Seoul Administrative Court-2014-Gu 67659 (O5, 2015)

Money deposited in the Plaintiff’s account constitutes donated property.

As alleged by the Plaintiff, the Plaintiff’s assertion cannot be acknowledged on the ground that the funds of the instant company were used in performing his/her obligations against the Plaintiff, as otherwise alleged by the Plaintiff.

Article 2 of the Inheritance Tax and Gift Tax Act

2015Nu4848 Revocation of Disposition of Imposition of Gift Tax, etc.

***

*The Director of the Tax Office

Seoul Administrative Court Decision 2014Guhap67659 decided June 5, 2015

June 23, 2016

July 21, 2016

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 disposition of imposition of KRW 00,000,000 on December 3, 2013 rendered by the Defendant to the Plaintiff on December 3, 2013 and the inheritance tax of KRW 000,00,000 on the property of 2012 shall be revoked.

1. Details of the disposition;

A.******* Company (hereinafter referred to as the “instant company”) is a company whose business is clothing, miscellaneous, food bankruptcy wholesale business, building leasing business, etc., and the Plaintiff is in office as the representative director of the instant company from September 10, 1997 to the date of September 5, 2008. The Plaintiff’s first birth Kim* is in office as internal director, second birth Kim* is in company director, second birth Kim* is in office as the auditor, and the Plaintiff’s father, Kim & Kim (hereinafter referred to as “the decedent”) was in office as the auditor of the instant company from September 10, 1997 to March 5, 2008.

B. The decedent died on June 25, 2012, and the heir, including the Plaintiff, reported and paid inheritance tax on December 31, 2012.

(C) Upon examining inheritance tax from July 2013 to September 2013, the director of the Seoul Regional Tax Office confirmed that, on April 15, 2010, a check (7 copies of KRW 100 million) issued by the decedent at the issuing bank account of the decedent to the issuing bank account of the decedent (hereinafter “the instant money”) was deposited into the Plaintiff’s new bank account on the same day, and on December 3, 2013, the decedent deemed that the decedent had made a prior donation to the Plaintiff, and on December 3, 2013, determined and notified KRW 00,000,000,000 as gift tax for the year 200,000 and inheritance tax for the year 200,000,000,000 as inheritance tax for the year 2012 (hereinafter “the instant disposition”). The Plaintiff dissatisfied with this, the Tax Tribunal dismissed the Plaintiff’s claim for adjudication on January 24, 2014.

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to 3, Eul evidence 1 to 3 (including each number if there is a tentative number), the purport of the whole pleadings

2. The plaintiff's assertion

The instant money is paid to the Plaintiff by Kim*, who is in charge of the financial management of the instant company, to repay the Plaintiff’s debts, and Kim*’s debt details against the Plaintiff are as follows.

1) KRW 00,00,000, which is appropriated from the instant company and appropriated as the provisional payment to the Plaintiff: Kim* without the consent of the Plaintiff, is useful and disposed of as the provisional payment to the Plaintiff. Accordingly, the balance of the instant company’s provisional payment as of the end of the business year 2009 is KRW 00,000,000, including the said amount in the next year, and was appropriated as the provisional payment to the Plaintiff. A dispute between the Plaintiff and Kim** as the Plaintiff became known of this fact around 2009, and the dispute began between the Plaintiff and Kim** as it was necessary for the Plaintiff to make an investment in the business, and at the time, Kim* demanded the Plaintiff to return the money with the provisional payment instead of correcting the debtor Kim** as the provisional payment.

2) The purchase price of the Plaintiff’s land is KRW 00,00,000: Kim* on June 4, 2005, Kim* deposited in the account of the instant company and did not return to the Plaintiff after depositing the purchase price of the Plaintiff’s land in the account of the instant company ** * * * * 1256 square meters, * 1* * 1* * 4529 square meters (in combination of 4529 square meters (hereinafter referred to as “family land”) on behalf of the Plaintiff. The Plaintiff was paid KRW 00,00,000 in total with the purchase price on June 4, 2005 and June 8, 2005.

3) Total amount of the lease deposit for the apartment owned by the Plaintiff KRW 000,000,000

A) On September 14, 2007, Kim* entered into a lease agreement with an existing lessee on behalf of the Plaintiff on behalf of the Plaintiff as to Seoul**Gu**dong***00, 405 (hereinafter referred to as the “multi-family housing”) owned by the Plaintiff, and raised the lease deposit from KRW 00,000,000 to KRW 00,000,000, but did not deliver it to the Plaintiff.

