Busan District Court-2018-Gu Partnership-21447 (Law No. 10, 2018)

Cho-2017-Divisions-4407 (Law No. 181, 30)

Whether the income from the transfer of real estate is business income or capital gains should be determined in consideration of the transferor's acquisition of real estate, current status of possession, etc.

(As with the judgment of the first instance court), it is reasonable to deem that the act of transferring apartment units continuously and repeatedly trading multiple apartment units, etc. was conducted as part of "real estate sales business". Unless the ground for new disposition does not correspond to that of the previous disposition in the grounds for previous disposition and basic facts, it does not conflict with the binding force of the ruling.

Article 19 of the Income Tax Act, and Article 81-15 of the Framework Act on National Taxes

2018Nu22739 Disposition of revocation of Disposition of Imposition of Value-Added Tax

SAA

○ Head of tax office

November 2011

on October 01, 2010

1. The plaintiff's appeal is dismissed.

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 imposition of the global income tax of 14,771,790 won on January 11, 2017; of 2012 value-added tax of 15,117,740 won on February 201; of 13, value-added tax of 60,043,310 won on January 2013; of 14,771,774,630 won on February 2, 2013; and of 17,385,200 won on March 16, 2017; of global income tax of 204,704,704,630 won on global income of 2013; and of 291,539,010 won on global income of 203,530,309 won on global income of 2030,530.

1. Quotation of judgment of the first instance;

The reasoning for this Court is that the reasoning for this case is as stated in the judgment of the court of first instance, except for the addition of the judgment as stipulated in paragraph (2) below with respect to the plaintiff's additional argument of the court of first instance (other matters asserted by the plaintiff in the court of first instance are nothing more than the assertion that is not significantly different from or repeatedly emphasized from the contents alleged by the plaintiff in the court of first instance, and the evidence submitted in the court of first instance and the evidence submitted in the court of first instance and the evidence Nos. 11 and 12 additionally submitted in the court of first instance are just in finding fact and determining the plaintiff's assertion, which are not accepted by the court of first instance).

2. Judgment on the Plaintiff’s additional argument

A. Violation of the binding force of the decision to raise an objection

1) Summary of the assertion

The Defendant, prior to the instant disposition, issued a disposition imposing capital gains tax on 101 units ○○, among the instant apartment units on the premise that the proceeds from the transfer of the instant apartment units would be capital gains. Accordingly, the Plaintiff filed an objection against the Director of AAAB through a pre-assessment review, and received a decision of decision of acceptance on April 11, 2014. Nevertheless, AAA regional tax office, after making a tax investigation on the premise that the proceeds from the transfer of the instant apartment units would be capital gains, conducted the said decision on the premise that the proceeds from the transfer of the instant apartment units would be capital gains, and notified the Defendant of the outcome of the investigation by determining the proceeds from the transfer of the instant apartment units as business income and accordingly

2) Determination

In a case where the grounds for objection are recognized as justifiable in the process of appeal regarding a taxation disposition, and accordingly necessary measures were taken, the former disposition cannot be reversed without any justifiable grounds in light of the legal purport recognizing the objection system and the method of correction accordingly. Therefore, even if the tax authority ex officio revokes the taxation disposition by deeming the grounds for objection by the taxpayer in the procedure of raising an objection against the taxation disposition as justifiable, it is unlawful for the former disposition to reverse the said disposition without any justifiable grounds (see, e.g., Supreme Court Decision 2011Du1427, Jul. 24, 2014). However, the binding force of the aforementioned determination extends only to the determination of the requirements for the disposition and its premise, i.e., the recognition and determination of the facts constituting the basis for illegality, and even if the previous disposition was revoked ex officio upon the acceptance of the objection, it does not conflict with the binding force of the previous disposition by citing different grounds, and thus, it should not be deemed that there exists a new ground for objection against the previous disposition (see, e.g., Supreme Court Decision 2007Du1405., supra).

Article 98-5 of the Restriction of Special Taxation Act, which is a provision on reduction or exemption for the acquisition of a house unsold in lots, among the apartment of this case, the plaintiff's 101 apartment of this case, and Article 98-5 of the Restriction of Special Taxation Act, which is a provision on the acquisition of a house unsold in lots, is applicable to the plaintiff's transfer of 101 apartment of this case. The reason for the disposition of this case is limited to that of the plaintiff's transfer of apartment of this case as part of real estate sales, and income resulting therefrom constitutes business income under the Income Tax Act, and the transfer of apartment of this case is subject to value-added tax. Thus, the reason for disposition of this case is not recognized as identical to the ground for previous disposition revoked by the decision of objection. Furthermore, as long as the ground for disposition of this case is different from that of the previous disposition, even if the defendant had already been aware of the acquisition and transfer of the entire apartment of this case at the time of the previous disposition, this part of the plaintiff's assertion is without merit.

B. Grounds for abuse of tax investigation authority

1) Summary of the assertion

In a situation where there is a trust that there is no taxation of any tax item following the transfer of the apartment of this case, the tax investigation of this case is unlawful merely because it was conducted by abusing its authority to conduct a tax investigation as a tool for taxation under the ice of the tax investigation, even though it does not include the grounds for the selection of the tax investigation under the Framework Act on National Taxes, even if there is no need to conduct a tax investigation.

2) Determination

As properly explained in the judgment of the first instance court, as long as the tax authority granted the Plaintiff a trust in believing that the Plaintiff will not impose business income tax on the instant apartment sales act, or the Plaintiff operating a real estate sales corporation, etc. has formed a trust in protecting the real estate sales business value, it is difficult to recognize that the instant tax investigation constitutes abuse of the right to tax investigation, and there is no other evidence to acknowledge it otherwise. The Plaintiff’s assertion on this part is without merit.

3. Conclusion

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