Even if the name and form are different, if an appeal seeking the revocation of the disposition is filed, it shall be deemed a legitimate objection.

If a tax authority raises an objection within the period for filing an objection, if the contents of the written objection, not the name and form of the written objection prescribed in the Framework Act on National Taxes, are obviously clear that the written objection is an objection seeking revocation of the initial disposition, the submission of such written objection shall be deemed an objection under the Framework Act on National Taxes,

Article 56 of the Framework Act on National Taxes

2011Guhap1322 Revocation of disposition of imposing capital gains tax

XX

Head of the Tax Office

November 30, 2011

December 28, 2011

1. The Defendant’s imposition disposition of capital gains tax of KRW 119,609,460 against the Plaintiff on December 1, 2009, exceeding KRW 85,565,474, shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. 7/10 of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

The Defendant’s disposition of imposing capital gains tax of KRW 119,609,460 to the Plaintiff on December 1, 2009 or June 22, 2010 is revoked.

1. Details of the disposition;

A. On August 29, 2003, the Plaintiff acquired 38 million won in a 1300-00-00 river of Honghae-gu, Honghae-gu (7,200 square meters among them divided into 00-00 on May 20, 2004). On August 20, 2004, the Plaintiff changed the land category into 300-00 land remaining after being divided into 00-00 square meters, such as filling and cutting of land, and completed registration of preservation of ownership on the land by constructing 32.4 square meters in a 32.4 square-story structure office, one-story structure (mixed) and 33.05 square-story in a 1st floor, one-story in a 2000-00 square-story and 205 square-story in a 2005 square-story.

B. On January 18, 2007, the Plaintiff transferred the instant land and buildings to Nonparty XX Industrial Development Co., Ltd. for KRW 730 million.

C. On December 1, 2009, the Defendant imposed a disposition of KRW 219,121,620 on the Plaintiff on December 1, 2009, the transfer income tax of KRW 219,121,620 on the Plaintiff (hereinafter “the first disposition”).

D. On February 11, 2010, the Plaintiff submitted explanatory data on the initial disposition to Nonparty YA, who is an employee in charge of the Defendant. Accordingly, on June 22, 2010, the Defendant accepted part of the Plaintiff’s assertion and corrected the initial disposition by reduction of KRW 119,609,460 (hereinafter “instant disposition”).

E. The Plaintiff filed an objection against the Defendant on September 15, 2010, but was dismissed, and the Plaintiff filed an appeal with the Tax Tribunal on the same day, but was dismissed on December 29, 2010 on the ground that the period of the appeal was elapsed.

[Basis] Facts without dispute, Gap evidence 1, Eul evidence 2-1, Eul evidence 3-2, Gap evidence 14-1, Eul evidence 14-1, Eul evidence 3-1, Eul evidence 3-2, and the purport of the whole pleadings

2. The plaintiff's assertion is as follows.

In order to acquire the instant land and buildings, the Plaintiff spent water supply facility costs and electricity supply costs, land development costs and permitted service costs, design costs, partition survey costs, land development costs, and other necessary expenses. The instant disposition that did not reflect the real estate brokerage cost in order to transfer the instant land and buildings, is unlawful.

3. Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

4. Judgment on the defendant's main defense

A. The defendant's main defense

The defendant raised the lawsuit of this case seeking the cancellation of the disposition of this case without going through legitimate pre-trial procedures. Thus, the lawsuit of this case is unlawful.

B. Determination

(1) An administrative litigation against a disposition imposing tax may not be filed without going through a lawful request for review or adjudgment and a decision thereon (Article 56(2) of the Framework Act on National Taxes); an objection shall be filed within 90 days from the date (when a notice of disposition is received, the date on which the notice of disposition is received) on which the relevant disposition is known (Articles 66, 66(6), and 61(1) of the same Act); when an objection is filed after going through a request for review, an objection shall be filed within 90 days from the date on which the decision on the objection is notified (Article 61(

An administrative appeal required as a prior trial procedure of an administrative litigation does not require a strict form of filing in light of the fundamental purpose of the appeal system, which is to relieve a person whose right or interest has been infringed due to an unlawful or unfair administrative disposition, and if an objection is filed against a tax authority within the period for filing an objection against a tax disposition, if it is evident that the content of the objection is an objection seeking revocation of the initial disposition even if it is not the name and form of the written objection prescribed in the Framework Act on National Taxes, it shall be deemed that the submission of the document is an objection under Article 66 of the Framework Act on National Taxes (see Supreme Court Decision 97Nu13627, Nov

(2) Comprehensively taking into account the evidence No. 16, evidence No. 17-1, and witness Park Jong-A’s witness’s testimony, the Plaintiff submitted a written objection prepared by the Plaintiff to Nonparty Park Jong-A, who is an employee in charge of the Defendant, on February 11, 2010, the following facts can be acknowledged: (a) Park Jong-A, after examining the above materials, selected and copied the necessary materials; and (b) the original was returned to the Plaintiff; (c) the said written objection contains the location of the instant real estate; (d) the Plaintiff’s name and resident registration number; and (e) the said written objection includes the Plaintiff’s name and resident registration number; and (e) the Plaintiff submitted a written objection because the transfer income tax was imposed on the instant real estate.

According to the above facts of recognition, since it is apparent that the plaintiff submitted the above written objection and expressed his/her intention to object to the initial disposition, even if ParkA received the written objection and copied evidentiary documents attached thereto and returned the original and evidentiary documents to the plaintiff, the plaintiff is deemed to have filed an objection under Article 66 of the Framework Act on National Taxes. Therefore, the disposition of this case constitutes a decision on the plaintiff's objection. Accordingly, the plaintiff filed a petition with the Tax Tribunal within 90 days from the date of the decision of the Tax Tribunal, and the plaintiff filed the lawsuit of this case within 90 days from the date of decision of the Tax Tribunal, and therefore

5. Whether the instant disposition is lawful

(a) Facts of recognition;

(1) The Plaintiff spent KRW 1,865,100 as water supply construction cost, KRW 2,64,40 as electricity supply cost, KRW 567,60 as design cost, KRW 2,500 as design cost, KRW 2,500 as general survey and design cost, KRW 880,00 as building design cost, KRW 67,60 as land development cost, KRW 2,50,00 as general survey and design cost, and KRW 880,00 as building design cost for the purpose of transferring the purpose of use, improvement, or convenience of use of the instant land and building (No. 6, No. 22), and KRW 6,500,00 as real estate brokerage cost to transfer the instant land and building (No. 9-1).

(2) On June 10, 2004, the Plaintiff filed an application for development activities on the instant land with the head of the Northern Port Office, stating KRW 62,400,000 as expected development expenses, and paid KRW 12,400,000, which is 20% of the said amount as a performance guarantee for construction works. At least 62,00,000, the Plaintiff spent at least as the cost of changing the form and quality of the instant land.

(3) If both the costs described in paragraph (1) above and the development costs of the instant land indicated in paragraph (2) above are deemed necessary expenses, the reasonable determined tax amount for the transfer income tax reverted to the year 2007 due to the transfer of the instant land and building to the Plaintiff is KRW 85,565,474.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 5 through 7, Gap evidence No. 9-1, Gap evidence No. 22-1, and 22-2, and the result of fact inquiry to North Korea-Gu Office at the time of the seizure of this court, the purport of the whole pleadings

B. Determination

(1) According to Article 97 (1) of the former Income Tax Act (amended by Presidential Decree No. 8825 of Dec. 31, 2007) and Article 163 (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890 of Feb. 28, 2007; hereinafter referred to as the "former Enforcement Decree of the Income Tax Act"), the necessary expenses to be deducted from the transfer value in calculating the transfer margin of a resident shall be the acquisition value; (1) the capital expenses to be paid for the alteration, improvement or convenience of the use of transferred assets; and (2) the expenses paid directly for the transfer of assets. Meanwhile, according to Article 89 (1) of the former Enforcement Decree of the Income Tax Act, the asset purchased from another person shall be the acquisition value plus the acquisition tax, registration tax, and other expenses.

Inasmuch as the tax authority bears the burden of proving the legality of a taxation, the tax authority bears the burden of proof as a matter of principle, in principle, necessary expenses that serve as the basis of the determination of taxable income. However, deduction of necessary expenses is more favorable to the taxpayer, and most of the facts that serve as the basis of necessary expenses are located in the controlled area of the taxpayer. As such, the tax authority has difficulty in proving it, so it is reasonable to have the taxpayer prove it in light of difficulty in proving it or equity between the parties (see, e.g., Supreme Court Decision 91Nu10909, Jul. 28, 1992).

(2) We examine the following. ① Water supply construction cost, electricity construction cost, land development cost, general survey and design cost of reinforced concrete, construction design cost, construction design cost, and land alteration construction cost of this case constitute capital expenditure, such as cost for the alteration, improvement, or convenience of the use of transferred assets. ② Real estate brokerage cost constitutes necessary expense, which is directly paid for the transfer of assets. Therefore, the Plaintiff’s total necessary cost of KRW 135,457,100 + KRW 1,865,100 + KRW 2,64,400 + land development cost of KRW 567,60 + land development cost of KRW 300 + land development cost of KRW 2,500 + KRW 80,000 + KRW 80,000 with construction cost of reinforced concrete development + KRW 467,50,000 with construction cost of KRW 80,500 with construction cost of this case + KRW 40,500,500 with construction cost of this case’s land alteration and alteration.

6. Conclusion

Therefore, the plaintiff's assertion is justified within the above scope of recognition, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.