B) On December 11, 2006, Kim* entered into a lease agreement on behalf of the Plaintiff with respect to Seoul**Gu*dong**** Jeju apartment, 000 dong 205 (hereinafter referred to as “* apartment”) on behalf of the Plaintiff, and received KRW 00,000,000 from the lessee, but did not deliver it to the Plaintiff.

C) On November 29, 2008, Kim* entered into a lease agreement on behalf of the Plaintiff as to Seoul**Gu*dong************* an apartment00, 3402 (hereinafter referred to as "** apartment") on behalf of the Plaintiff, and received KRW 00,000,000 from the lessee, but did not deliver it to the Plaintiff.

4) As above, Kim* was liable to the Plaintiff for a total amount of KRW 000,00,000 (= KRW 000,000 + KRW 00,000 + KRW 000,000 + the Plaintiff intended to take measures such as criminal complaint or lawsuit as a result of a dispute over this dispute around 2009. However, according to the inheritee’s arbitration known to him, Kim* deposited all the money he had at the time into the inheritee’s account ( KRW 00,000,000) after consultation between approximately one year, and then agreed to complete the dispute because Kim* was to return the money of KRW 770,000 to the Plaintiff. Accordingly, ** the money deposited by the Defendant to the Plaintiff, which was kept in the account under the name of the decedent on April 15, 2010, and the sum of the money deposited by the Defendant’s account and the check deposited to the Plaintiff should be revoked.

3. Relevant statutes;

It is as shown in the attached Form.

4. Determination

A. As long as the amount of money of a person recognized as a donor by the tax authority in a lawsuit seeking the revocation of disposition imposing gift tax is revealed to have been deposited by the account in the taxpayer’s name, it shall be presumed that the amount was donated to the taxpayer. Thus, in special circumstances, such as that deposit to the account in the taxpayer’s name was made for other purpose than gift, there is a need to prove it to the taxpayer (see, e.g., Supreme Court Decisions 9Du4082, Nov. 13, 2001; 2003Du6290, Oct. 10, 2003).

B. Based on the above legal principles, according to the statement of No. 1-2 of the Health Team and No. 1-2, it is recognized that a check equivalent to the money of this case was issued in the deposit account under the name of the decedent and deposited into the account under the name of the plaintiff. Accordingly, it is presumed that the money of this case was donated to the plaintiff from the decedent. Therefore, the plaintiff must prove that the money of this case was deposited for the purpose of repayment to the plaintiff *, not for donation.

C. In light of the following circumstances, it is insufficient to acknowledge that the Plaintiff’s evidence alone submitted by itself was made for the purpose of paying the instant money Kim*’s obligation, and there is no other evidence to support this otherwise, the Plaintiff’s assertion is without merit.

1) Even according to the Plaintiff’s assertion, Kim* around 2009 (2009) came to know of useful facts by deducting the company’s funds of KRW 00 billion and demanded the return thereof. Kim** refused to pay the amount to the Plaintiff. At the time, there was no dispute about the Plaintiff’s refusal to pay the amount to the Plaintiff. At the same time, the Plaintiff decided to borrow the amount from the company without confirmation of the due date of payment or the accurate amount of the provisional payment exceeding KRW 00 million. In such a situation, it is difficult to understand that the Plaintiff received the return from the Kim*, which is the aforementioned dispute, without confirmation of the due date of payment or the accurate amount of the provisional payment. Meanwhile, it is difficult to understand that the Plaintiff paid the amount of KRW 00 million to the decedent’s account without any settlement or agreement on the total amount of the debt. Meanwhile, Kim* In addition, in the situation where the dispute occurred, it is difficult to understand that the Plaintiff paid the amount of KRW 100 million to the above account without any agreement or any material.

2) In the instant lawsuit, the Plaintiff alleged that Kim* has deposited KRW 00,000,00 in the account under the name of the inheritee on May 22, 2009 following the inheritee’s arbitration. However, in the first explanation regarding the Defendant’s tax investigation, the account under the above decedent’s name was jointly managed by the inheritee and the Plaintiff, and*** KRW 00,000,000 in the purchase price of land ** apartment house ** KRW 000,000 in the purchase price of land ** apartment house ** KRW 000,000 in the increase of apartment deposit *** in the increase of apartment house * KRW 100,000 in the total amount of KRW 1,50,000 in the instant case’s health account as well as KRW 500,000 in the aggregate amount of KRW 1,500,000 in the instant case’s wage deposit with its representative director and the Plaintiff’s total amount of KRW 1 million in the instant case’s wage deposit.

