early 2008 Before 0912 (Law No. 86, 2008)

Whether the value of land and buildings can be seen as unclear;

In light of the standard market price at the time, the average price of neighboring land, and the appraisal price by financial institutions at the time of the sale and purchase contract, while the price of the building is excessively low, the price of the building is set too high, and thus the value of the land and the building is unclear.

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

1. The plaintiff's appeal shall be lodged.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The defendant's disposition of KRW 91,216,810 against the plaintiff on October 5, 2007 shall be revoked.

1. Details of the disposition;

A. On October 2, 2003, the Plaintiff acquired a total of 634.4 square meters (around 192 square meters and the above 71-5 square meters were combined with the above 71-4 square meters on December 2003, 2003; hereinafter the same shall apply) of a total of 71-4 square meters in AAdong, Seo-gu, Daejeon, Daejeon, and 248.6 square meters in 71-5 square meters and 385.8 square meters in 71-5 square meters in 71-4 square meters in 776,69 square meters in 204 and completed construction on July 14, 2004.

B. On November 24, 2005, the Plaintiff entered into a contract for the sale of the instant land and building with the Korea Human Resources Commission BB church (hereinafter “B church”) and completed the registration of ownership transfer on January 11, 2006 at the same time with the remainder payment.

C. On March 31, 2006, the Plaintiff reported the transfer income tax base to the actual transaction price of KRW 1,200,000 (=land 720,000,000 + building 480,000,000) and paid the relevant tax by reporting the transfer income tax base to the actual transaction price of KRW 1,109,773,29 (=land 660,000,000 + building 449,73,299).

D. The director of the Daejeon Regional Tax Office, as a result of audit and inspection, found that the actual transaction price of the instant building is confirmed and it is unclear that the transfer value is different from that of the instant building. Thus, the transfer value of the instant building is calculated by dividing the total purchase price of KRW 1,200,000 by the standard market price of each asset at the time of transfer, and calculated the transfer value of the instant building at KRW 983,359,380, and the transfer value of the instant building at KRW 216,640,620. Since the actual transaction price at the time of transfer is unclear, the director of the Daejeon Regional Tax Office ordered the Plaintiff to rectify KRW 207,214,113, which is the conversion value, since the actual transaction price at the time of the instant building is unclear. Accordingly, the Defendant notified the Plaintiff of KRW 91,216,810, Oct. 5, 207 (hereinafter referred to as the “disposition”).

E. The Plaintiff filed an appeal with the Tax Tribunal on the instant disposition, but was dismissed on June 26, 2008.

[Reasons for Recognition]

Facts without dispute, Gap evidence 1 through 9, Eul evidence 1 through 9 (including each number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

At the time of the conclusion of the instant sales contract, the Plaintiff and BB church clearly identified the total purchase price of KRW 1,200,000 for the land of KRW 720,000 for the land and KRW 480,000 for the building, and KRW 480,000 for the building, which is objectively reasonable price. However, it is unreasonable for the Defendant to view that the classification of the value of the instant land and the building is unclear.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

(1) According to Article 96(1) and (2)6 of the former Income Tax Act (amended by Act No. 8144, Dec. 30, 2006; hereinafter the same), where the transferor of land or building files a return on the actual transaction price as at the time of transfer and acquisition along with evidential documents, the transfer price shall be the actual transaction price between the transferor and transferee at the time of transfer and transferee. If a person liable to pay capital gains tax submits a sales contract and a certificate of personal seal impression on acquisition and transfer as evidentiary documents, the tax authority shall calculate gains from transfer based on the actual transaction price under each of the above evidential documents (see Supreme Court Decision 95Nu3183, Jun. 25, 1996; 95Nu3183, Jun. 25, 2006); and where the transfer price or acquisition price is calculated based on the standard market price calculated based on the former Enforcement Decree No. 1980, Feb. 16, 2007>

(2) We examine whether the value of the instant land and the building is divided.

(A) The following facts are acknowledged according to the above evidence, the testimony of the witness of the first instance trial, Park GG, the testimony of the highest KK, and the fact-finding results of the first instance court's BB school, and the statement of Gap evidence Nos. 11 through 15 alone are insufficient to reverse the above recognition.

1) The instant sales contract is written on the basis of the classification of KRW 720,000,000, and KRW 480,000,000, respectively, for each of the sales proceeds of land and buildings.

2) The Plaintiff presented KRW 1,500,000 at the initial sale price. On the other hand, BB church asserted KRW 1,200,000 as total purchase price, considering the fact that if the usual price of the pertinent land is less than KRW 5,000 to KRW 5,000,000 as the usual price of the surrounding land is less than KRW 4,000,000,000, considering that the building is newly constructed, the Plaintiff claimed KRW 1,20,000 as total purchase price.

3) After the sales price of this case was determined as KRW 1,200,000, the Plaintiff demanded the BB church to divide the price of land into KRW 720,00,000,000, and the price of the building into KRW 480,000,00 in the sales contract. The BB church only important for the total purchase price, and there was no interest in the classification of land and buildings. Therefore, even though the building price required by the Plaintiff was too high, it was allowed to enter into the special agreement as it is in order to make the sales contract smooth.

4) Although the BB association was unable to establish a social welfare facility by acquiring not only the original land but also the surrounding land, it was difficult to establish a social welfare facility at the same time. However, the instant building that did not acquire the surrounding land is partially remodeled and repaired, and used as a church’s landscape, public room, or wedding room.

5) On June 19, 2006, BB church purchased at KRW 580,00,00 the AA-dong 71-6 land and the building on the ground located adjacent to the instant land. At that time, the building was deteriorated, without recognizing any value, only the land was determined for sale.

6) At the time of the transfer alleged by the Plaintiff, the price ratio of the instant land and building is approximately 60% and about 40%, but when based on the current standard market price, the land is KRW 678,808,00, and the building is KRW 149,545,930, and the price ratio of both parties is approximately KRW 82% and KRW 18%.

7) On July 11, 2007, BB had offered the instant land and buildings as collateral and had been loaned from the Daejeon Chungcheongnamnam Livestock Industry Cooperatives. According to the appraisal report at the time, the land price of the instant land was KRW 900,848,00, and the building price was KRW 177,420,990.

8) The accurate cost actually incurred at the time of the acquisition of the instant building cannot be confirmed.

(B) As shown in the above facts, the price of the land and building stated in the instant sales contract is due to the Plaintiff’s unilateral request, and it is difficult to view that the agreement was reached by reflecting the real value of each real estate between the BB church and the BB church. In light of the current standard market price, the average price of neighboring land, and the appraisal price by financial institutions, the price of the land was excessively low, while the price of the building was set excessively high, and thus, the Plaintiff lacks objectivity and reality. Since there is a benefit to reduce capital gains tax if the value of the land is set lower than that of the building, it is reasonable to deem that the distinction between the value of the land and the building under the instant sales contract is not clear in light of all these circumstances.

(3) The instant disposition is lawful, and the Plaintiff’s assertion disputing this is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is so decided as per Disposition.