that Article 115 (3) of the Enforcement Decree of the Income Tax Act was erroneous as to May 8, 1987, and that the transfer value and acquisition value should be calculated on the basis of the transfer margin calculated on the basis of the value of the standard market price of taxation under the Local Tax Act at the time of its acquisition, and that the tax disposition of this case based on the transfer margin calculated on other methods is unlawful. Thus, the court below did not err in the misapprehension of legal principles as to the transfer income tax, and it is obvious that such illegality has affected the conclusion of the judgment. Accordingly, there is a reason to point out this issue,

3. Therefore, the part of the judgment of the court below against the defendant is reversed, and the case is remanded to the court below for a new trial and determination. All appeals by the plaintiffs are dismissed, and the costs of appeal as to the dismissed part are assessed against the losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Lee Jae-sung (Presiding Justice)