3) In addition, the plaintiff did not at all assert the fact that the payment of the instant money was Kim*'s debt repayment. In the second explanatory material, the plaintiff and Kim* borrowed a sum of KRW 00 million from February 11, 2003 to November 18, 2005, and received payment in succession from Kim**, and the plaintiff did not have any amount or loan to Kim*. However, in the subsequent written claim for pre-assessment review, the plaintiff asserted that the amount of KRW 00 million out of the instant money was disposed of as provisional payment against the plaintiff ***, while the plaintiff asserted that it was a debt payment for the plaintiff 200 million from February 11, 2003 to November 18, 2005, and that the plaintiff was paid in succession from Kim**, the plaintiff argued that it was a debt payment for the plaintiff **, and the plaintiff asserted that it was a debt in this case.

According to the Plaintiff’s assertion that KRW 00,000,00 deposited in the new bank account under the name of the inheritee was deposited in 00,000, KRW 000,000, KRW 000,000, KRW 000,000, KRW 000, KRW 000, KRW 000,000, KRW 700,000, KRW 00,000, KRW 700,000, KRW 10,000, KRW 10,000, KRW 10,000, KRW 10,000, KRW 10,000, KRW 10,000, KRW 10,000, KRW 10,000, KRW 10,000,000, KRW 10,000, 20,000, 205,000.

4)**** under the sales contract (Evidence No. 12) for the land of the Plaintiff, the Plaintiff’s agent signed and sealed the name and seal of the inheritee. Accordingly, the Plaintiff asserted that Kim* entered into a contract on behalf of the Plaintiff on behalf of the Plaintiff and used the name of the inheritee. However, it is difficult to easily understand that the Plaintiff used the name of the inheritee only under the above sales contract** in the case of entering into an apartment or a* apartment lease contract on behalf of the Plaintiff. In addition, in a preparatory document dated March 27, 2015 as a certified judicial scrivener, the above sales contract was executed by the decedent on behalf of the decedent, but the sales price was managed by Kim**, and only because the amount equivalent to the sales price of the above land was deposited into the account of the instant company at that time, Kim* is not liable for the Plaintiff’s debt corresponding to the sales price.

5)**** in relation to a lease agreement for an apartment, the plaintiff alleged that Kim* entered into a lease agreement on behalf of the plaintiff, and received KRW 00,000,000 from the lessee, but the plaintiff's representative under the lease agreement is Kim***'s signature and seal is affixed to the plaintiff's representative, and the special agreement merely states that "the contract is in force on behalf of the owner.**************-000**********) on behalf of the owner, and there is no other evidence proving that the contract was concluded on behalf of the plaintiff. In addition, the plaintiff did not have any deposit account of the original plaintiff, and the plaintiff argued that the remainder of the lease deposit and the long-term repair appropriations were not returned to the plaintiff?* The above payment was not made to the plaintiff before the expiration of the lease agreement**00 billion won as long as the payment was made by the plaintiff's account ** the payment of the balance is not made to the plaintiff* there is no possibility of deposit in the above 0000 billion.

On the other hand, the plaintiff asserts that the above 245,00 won was paid to the old lessee as long-term repair appropriations. However, comprehensively considering the purport of the whole pleadings in the evidence Nos. 17 and No. 9, the date of completion of the business of the apartment *** the date of completion of the business of the apartment * the date of conclusion of the lease contract for the apartment 28 October 29, 2008 and the date of conclusion of the lease contract for the apartment 245,000 won was stated as the contract in the column of the special terms of the lease contract. The above facts can not be viewed as the amount paid as long-term repair appropriations. Accordingly, according to the above facts, the above 245,00 won was not the amount paid as long-term repair appropriations ** the balance of the apartment 17,000,000 won deposited in the account No. 632, Oct. 29, 200>

6) The fact that KRW 00,000 was withdrawn from the instant company’s account on April 15, 2010 is recognized, but, as seen above, inasmuch as a check equivalent to the instant money was issued on the same day by designating the decedent as the issuer at the deposit account in the name of the decedent and the said check was deposited into the Plaintiff’s account in the name of the decedent, it is reasonable to deem that the said money was donated to the Plaintiff from the decedent ( even if the source of the said money is the instant company’s account, as alleged by the Plaintiff, there is no proof on the grounds that the company’s funds were used to repay the Plaintiff’s obligations to the Plaintiff, * as alleged by the Plaintiff, and in this respect, the Plaintiff’s assertion cannot be recognized).

5. Conclusion

Since the judgment of the first instance is justifiable, the plaintiff's appeal is dismissed as it is groundless.