The method of calculating gains on transfer where a transferor of assets submits only evidential documents capable of verifying the actual transaction value at the time of transfer while filing a preliminary return on gains on transfer or a final return on

Even if the transferor of assets makes a preliminary return on the transfer margin or the final return on the tax base, it is only a submission of documentary evidence to confirm the actual transaction price at the time of the report, but fails to submit documentary evidence to confirm the actual transaction price at the time of the acquisition, the transfer margin shall be determined by the standard market

Articles 23(4) and 45(1)1 of the Income Tax Act, Article 170(4) of the Enforcement Decree of the Income Tax Act

Supreme Court Decision 87Nu483,484 Decided December 22, 1987

[Judgment of the court below]

Head of the Cleanness Tax Office

Seoul High Court Decision 87Gu1060 delivered on April 22, 1988

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

1. We examine the first ground for appeal.

In case where the transferor of assets does not fall under Article 170 (4) 1 and 2 of the Enforcement Decree of the Income Tax Act or the final return on transfer of assets pursuant to subparagraph 3 of the same Article, the transfer margin can be calculated by means of the actual transfer and acquisition value only when evidential documents are submitted to confirm the actual transaction value at the time of acquisition and transfer. Thus, even if the transferor of assets made the above report at the time of report, if he only submits evidential documents to confirm the actual transaction value at the time of the transfer and fails to submit evidential documents to confirm the actual transaction value at the time of the transfer, the transfer margin should be determined by the standard market value at the time of acquisition and transfer.

Supreme Court Decision 87Nu483, 484 Decided December 22, 1987

The judgment of the court below to the same purport is just and there is no error in the misapprehension of legal principles as pointed out in the judgment below.

In addition, the decision of the party members citing the arguments is based on the purport that in the case of transaction with a juristic person under Article 170 (4) 1 of the Enforcement Decree of the same Act, the data capable of verifying the actual transaction price can be used as data for the judgment including not only the data submitted in the previous trial but also the data submitted in the administrative litigation procedure, and it is not appropriate as precedents in this case. The arguments are groundless.

2. The second ground of appeal is examined.

The judgment of the court below that the cost report (No. (No. (No. (4) submitted by the plaintiff to the defendant in the return on the transfer of the building in this case) was merely a statement on the plaintiff's assertion that the expenses for the construction of the building in this case had been much, and it cannot be viewed as a document verifying the actual transaction price at the time of the acquisition, and therefore it cannot be viewed as a document verifying the actual transaction price at the time of the acquisition, is just in light of the contents of the above cost report. Therefore, in making the preliminary return on the transfer of the building in this case or the final return on the tax base even after the transfer of the building in this case, unless the plaintiff submits a document verifying the actual transaction price at the time of the acquisition, the court below's determination to the effect that there was no error of law in determining the transfer margin by the standard market price at the time of the acquisition and transfer, as long as the defendant did not examine whether the building had undergone the

3. Therefore, the appeal is dismissed, and all 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 Lee Jong-soo (Presiding Justice) Lee Chang-soo Kim Jong-won