Supreme Court-2015-Du-48266 ( December 10, 2015)

Cho Jae-2013-Seoul Government-2688 ( October 15, 2013)

Interpretation of "the date of use profit" under Article 78 (3) of the former Enforcement Rule of the Income Tax Act

Even if the assignee obtained the approval from the transferor to use and manage the assets which are the objects of sale, if it is merely a temporary preservation, maintenance, or management of the assets, or a temporary use for a limited purpose, such approval date does not constitute "the date of use profit under the provisions of this case."

Article 162 of the Income Tax Act (Time of Transfer or Acquisition)

2015Nu70920 Revocation of disposition rejecting capital gains tax rectification

AA and 2 others

BB Head of the Tax Office and one other

Supreme Court Decision 2015Du48266 Decided December 10, 2015

July 14, 2016

August 18, 2016

1. All appeals filed by the plaintiffs are dismissed.

2. The plaintiffs are responsible for total costs of the lawsuit after the filing of the appeal.

The judgment of the first instance is revoked. The defendant (the appointed party, hereinafter referred to as "the defendant") revoked the disposition of refusal of correction of KRW 000,000,000 capital gains tax against the plaintiff AA on February 14, 2013, the defendant's disposition of refusal of correction of KRW 000,000 capital gains tax against the plaintiff AC on February 18, 2013, and the decision of refusal of correction of KRW 00,000 capital gains tax (hereinafter referred to as "CC head") and the decision of the selection director of theCC head of the tax office on March 18, 2013 against the plaintiff AB.

1. Quotation of judgment of the first instance;

The reasoning of this court's judgment is as stated in the judgment of the court of first instance except for the second to 16 pages 17 through 16 of the judgment of the court of first instance as follows. Thus, it shall be cited in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

(2) The main part shall be the part

1) Article 162 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010; hereinafter the same) which provides for the time of transfer or acquisition of assets pursuant to delegation of Article 98 of the former Income Tax Act (amended by Presidential Decree No. 9897, Dec. 31, 2009; hereinafter the same) provides that the time of transfer of assets is, in principle, the date of settlement of the price of the assets concerned, and Article 162 (3) of the former Enforcement Decree of the Income Tax Act provides that in cases of a long-term installment period prescribed by Ordinance of the Ministry of Strategy and Finance under subparagraph 3, the date of receipt of ownership transfer registration, delivery, or use and profit-making, whichever comes earlier (hereinafter referred to as the "instant provision"), and Article 78 (3) of the former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Strategy and Finance, Mar. 28, 2011>

The "use profit date" stipulated in the provisions of this case includes not only the date the transferee starts to use and profit from the assets which are the objects of sale, but also the date on which the transferee can use and profit from the assets which are the objects of sale. However, even if the transferee obtained a consent from the transferor to allow the transferee to use and manage the assets which are the objects of sale, if it is merely a temporary preservation, maintenance, or management of the assets or a temporary use for the limited purpose, the transferee does not allow the transferee to use and profit from the assets independently, and such approval date does not constitute the "use profit date" stipulated in the provisions of this case.

2) In full view of the respective descriptions of Gap evidence Nos. 1, 2, 5, 9, 11, 12, Eul evidence Nos. 4 and 5 (including each number), and the overall purport of the pleadings, the following facts may be acknowledged.

A) On October 1, 2004, the Plaintiffs concluded a sales contract to sell the instant land used as orchard in excess of KRW 000,000,000,000 as the Plaintiffs owned 1/3 shares, respectively, with the payment of KRW 000,000,000 at the time of the contract by dividing the purchase price, the first intermediate payment of KRW 00,000,000 as the first intermediate payment on November 1, 2004, KRW 000,000 as the second intermediate payment on March 2, 2005, and KRW 00,000,000 as the remainder on December 15, 2009, respectively.

B) At the time of the instant purchase and sale contract, the Plaintiffs and Dental established a special agreement on the following grounds: (a) the instant land cannot be transferred under the name of Dental Institute immediately under the relevant laws, such as the Farmland Act; and (b) the Plaintiffs issued a written consent for land acquisition at the time of receiving the second intermediate payment so that Dental Institute can use the instant land as the site of the EE Institute; (b) the Plaintiffs thereafter provided various administrative documents for authorization and permission until the transfer of ownership; (c) the Plaintiffs bear the burden on the Plaintiffs; and (d) the documents necessary for the transfer of ownership are provided when it is possible to transfer ownership in the name of Dental Institute.

C) Accordingly, the Plaintiffs received the second intermediate payment on March 3, 2005, and delivered a written consent to the application for the acquisition of the instant land to the Korea Development Institute. However, on December 15, 2009, the Plaintiffs continued to use the instant land as orchard until the remainder is paid from the Korea Development Institute. The taxes on the instant land up to that time were also borne by the Plaintiffs according to a special agreement.

D) The instant land was incorporated into a school site development project around August 2010, and the ownership transfer registration was completed on September 1, 2010.

3) Examining these facts in light of the legal principles as seen earlier, even if the Plaintiffs delivered the written consent to the Plaintiff on March 3, 2005 to acquire the land of this case, it is merely limited to the Plaintiff’s offering of convenience for the Plaintiff to obtain various kinds of authorizations, such as the determination of school facilities on the land of this case under the condition that the Plaintiff continued to use and profit from the land of this case, and thus, the delivery date of the written consent to acquire the land of this case stipulated in the said special agreement cannot be deemed as the “use profit date” stipulated in the said special agreement. The Plaintiff did not change on March 4, 2005 on the land of this case on the following grounds: (a) the date of issuance of the written consent to acquire the land of this case cannot be deemed as the “use profit date” stipulated in the said special agreement; (b) the Plaintiff created a collateral security right of maximum debt amount of KRW 0 billion in the name of

2. Conclusion

Since the judgment of the first instance is justifiable, the plaintiffs' appeal is dismissed in entirety due to the lack of grounds.