The meaning of a case where the transfer value and acquisition value under Article 59-2 (3) of the Corporate Tax Act are unclear.

"Where the transfer value and acquisition value are unclear" in Article 59-2 (3) of the Corporate Tax Act shall include not only where the transfer value and acquisition value are unclear, but also where only one of the two values in equity are unclear.

Article 59-2(3) of the Corporate Tax Act

Supreme Court Decision 81Nu200 Decided December 13, 1983, 86Nu935 Decided October 28, 1986, Supreme Court Decision 86Nu671 Decided October 26, 1987

Attorney Go Jae-ho, et al., Counsel for the defendant-appellant

The director of the tax office.

Seoul High Court Decision 86Gu1323 delivered on June 1, 1987

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

According to Article 59-2 (3) of the Corporate Tax Act, where the transfer value and the acquisition value are unclear in calculating gains on transfer which are the tax base of special surtax, the transfer value and the acquisition value according to the standard market price prescribed by the Presidential Decree shall be determined respectively. Based on this provision, Article 124-2 (6) of the Enforcement Decree of the same Act provides that "the standard market price provided for in Article 59-2 (3) of the same Act shall be determined based on the standard market price provided for in Article 115 of the Enforcement Decree of the Income Tax Act". Article 59-2 (3) of the same Act provides that "Where the transfer value and the acquisition value are unclear, the transfer value and the acquisition value are not clear, as well as where only one of the two values of equity are unclear (see, e.g., Supreme Court Decisions 81Nu200, Dec. 13, 1983; 86Nu671, Oct. 26, 1987)

Therefore, the court below is just in holding that the transfer and acquisition value of each real estate of this case should be based on the standard market price calculated in accordance with Article 115 (1) 1 (b) of the Enforcement Decree of the Income Tax Act in calculating the transfer margin of this case whose acquisition value is unclear, and it is not erroneous in the misapprehension of legal principles as to the calculation of transfer margin such as theory of lawsuit.

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 Lee Lee-hee (Presiding Justice)