Busan District Court 201Guhap21 (No. 22, 2011)

Cho High Court Decision 2009Da3972 ( October 11, 2010)

Since it is recognized that a third party purchases and sells land solely, the disposition based on the premise that the land is owned is illegal.

Although the down payment, etc. at the time of purchase of land was withdrawn from the Plaintiff’s account and paid, it seems that it lent the land purchase fund to a third party who is the actual purchaser, the third party is deemed to have purchased the land solely, and the sale price is deemed to have been used by the third party for purchasing other land, etc., so the disposition imposing capital gains tax

2011Nu3760 Revocation of Disposition of Imposing capital gains tax

XX Kim

Head of North Busan District Tax Office

Busan District Court Decision 2011Guhap21 Decided September 22, 2011

July 13, 2012

July 27, 2012

1. The defendant's appeal is dismissed.

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

1. Purport of claim

The disposition of imposition of capital gains tax of 000 won for the year 2003, which the Defendant rendered to the Plaintiff on March 19, 2009 (the Plaintiff reduced the purport of the claim in the trial by the Defendant’s correction of reduction on June 15, 2012).

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Details of the disposition;

A.1) On November 7, 2008, the Director of the Busan Regional Tax Office issued a prior notice of taxation of KRW 000 of transfer income tax for the year 2003 on the ground that the formerA acquired 000 m2,975 m2 (hereinafter referred to as the “instant land”) from the Busan Gangseo-gu Busan Metropolitan Government on December 11, 2002, and reported 000 won to thisB on May 10, 2003.

2) On December 12, 2008, the formerA filed a request for pre-assessment review with the director of the Busan Regional Tax Office, asserting that he is not the actual owner of the instant land, and the director of the Busan Regional Tax Office, on December 26, 2008, determined that the former Director of the Busan Regional Tax Office would re-examine the actual owner of the instant land and rectify the tax base and tax amount according to the result.

B. 1) After the reinvestigation, the commissioner of Busan Regional Tax Office determined that the instant land was jointly purchased and jointly purchased by the Plaintiff and UCC, and held that the sale price was held in title trust with the formerA, and determined the Plaintiff’s transfer price of KRW 000 and the transfer price of UCC as KRW 000 and notified the Defendant of taxation data.

2) Accordingly, on March 19, 2009, the Defendant imposed each transfer income tax of KRW 000 on the Plaintiff and KRW 000 on the UCC.

C.1) On May 26, 2009, the Plaintiff filed an objection against the above disposition of imposition with the Director of the Busan Regional Tax Office as the land of this case is owned solely by the UCC. On June 25, 2009, the Director of the Busan Regional Tax Office decided on June 25, 2009 that the Plaintiff would re-examine the actual owner, etc. of the land of this case and

2) As a result of the reinvestigation, the Director of Busan Regional Tax Office determined that the instant land was owned by the Plaintiff itself and notified the Defendant of the results of reinvestigation, contrary to the Plaintiff’s assertion.

D. Accordingly, on July 31, 2009, the Defendant revised that the transfer income tax for the year 2003 following the transfer of the instant land was reduced from KRW 000 to KRW 000 (the transfer value was increased by KRW 000 as a result of re-survey, but the transfer income tax was reduced by the reduction of KRW 000 as the acquisition value and necessary expenses increased higher.).

E. On June 15, 2012, the Defendant again decided that the instant land was owned by the Plaintiff and UCC, and that the Plaintiff’s share was 42.59% (the percentage of 000 won deposited in the deposit passbook in the name of leD out of 000 won in the purchase price of the instant land, as seen in the front and rear), and that the transfer income tax for the year 2003 following the transfer of the instant land was corrected from 000 to 000 won (hereinafter “the disposition of this case”).

[Ground for recognition] Unsatisfy

2. Whether the instant disposition is lawful

A. The parties' assertion

1) Plaintiff

The land of this case was purchased by UCC alone and title trust to EPA, and the Plaintiff only lent purchase funds to UCC on November 6, 2002 when UCC purchases the above land, and only lent KRW 00 on December 9, 2002, which is the remainder payment date, to UCC.

Therefore, the instant disposition based on the premise that the Plaintiff is the actual owner of the instant land is unlawful.

