In calculating the amount of capital gains under the Income Tax Act which was in force before December 4, 1978, the case that the calculation based on the actual transaction price is not a case where it is possible to deny the calculation.

According to Articles 23(2) and 45(1) of the former Income Tax Act (amended by Act No. 3098 of Dec. 5, 1978), the transfer value and acquisition value in calculating the transfer value of assets shall be based on the actual transaction value, if the actual transaction value is unclear, or if the actual transaction value is unclear, it shall be determined based on the current base value. However, even if a person who sells the land of this case did not receive a reply from the person who sells the land of this case from the Plaintiff, or was converted into the land price index of the Korea Appraisal Board, and the increase rate of the government’s standard market price, the above reasons alone do not constitute a ground to deny the computation based on the actual transaction value.

Articles 23(2), 23(5), and 45(1) of the former Income Tax Act

Supreme Court Decision 79Nu344 delivered on May 13, 1980

[Judgment of the court below]

Head of the Do Tax Office

Seoul High Court Decision 79Gu444 delivered on June 10, 1980

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

According to the reasoning of the judgment below, the plaintiff purchased the land as stated in its holding on August 1973 and acquired its ownership, and transferred it on May 20, 197, and thereafter made a preliminary return of assets transfer value of 32,227,00 won and 19,946,250 won for the transfer of the above assets from June 30 of the same year. However, according to the court below's determination that the transfer value of the above land is unclear in the preliminary return of the above transfer margin, the defendant calculated the transfer value of 17,578,00 won and the acquisition value of 1,025,430 won and calculated the transfer value of the above land as stated in its reasoning, and there is no error of law by misunderstanding the legal principles as to the acquisition value of the above land from the person who purchased the above real market value at the time of the transfer of the above land, and thus, the court below's determination that the transfer value of the above land and the transfer value of 17,5700 won should not be based on the actual transfer value.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices O Sung-sung(Presiding Justice)