If a land purchaser under Article 3-3 (20) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481 of Dec. 31, 1981) fails to construct a building due to a cause not attributable to himself/herself, the collection of penalty tax under paragraph (22) of the same Article shall be made.

In case where income tax on capital gains is reduced pursuant to Article 3-3 (20) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481 of Dec. 31, 1981), if the purchaser is subject to the reduction of income tax pursuant to Article 3-3 (20) of the same Act, the period prescribed by Article 3-3 (21) of the same Act and Article 2-8 (3) of the same Enforcement Decree (amended by Presidential Decree No. 10670 of Dec. 1, 1981) of the same Act (amended by Presidential Decree No. 10670 of Dec. 1, 1981), i.e., even if the construction of the building is not completed within two years from the purchase date, the cause for failure to complete the construction is expropriation, urban planning, or other provisions of the same Act, and thus,

Articles 3-3(20) through 3-3(2) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 348 of Dec. 31, 1981); Article 2-8(3) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 10670 of Dec. 31, 1981)

Supreme Court Decision 85Nu597 Decided January 21, 1986

Attorney Park Gyeong-chul et al., Counsel for the defendant-appellant

Head of North Korean Tax Office

Seoul High Court Decision 86Gu280 delivered on January 12, 1987

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Where income tax on capital gains is reduced pursuant to Article 3-3 (20) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481, Dec. 31, 1981); the period prescribed by Article 3-3 (21) of the same Act and Article 2-8 (3) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 10670, Dec. 31, 1981); in other words, even if the construction of the building is not completed within two years from the date of purchase, the cause for failure to complete the construction cannot be accepted; if the purchaser cannot be responsible for such failure, it shall not be collected from the purchaser as additional tax, an amount equivalent to the amount of tax reduced pursuant to Article 3-3 (2) of the same Act, and this shall not be interpreted differently because there is no explicit provision (see Supreme Court Decision 85Nu597, Jan. 21, 1986).

In light of the judgment below, the court below determined that the plaintiff purchased the land in this case as a national housing construction site and applied for a deliberation on the location of a privately constructed housing construction project plan to the head of Suwon-si City on January 25, 1981 and applied for a deliberation on the application to the effect that the application is reasonable, but thereafter, the court below determined that most of the above apartment sites of this case were designated as a school site pursuant to the Prime Minister's instruction No. 28 on June 1981, 1981, and that most of the above apartment sites of this case were designated as a school site, and that the above land was determined and announced as a school site pursuant to the Gyeonggi-do Notice No. 30 of January 22, 1982 and No. 94 on March 29, 1983, it was impossible to construct an apartment building on the land incorporated as the above school site, as well as that part of this case's land which was not incorporated into the above school site was legitimate, and it cannot be justified in the judgment below.

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 Yoon Yoon-hee (Presiding Justice)