2) Defendant

A) The purchase price of the instant land is KRW 000, and the Plaintiff paid the said price (the check withdrawn from the deposit account of UCC, or UCC claimed that the Plaintiff lent the said money to the Plaintiff, and the Plaintiff paid to the seller, which led to the Plaintiff’s endorsement by its own name, the said KRW 00 shall be deemed to have been paid by the Plaintiff), and the said land was deposited into the deposit account in the name of leD managed by the Plaintiff out of KRW 000,000, out of the sale price of the said land. In full view of the fact that the said land was deposited into the deposit account in the name of leD managed by the Plaintiff, the said land was purchased by the Plaintiff alone and trusted to the formerA. Since the Plaintiff was the actual owner of the said land

B) Even if the instant land is not owned by the Plaintiff alone, comprehensively taking account of the fact that KRW 000 out of the purchase price of the instant land is the Plaintiff’s funds, and KRW 000 out of the sale price of the said land was deposited in the deposit account in the name of leD managed by the Plaintiff, the instant land is jointly purchased by the Plaintiff and UCC. The Plaintiff’s share in the Plaintiff’s sale price is 42.59%, which is the percentage of the amount deposited in the deposit account in the name of leD, the Plaintiff’s borrowed account. Thus, the instant disposition is not unlawful.

(b) Fact of recognition;

1) The source of the instant land purchase fund

A) The purchase price of the instant land is KRW 000, and the down payment of KRW 000 on November 6, 2002, the contract date, and KRW 000 on December 9, 2002, was paid.

The down payment amount of 000 won was withdrawn from the Plaintiff’s deposit account, which is the Plaintiff’s land, and 000 won out of the remainder is the checks (Plaintiffs 000, leD000, E00 won, E00 won) deposited from the deposit account of the Plaintiff, leD, and E (the Plaintiff’s current address, even though the Plaintiff was the Plaintiff’s seat at that time). The remainder is two pages of the check issued with the funds deposited from the deposit account of the UCC and the UF, which is the Plaintiff’s children, and each cashier’s checks are endorsed by the Plaintiff.

B) On October 23, 2009, GoGG, which arranged the purchase and sale transaction of the instant land, was investigated by a witness at the Busan District Prosecutors' Office (hereinafter "Investigation Agency"). At that time, on the grounds that the Plaintiff’s endorsement was made with respect to the said cashier’s checks issued in the UCC deposit account on the date of the remainder payment, the UCC first sold the said cashier’s checks to the real estate office and the said cashier’s checks, and then paid the remainder to the Plaintiff. Since the Plaintiff later brought about KRW 00, it did not sell the said cashier’s checks to the Plaintiff, the Plaintiff refused the endorsement and demanded again the endorsement on behalf of the UCC.

2) Reversion of the instant land sales price

A) The sale price of the instant land was KRW 000, and the down payment was paid in KRW 000 on March 18, 2003, the contract date, KRW 000, the intermediate payment of KRW 000 on April 10, 2003, and KRW 000 on May 10, 2003.

B) Of the down payment of KRW 000 on March 18, 2003, the deposit amount of KRW 000 was deposited into each deposit account of the UCC (00 won was deposited into the National Agricultural Cooperative Federation 0000-56-0000; KRW 000 was deposited into the same National Federation 000-52-00000), and KRW 000 was deposited into the deposit account of HH (the Buyer’s agent) respectively.

On the other hand, the UCC withdrawn 000 won from the above deposit account deposited on March 28, 2003, and paid as part of the purchase price of land in Gangseo-gu, Busan, which purchased 000 won from CheongK.

C) Of the intermediate payment of KRW 000 on April 10, 2003, KRW 000 was deposited into the UCC’s account, and KRW 000 was deposited into the real estate intermediary’s account, respectively.

On the other hand, the UCC issued a cashier's check on April 22, 2003 at the above deposit account with the above KRW 000 won deposited and delivered to the Busan Gangseo-dong 0-11 purchase price of land that was purchased from EO on March 22, 2003. The above cashier's check is the plaintiff's endorsement (the plaintiff's endorsement on the above cashier's check is followed).

D) On May 10, 2003, 000 won out of the remainder 000 won was deposited in the UCC’s deposit account respectively.

On May 12, 2003, the UCC deposited a total of KRW 000,000 borrowed from the Plaintiff to its own account on the same day as the cash amount of KRW 000,000, which was withdrawn from the above bank account of leD on May 12, 2003. ② On May 14, 2003, leapD withdrawn KRW 003,000 (one cashier’s check) from the above bank account, and then deposited KRW 000 in its own account on the following day and used KRW 00,000 in cash.

Although the UCC acknowledged that it would bring 00 won in total to the above deposit account of leD, it stated that on May 14, 2003, it withdrawn and used 000 won cashier's checks and 000 won cashier's checks of 000 won in the above deposit account (A evidence, No. 8, No.901 pages).

