Seoul Administrative Court 2012Gudan23085 ( October 14, 2013)

Seocho 2012west 1491 (Law No. 126, 2012)

It shall not be deemed that the land has been self-satisfed for at least eight years, and it shall not be deemed that the sales contract has been terminated.

There is no evidence to prove that the Plaintiff and the Plaintiff’s biological mother jointly owned the instant land and cultivated the instant land, and if the sales contract was terminated by agreement, it would lose its validity and not transfer its assets. However, it is insufficient to recognize that the instant sales contract was terminated by agreement.

2013Nu21306 Revocation of Disposition of Imposing capital gains tax

KimA

Head of Geumcheon Tax Office

Seoul Administrative Court Decision 2012Gudan23085 decided June 14, 2013

May 13, 2014

May 27, 2014

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance is revoked, and the defendant revoked the disposition of imposition of the capital gains tax belonging to the year 2010 against the plaintiff on September 7, 2011.

1. Details of the disposition;

This Court's explanation is based on Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act, since the reasoning of the judgment of the court of first instance is the same as that of the judgment of the court of first instance.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

"(1) Since the Plaintiff (1) was attending a high school or worked for BB Automobile Co., Ltd. from September 12, 1990 after the acquisition of the instant land, and constantly cultivated or cultivated not less than 1/2 of the instant land with his own labor, the instant land constitutes an exemption from capital gains tax under Article 69(1) of the Restriction of Special Taxation Act, and (2) the Plaintiff, the Plaintiff’s biological mother, and the Plaintiff’s biological mother jointly owned the instant land, and the Plaintiff’s biological mother cultivated agricultural crops on a regular basis in the instant land. Thus, the instant land constitutes exemption from capital gains tax under Article 69(1) of the Restriction of Special Taxation Act, and (3) the Plaintiff concluded a sales contract to sell the instant land owned by the Plaintiff toCC (hereinafter “the instant sales contract”), but the Plaintiff, the buyer, did not perform its obligation to pay the purchase price, and thus, the Defendant again agreed to cancel the instant sales contract and completed the registration of ownership transfer in the Plaintiff’s name, a joint owner of the instant land.

It is as shown in the attached Table related statutes.

C. Determination

(1) Determination on the first argument

According to Article 69(1) of the Restriction of Special Taxation Act and Article 66(1) and (13) of the Enforcement Decree of the same Act, the Plaintiff shall directly cultivate the instant land while residing in a Si/Gun/Gu where the instant land is located, a Si/Gun/Gu adjacent to the relevant farmland location, or an area within 20km in a straight line from the instant land for at least eight years in order to obtain reduction of capital gains tax. “Direct cultivation” refers to a resident who engages in cultivating crops or growing perennial plants on his own land at all times or with 1/2 or more of farming work on his own labor. In addition, the burden of proving that the Plaintiff directly cultivated the transferred land as a requirement for reduction of capital gains tax on his own land is not sufficient to prove that the Plaintiff did not directly respond to the aforementioned requirement for reduction of capital gains tax (see, e.g., Supreme Court Decision 94Nu996, Oct. 21, 1994).

(2) Judgment on the second argument

Inasmuch as there is no evidence to prove that the Plaintiff and the Plaintiff’s biological mother jointly owned the instant land, this part of the Plaintiff’s assertion is without merit without further examination.

(3) Judgment on the third argument

The false capital gains tax is imposed on the premise that the transfer of assets and income accrued therefrom are subject to taxation. If the sales contract was rescinded by agreement, the effect of the sales contract would be lost and the transfer of assets would not take place (see Supreme Court Decision 92Nu944, Dec. 22, 1992). Thus, it cannot be deemed that there was the transfer of assets, which are taxation requirements of capital gains tax (see Supreme Court Decision 92Nu9944

"In the case of this case, it is insufficient to recognize that the sales contract of this case was terminated by agreement only with Gap evidence No. 12, and there is no other evidence to acknowledge that the sales contract of this case was terminated by agreement. Rather, the following circumstances, which are acknowledged by considering Gap evidence No. 10, Eul evidence No. 5-1, No. 2, Eul evidence No. 6, and No. 8, the whole purport of pleadings, i.e., (i) if the sales contract is terminated, the buyer's future cancellation of the ownership transfer registration is a normal method of recovery of ownership. However, on May 6, 2010 due to the sales contract of this case, the transfer registration of ownership was terminated on Oct. 7, 2011, which was not the plaintiff, and on Oct. 5, 2011, the transfer registration of this case was completed between the plaintiff and the Ministry of Land, Transport and Maritime Affairs.

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and it is so decided as per Disposition.