(a) Methods for calculating gains on transfer where it is deemed that there exists no speculation even if it falls under a type of speculative transactions listed in Article 170 (4) 2 of the former Enforcement Decree of the Income Tax Act

(b) The case holding that transfer margin should be calculated based on the standard market price on the ground that a false sales contract which makes the purchase price lower than the actual market price and obtains permission for a land transaction contract under the Act on the Utilization and Management of the National Territory, but it cannot

A. The purpose of Article 170(4)2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13194, Dec. 31, 190) is to impose capital gains tax on speculative acts by requiring them to calculate gains from transfer based on the actual transaction price. In full view of the main text of subparagraph 2 and the proviso of subparagraph 2, it is reasonable to interpret that where an speculative act falls under the category of speculative transactions listed in subparagraph 2, it shall be presumed that such an act constitutes a single speculative transaction if it falls under the category of speculative transactions listed in subparagraph 2. However, in full view of the specific circumstances such as the acquisition circumstances, actual use conditions, sales circumstances, and holding period in the relevant real estate transaction, in a case where it is deemed that there is no speculative nature as a normal economic act, it shall be excluded from the application of the actual transaction price

B. The case holding that since a land transaction does not constitute an speculative transaction, it is a violation of Articles 21-3 (1) and 31-2 of the former Act on the Utilization and Management of the National Territory (amended by Act No. 4572 of Aug. 5, 1993), to obtain permission for a land transaction contract based on the Act on the Utilization and Management of the National Territory (amended by Act No. 4572 of Aug. 5, 1993), even if it constitutes a violation of the related Acts and subordinate statutes in transferring real estate under Article 170 (4) 2 (e) of the Enforcement Decree of the Income Tax Act, the transfer margin should

A. B. Article 170 (4) 2 (e) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13194, Dec. 31, 190); Article 21-3 (1) and Article 31-2 of the former Act on the Utilization and Management of the National Territory (amended by Presidential Decree No. 4572, Aug. 5, 1993)

A. Supreme Court Decision 92Nu619 delivered on July 14, 1992 (Gong1992, 2449) 92Nu11282 delivered on March 9, 1993 (Gong1993Sang, 1180) 92Nu18467 delivered on June 28, 1994 (Gong194Ha, 2140)

[Defendant-Appellee] Plaintiff 1 et al., Counsel for defendant-appellee

The superintendent of the tax office

Seoul High Court Decision 93Gu5965 delivered on December 1, 1993

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, when acquiring or transferring real estate above a certain size prescribed by Article 170 (4) 2 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13194, Dec. 31, 190; hereinafter the same) and its (e) above, the court below held that the transfer margin can be calculated based on the actual transaction price if it is deemed that there is no speculation in light of the acquisition, transfer circumstances, and actual use conditions of real estate, and it can be excluded from the actual transaction price after consultation under paragraph (9). The court below held that the act of speculation would be calculated based on the actual transaction price so that transfer margin would be calculated based on the actual transaction price, and that the sale price of land should be calculated based on the above provision's above as KRW 20,00,000,000,000,000,000,000,000 won, and thus, it should be calculated based on the principle of 197,000 won.

In addition, so long as the Plaintiff’s land transaction does not constitute an speculative transaction, as alleged in the theory of theory, it is against the provisions of Articles 21-3(1) and 31-2 of the former Act on the Utilization and Management of the National Territory (amended by Act No. 4572, Aug. 5, 1993) to obtain permission for the land transaction contract under the Act on the Utilization and Management of the National Territory (amended by Act No. 4572, Aug. 5, 1993). This constitutes an act of violating the provisions of Articles 21-3(1) and 31-2 of the former Act on the Management and Utilization of the National Territory (amended by Act No. 4572, Aug. 5, 1993

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 on the bench.

Justices Ahn Yong-sik (Presiding Justice)