The case holding that there is an error of misapprehending the timing of transfer in calculating gains on transfer of assets;

In a case where Party A sold real estate to Party B and was not paid part of the remainder on the payment date of the remainder, and the auction was conducted at the request of Party B prior to the purchase and sale contract, and the auction was held in the future in the bank B where the mortgagee was a mortgagee, it cannot be deemed that the real estate was actually transferred to Party B, and it cannot be deemed that the purchase price was settled on the payment date of the remainder. Thus, the tax disposition that deemed that the payment date of the remainder constitutes the date of liquidation under Article 53(1) of the Enforcement Decree of the Income Tax Act on the date of transfer of the assets is unlawful.

Article 27 of the Income Tax Act, Article 53 (1) of the Enforcement Decree of the Income Tax Act

Plaintiff

Head of Seogju Tax Office

Gwangju High Court Decision 87Gu18 delivered on September 24, 1987

The judgment of the court below is reversed.

The case is remanded to the Gwangju High Court.

The plaintiff's grounds of appeal are examined.

1. On June 27, 1987, the lower court: (a) purchased the instant building site from Nonparty 1 Korea National Housing Corporation in the name of KRW 11,00,00,00; (b) sold the said building site and building to Nonparty 1 for KRW 165,00,00 on February 25, 1984; (c) determined that KRW 40,000 of the intermediate payment was 60,000 on March 20, 1984; (d) the above sales contract was 65,00,000,000 for the remainder payment and the intermediate payment were 60,000,000 won to the Plaintiff on June 30, 1984; and (e) the remaining amount was 62,50,000,000 won to be paid to Nonparty 1 to Nonparty 1; and (e) the said sale contract was 9,000,000 won to be paid to the Plaintiff.

2. However, Article 27 of the Income Tax Act provides that "the time of acquisition and time of transfer of assets shall be determined by Presidential Decree in calculating gains on transfer of assets"; Article 53 (1) of the Enforcement Decree of the same Act provides that "the time of acquisition and time of transfer as provided in Article 27 of the same Act shall be the date of liquidation of the price of the assets except for the following cases." One of the cases is "if the date of settlement of the price is not clear or before the price is settled (including a statement of registration and a statement of name; hereinafter the same shall apply), the date of registration of transfer of ownership entered in the register, registry, or list: Provided, That if the period from the date of registration to the date of receipt of registration exceeds one month, it cannot be deemed that the above building site and building in this case were actually transferred to Nonparty 1, and if so, it cannot be deemed that the above sale price has been determined otherwise by the court below's decision that the above sale price had no effect on the remaining date stipulated in the sale contract between the plaintiff and Nonparty 1, the above.

3. Therefore, the judgment of the court below shall be reversed, and the case shall be remanded to the court below for a new trial and determination. It is so decided as per Disposition with the assent of all participating judges.

Justices Lee Jae-sung (Presiding Justice)