Suwon District Court 2008Guhap1441 (209.03)

National High Court Decision 2008J 2673 ( October 08, 2008)

Whether land falls under the land for storage related to non-business land

Land such as depository, etc. is not necessarily premised on the premise that it is a site, but should be determined depending on whether the use is a land separately used for the storage and management of goods, regardless of the existence of a building on the ground.

The contents of the decision shall be the same as attached.

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's rejection disposition against the plaintiff on June 27, 2008 shall be revoked.

1. Circumstances of the disposition;

The following facts are not disputed between the parties, or may be acknowledged by considering the whole purport of the pleadings in each entry in Gap evidence 1, 2, and Eul evidence 1 to 3, respectively:

A. On June 21, 2007, the Plaintiff sold 1,681 square meters (hereinafter “instant land”) prior to 153-2, Suwon-si, Suwon-si, 153-2, Suwon-si, the Plaintiff reported and paid KRW 1,253,057,560 on July 26, 2007 on the premise that the instant land constitutes non-business land.

B. On April 10, 2008, the Plaintiff asserted that the land of this case was not owned for 20 years or more under Article 168-14 (3) 2 of the Enforcement Decree of the Income Tax Act, and filed a request for correction of transfer income tax, but the Defendant rejected the Plaintiff’s request for correction on June 27, 2008 (hereinafter “instant disposition”).

C. The plaintiff appealed and filed an appeal with the Tax Tribunal on July 24, 2008, but was dismissed on October 9, 2008.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

On December 28, 2002, the Plaintiff leased the instant land to B for the storage of automobiles and construction-related equipment to DRB, which operated a car maintenance plant, and before the Plaintiff transferred the instant land to DD Urban Development Co., Ltd., the Plaintiff used the instant land as the land annexed to the storage and warehouse while installing a building on the instant land and operating a car maintenance business center. Thus, it cannot be deemed as non-business land.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) According to Article 104-3 (1) 4 (c) of the Income Tax Act and Article 168-11 (1) 7 of the Enforcement Decree of the Income Tax Act, land not exceeding 120/100 of the maximum area used for the storage and management of goods each year as a storage, open storage, storage, etc. installed and used separately for the storage and management of goods shall not be deemed land for non-business use. Meanwhile, Article 168-11 (1) 7 of the Enforcement Decree of the Income Tax Act provides that land of storage, etc. shall include land of storage, etc., a building for which a building permit is obtained or a report is required to be made under the Building Act and the land attached to a warehouse for the storage and management of goods is naturally excluded from land for non-business use. Thus, land such as storage, etc. is not necessarily premised on the premise that it is a site for non-business use, but should be determined depending on whether it is separately installed and used for the purpose of storage and management of goods, regardless of whether the building exists.

(2) In full view of the purport of the entire pleadings and arguments as to this case’s health zone, Gap evidence 6-1 to 3, Gap evidence 6-1 to 7-2, Gap evidence 8, Gap evidence 9-1 to 3, the plaintiff entered into a lease contract with Eul on December 28, 2002, setting the lease period of the land of this case as 1 year and 15 million won per year, and thereafter, this contract was renewed before the plaintiff disposes of the land of this case, and this Eul operated the automobile maintenance business under the trade name of "CC Industry Corporation" with an unauthorized building (container) installed in the part of this case’s land and used the remainder of the land for the parking lot. According to the above recognition, it is difficult to view that this case’s land was installed in order to operate the automobile maintenance business on the land of this case, and there is no other evidence to acknowledge that this case’s land was used for the storage and management of the land of this case as the storage site.

Therefore, there is no reason for the plaintiff's proposal that the land in this case was used as a storage, etc.

3. Conclusion

Therefore, the judgment of the court of first instance is just, and it is judged the same as the order to dismiss the plaintiff's appeal.