Cho High Court Decision 2010Du0082 ( October 24, 2010)

Whether it falls under the category of self-farmland for 8 years

There is no evidence to prove that the land was actually used for cultivation at the time of expropriation, and even if there is a building, fraternity, etc. for warehouse use on that part, there is no evidence to prove that the building, fraternity, etc. directly needed for the cultivation of the land at the time of expropriation and used for the cultivation of the land.

Plaintiff Gim-○

Defendant ○ Head of tax office

January 17, 201

January 31, 201

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The Defendant’s disposition of imposition of KRW 49,909,730 for the Plaintiff on October 5, 2009 shall be revoked.

1. Circumstances of dispositions;

A. On February 17, 1988, the Plaintiff completed the registration of ownership transfer on the ground of inheritance by consultation on January 17, 1965 with respect to 00 ○○○○○○○○○○○○, 291-11, 367 m26 m26 m2, and 803 m203 m2 (hereinafter “each of the of the of the of the of the of the instant lands”). After that, each of the instant lands and of the instant lands, and the storage of the block structure, strings, storage, and toilet 26.7 m26 m26 m26 m2, 43.65 m2 m2, 199.32 m2, m2, 5 m2, m298 m20 m2, 49.47 m26 m2, 1967 m2, etc. on each of the instant lands.

B. The Plaintiff reported to the Defendant on October 5, 2009 that the expropriation of each of the instant land and obstacles owned by the Plaintiff constitutes the transfer of one house for one household subject to non-taxation of capital gains tax, and the Defendant denied non-taxation of capital gains tax on one household by deeming that the instant obstacles are not owned by the Plaintiff, while deeming that the portion of 187 square meters out of the land 291-11 and 365.36 square meters out of the land 291-26 among each of the instant land constitutes farmland, and thus, on October 5, 2009, the Plaintiff imposed capital gains tax (including additional tax) on the Plaintiff for 2008 pertaining to the expropriation of each of the instant land by reducing or exempting capital gains tax as a transfer of one’s own farmland for at least eight years.

[Reasons for Recognition] Gap evidence Nos. 7, Eul evidence Nos. 1, 4, and 8 (including paper numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

First, the obstacles of this case are owned by the plaintiff as the plaintiff succeeded to each land of this case. Some of the obstacles of this case are housing, and at the time of expropriation of each land of this case and obstacles, the plaintiff has only one association member's relocation right pursuant to the housing reconstruction project. Thus, the expropriation of each land of this case and obstacles constitutes a transfer of one house for one household subject to non-taxation of capital gains tax.

Second, even if the obstacles in this case did not own the plaintiff and the expropriation of each land and obstacles does not constitute a transfer of one house for one household subject to non-taxation of capital gains tax, the remaining parts of each land in this case excluding the parts recognized as farmland by the defendant among each land in this case constitute farmland, such as agricultural warehouses, stables, etc., and thus the whole land in this case constitutes farmland for not less than eight years, and the expropriation of each land in this case constitutes a transfer of self-arable farmland for not less than eight years.

B. Determination

(1) As to the plaintiff's first argument

Article 89 (1) 3 of the Income Tax Act lists one house for one household (excluding expensive houses the value of which exceeds the standard prescribed by the Presidential Decree) as well as the incidental land within the area calculated by multiplying the area of the land on which the building is built by the ratio as determined by the Presidential Decree by the area of the land, which is one of the non-taxable capital gains under Article 89 (1) 3 of the Income Tax Act. The fact that one house for one household and its appurtenant land meet the non-taxable requirements for capital gains tax as they fall under the transfer of one house

In the instant case, according to the evidence evidence Nos. 1, 2, and 3, the Korea National Housing Corporation: (a) acknowledged that the obstacles in the instant case were owned by sulfurA while preparing a goods protocol for implementing public works around 2007; (b) asserted that the obstacles in the instant case were their own ownership; (c) pursuant to the agreement between the Plaintiff and YellowA, KRW 5,568,110 out of the 12,568,110 as compensation for obstacles in the instant case was paid to the Plaintiff; (d) however, it can be recognized that the remainder was paid to the Plaintiff; (e) however, the building above 291-11 on the land (ware and toilet 26.7 square meters), the owner of which was recorded in the building ledger, had no potential obstacles to the Plaintiff’s residential function at the time of the preparation of the goods protocol of the Korea National Housing Corporation; and (e) there was no lack of evidence to acknowledge that there was a lack of residential capacity in the instant case’s land ownership and payment of the Plaintiff.

(2) As to the second argument by the plaintiff

According to the contents and purport of Article 69(1) of the Restriction of Special Taxation Act, Article 66(4) of the Enforcement Decree of the same Act, and Article 27(1) of the Enforcement Rule of the same Act, farmland subject to reduction or exemption of capital gains tax for not less than eight years is the land actually used for cultivation and the farmland subject to reduction or exemption of capital gains tax refers to the land actually used for cultivation regardless of the land category on the cadastral record as of the date of the transfer, and the land for farming, compost, pumping station, pumping station

In this case, there is no evidence to prove that the remainder of each of the lands in this case, excluding the parts recognized as farmland by the defendant, was actually used for cultivation at the time of expropriation of each of the lands in this case, and even if there is a building, fraternity, etc. for warehouse use on that part, there is no evidence to prove that the building, fraternity, etc. directly needed for cultivation of the land at the time of expropriation, and used for cultivation of the land (the Restriction of Special Taxation Act and the Farmland Act vary from their legislative purpose and purpose, so it cannot be deemed as farmland subject to reduction or exemption of capital gains tax under the Restriction of Special Taxation Act, and it cannot be deemed as farmland subject to reduction or exemption of capital gains tax

3. Conclusion

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