Early High Court Decision 201Du1431 ( October 18, 2011)

It is difficult to deem that a transfer was made due to the cancellation of a sales contract’s termination.

It can be recognized that a sales contract has been canceled and completed registration of cancellation of ownership transfer registration, and it is difficult to deem that there was a transfer subject to capital gains tax due to the completion of restitution following the cancellation of agreement, since the payment of the purchase price was substituted for the payment of existing bonds and the claims have been restored due

Article 88 of the Income Tax Act

2011Guhap548 Revocation of Disposition of Imposing capital gains tax

Yellow AA

Deputy Director of the Tax Office

May 24, 2012

June 14, 2012

1. The Defendant’s disposition of KRW 000 of the capital gains tax corresponding to the year 2009 against the Plaintiff on February 24, 2011 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On April 9, 2002, the Plaintiff acquired the ownership of 1,729 square meters and 1/3 shares of 450 square meters of the building without permission in Seocheon-gu O200 O-dong 00 square meters and 450 square meters of the land (hereinafter collectively referred to as "the real estate in this case", and the part of the land in this case "the land in this case") from Seocheon-gu, Seocheon-gu, Seoul, and sold the land to SoulD on February 2, 2009 (hereinafter referred to as "the contract in this case"). On April 8, 2009, the Plaintiff completed the registration of ownership transfer of the land in this case on April 8, 2009. In this regard, on March 30, 2009, the Plaintiff made a preliminary return on the tax base of capital gains for the Defendant to pay KRW 000,000, and to pay tax amount at KRW 000,000.

B. The Defendant responded that Jung transferred the entire real estate in this case to 000 won (per 1/3 shares: 000 won), and demanded the Plaintiff to submit explanatory materials prior to the completion of the investigation on October 14, 2010.

C. On October 15, 2010, the Plaintiff: (a) rescinded the instant sales contract; (b) completed the registration of cancellation of ownership transfer registration in the name of YellowD with respect to the instant land on the same day; and (c) filed a request for correction seeking refund of KRW 000 of the capital gains tax to the Defendant on October 21, 2010.

D. The defendant judged that the above cancellation was for tax avoidance purpose and denied it, and April 2009.

8. On February 24, 201, the instant disposition was rendered to correct and notify KRW 000 of the income tax on the transfer income accrued in 2009, calculated by applying the conversion acquisition value to the Plaintiff, while rejecting the Plaintiff’s request for correction on February 24, 201.

E. The Plaintiff appealed and filed an appeal with the Tax Tribunal on April 6, 2011, but the appeal was dismissed on October 18, 201.

[Reasons for Recognition] The non-speak, Gap evidence 1, 2, and 3, Eul evidence 1 through 4, 7, and 9, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) The Plaintiff did not receive the sales amount from HuD, and the instant sales contract was terminated under the condition that the sales amount was not settled, and the instant disposition was unlawful.

(2) The acquisition value of the instant real estate is 000 won, and the instant disposition that reported differently, was unlawful (the Plaintiff asserted the instant disposition in the course of examination of the witness title).

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

According to Article 4 (1) 3 of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009; hereinafter the same shall apply), and Article 4 (3) and Article 88 (1) of the former Income Tax Act, capital gains tax is imposed on income accruing from the transfer of assets, and the term "transfer" refers to cases where assets are actually transferred for price due to sale, exchange, investment in kind in a corporation, etc. regardless of the registration or enrollment of the assets. In this case, the plaintiff agreed to the contract of this case with YD on October 15, 2010, and completed the registration of cancellation of ownership transfer registration of the land of this case on the same day, it is difficult to say that the purchase price was in substitution for the payment of existing bonds to the plaintiff of YD, and the above claim between the parties was restored by the above agreement and thus, it cannot be seen that the transfer contract of this case was cancelled by agreement 2018 or 2018 of the former Enforcement Decree.

3. Conclusion

Thus, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition.