In case where a corporation which does not operate an agriculture, livestock industry, or forest business as its main business has sold or disposed of without changing its category, whether such forest land is excluded within the scope of non-business land.

If a corporation which does not engage in agriculture, livestock industry, or forestry business as its main business sells without changing its category, forest land acquired for the purpose of new construction of housing, it shall not fall under cases prescribed in the proviso of Article 84-4 (3) 4 of the Enforcement Decree of the Local Tax

Article 84-4 (3) 4 of the Enforcement Decree of the Local Tax Act

House for the Corporation

Head of Gu of the Busan Metropolitan City;

Busan High Court Decision 92Gu4529 delivered on June 25, 1993

The judgment below is reversed, and the case is remanded to Busan High Court.

We examine the grounds of appeal.

According to the reasoning of the judgment below, the court below held that the plaintiff acquired the forest land of this case as a purpose business on August 27, 1990 on the corporate register for the purpose of constructing multi-family housing, but did not use the forest land for the purpose business on March 27, 1991. Thus, the forest land of this case does not constitute non-business under Article 84-4 (3) 4 of the Enforcement Decree of the Local Tax Act, but if the forest land of this case is changed within one year from the acquisition date and used for the purpose of its unique business, the plaintiff used the forest land of this case as one of the purpose business within one year from the acquisition date of non-business, on the premise that the forest land of this case was excluded from non-business land, and the land of this case was used only for the purpose of acquiring the corporation's unique business of this case, and so long as the plaintiff's real estate sales business was included in the purpose business, it cannot be viewed as unlawful since it did not require the change of land category in Article 84 of the Enforcement Decree.

However, according to the main sentence of Article 84-4 (3) 4 of the Enforcement Decree of the Local Tax Act, if a corporation which does not engage in agriculture, livestock industry, or forestry business as its main business is directly used for its unique business, it shall be regarded as non-business land even if it is used within one year from the date of acquisition: Provided, That if it is used directly for the proper business of the relevant corporation by changing its land category within one year from the date of acquisition, it shall be excluded from the scope of non-business land, and even if it has changed its land category and used it for the proper business, it shall not be regarded as non-business land if there are justifiable reasons. Thus, if the Plaintiff sold the forest of this case acquired for the purpose of new construction of a house without changing its land category, it shall not fall under the case of the proviso of Article 84-

With respect to the sale of the forest land of this case acquired by the Plaintiff for new construction of housing without changing its land category, the court below did not examine whether there are justifiable grounds under the proviso of Article 84-4 (3) of the Enforcement Decree of the same Act, and recognized land excluded from non-business land solely for the reasons stated in its reasoning is erroneous in the misapprehension of legal principles as to land for non-business use of a corporation, which led to an incomplete

Therefore, the judgment of the court below is reversed and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Chocheon-sik (Presiding Justice)