Seoul High Court 2007Nu10619 ( October 30, 2007)

Cho High Court Decision 2006Do1509 (2006.05)

Whether a reconstruction association has income from a reconstruction association

The value of land acquired by the reconstruction association from its members shall be calculated in the account book within the scope of the market price, and income shall be deemed to have accrued since the construction cost has been reduced from the sale by the association members, although no income has accrued from the sale by installments.

The contents of the decision shall be the same as attached.

The appeal shall be dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal are determined.

Article 41(1)3 and (2) of the Corporate Tax Act and Article 72(1)3 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 20720, Feb. 29, 2008) provide that the acquisition value of the assets acquired by investment in kind in the account book shall be the value of investment in the account book or the value of succession, but if the market price exceeds the market price, the excess amount shall be excluded.

The court below rejected the plaintiff's assertion that the defendant's disposition rejecting the plaintiff's claim for correction of corporate tax violates the principle of substantial taxation, on the ground that the plaintiff's claim for correction is legitimate, since the plaintiff's income was distributed to the plaintiff's members by the method of reducing the construction cost to be borne by the plaintiff's members as a result of the reduction of the construction cost to be borne by the plaintiff's members in relation to the sale of the land in this case, and the plaintiff's income was distributed to the plaintiff's members in relation to the sale of the land in this case, as the average appraisal value of two appraisal corporations within the market price under the Corporate Tax Act as the average appraisal value of the two appraisal corporations, and the plaintiff's income was calculated by deducting the value and construction cost equivalent to the share of the general sale in the above book value from the sale price in relation to the general sale in this case.

In light of the above provisions and records, it is reasonable to view that the Plaintiff derived income equivalent to the amount calculated by deducting the book value and construction cost of the share in the land for sale in general in relation to the sale in lots from the price of sale in general, and that the income was distributed to the Plaintiff by the Plaintiff through the process of selling the apartment in excess of his value. Therefore, the judgment of the court below is somewhat insufficient, but its conclusion is justified, and it is not erroneous in the misapprehension of the legal principles as to the principle of substantial taxation or the income amount in the reconstruction association as otherwise alleged in the ground of appeal.

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.