3) Criminal prosecution and judgment against UCC

A) On June 29, 2010, the Prosecutor indicted the UCC on the charge that, under the Busan District Court Decision 2010Gohap368, the instant land was owned solely by the UCC, a tax official’s duty of tax investigation was excessively imposed on the Plaintiff by fraudulent means, thereby hindering tax officials’ legitimate performance of official duties.

B) On February 22, 2011, the Busan District Court rendered a false statement that the instant land was purchased solely by the Plaintiff in the course of the tax investigation, and made the relevant witness make a false statement with the same content. On the other hand, even though the submission of false data is recognized, it cannot be deemed that such circumstance alone interfered with a tax official’s legitimate performance of official duties by deceptive means (at present, the appeal court is continuing).

[Ground of recognition] Facts without dispute, Gap evidence 3, 4's 19, 5, 6's evidence, 8's evidence, and the purport of the whole pleadings

C. Determination

1) As to who the purchaser of the instant land is identified

The key issue of this case is who is the transferor of the land of this case. First, we examine who purchased the land of this case.

Of the down payment of KRW 000 and the remainder of the instant land, KRW 000,000, which was withdrawn from the Plaintiff’s deposit account. Of the remainder, KRW 000, the money created by EE, which was known to the Plaintiff at the time, was as seen earlier (the remainder of KRW 000,000, is the money of UCC). The Plaintiff asserted that the said KRW 00,000, was lent to UCC for the purchase of the said land. The Defendant and UCC asserted that the said money was paid by the Plaintiff when purchasing the said land jointly with UCC.

In light of the following circumstances, it is reasonable to deem that the above 00 won was the money that the Plaintiff lent to the UCC, and accordingly, the land in this case shall be deemed that the UCC was purchased solely by the UCC.

A) On November 7, 2002, the next day following the conclusion of the sales contract for the instant land, the UCC remitted KRW 000 to the deposit account of leD. The Plaintiff was established and used by lending the name of leD, and the UCC stated that it repaid the money previously borrowed from the Plaintiff with respect to the remittance of KRW 000,00, but there is no evidence to prove that it borrowed the money from the Plaintiff prior to the transfer of KRW 00,000. If we look at the interval of money transactions, it is reasonable to view the above KRW 00 as the repayment amount of KRW 00,000,000,000,000 borrowed from the Plaintiff for the payment of the down payment of the instant land from the Plaintiff on the previous day.

B) On May 12, 2003, UCC remitted KRW 000 to the deposit account of EE. The Plaintiff asserted that the said money was repaid with principal and interest, while UCC did not explain whether the said money was paid as E.S., and the KRW 000 appears to be appropriate as interest during the five-month period (from December 9, 2002 to May 12, 2003) for 00 won, it is reasonable to deem that the said KRW 00 was paid as principal and the remaining KRW 00 was paid as interest.

C) As seen in the above facts found, UCC received 000 won, excluding the remainder 000 won out of 000 won (00 won deposited in the deposit account of UCC + 000 won out of 000 won deposited in the deposit account of leD). The above 00 won was the remainder of principal amount (00 won - 000 won -00 won), and as seen above, it appears that the Plaintiff left to the Plaintiff for repayment of money transactions other than 000 won lent on May 12, 2003.

2) As to the reversion of the sale price of the instant land

The Defendant asserts that part of the purchase price of the instant land was reverted to the Plaintiff on the ground that the Plaintiff and the Plaintiff jointly purchased the part equivalent to the purchase price of the instant land equivalent to KRW 000,00-16 of the purchase price invested by the Plaintiff in the investigation agency of UCC, and that they subsequently acquired profits corresponding to the re-investment by selling each of the instant land to others and then received profits corresponding to the re-investment.

However, in full view of the statement and the purport of the whole argument as to Gap evidence 8, it is reasonable to view that the above cashier's checks were endorsed by the plaintiff on April 22, 2003, due to the following facts: (a) the UCC purchased the land under the name of another person; and (b) the sale price of each of the above lands belongs to UCC [the UCC is the fact that the investigation agency purchases the land of XX 000-16 and the land of XX 0-11, on the ground that it was jointly purchased by itself and the plaintiff; (c) the above fact that the plaintiff's endorsement was made on the above 00 foot cashier's checks issued as part of the purchase price of the land of XX 7-11 and the above 00 foot cashier's checks, as alleged by the plaintiff, it seems reasonable to view that the plaintiff's endorsement was necessary to pay the balance of the above land of this case to the plaintiff on April 22, 2003.

3) Therefore, the instant land is solely owned by the UCC, and its transfer margin belongs to the UCC, so the instant disposition that is based on the premise that the said land is owned by the Plaintiff and UCC is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed. It is so decided as per Disposition.