Cho High Court Decision 2008J 3732 (Law No. 24, 2009)

Whether the remodeling construction cost is deducted from the transfer value, and whether the brokerage fee is recognized as necessary expenses.

Although the claimant submitted evidence related to remodeling, it is difficult to accept because he/she did not submit objective materials, such as financial transaction data, and submitted two specifications of the check with evidence of brokerage commission, but did not submit evidence verifying the actual amount of money.

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

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposing KRW 411,539,160 on the Plaintiff on February 14, 2008 shall be revoked.

1. Details of the disposition;

A. On November 7, 2001, the Plaintiff acquired 1,000,000 square meters of ○○○○○○○, 146, and 4.458 square meters of five parcels, and 1,704.81 square meters of 6 stories of above ground (hereinafter “the instant real estate”) and 1,704.81 square meters of above ground (hereinafter “the instant real estate”). On February 9, 2002, the Plaintiff transferred the said real estate to ○○○, ○○, and GaB (hereinafter “Ga, etc.”).

B. On May 31, 2003, the Plaintiff filed a final return on the tax base of transfer income by making the transfer value of the instant real estate KRW 1,050,000,000, the acquisition value of the instant real estate as KRW 1,000,000, and necessary expenses KRW 78,120,000.

C. On February 14, 2000, the Defendant notified the Plaintiff of the result of re-audit of capital gains tax from the director of the Central District Tax Office, and deemed the transfer value of the instant real estate as KRW 1,790,000, and notified the Plaintiff of KRW 411,539,160 for capital gains tax for the year 2002 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal on October 24, 2000 on May 14, 2000, but the Tax Tribunal rendered a decision to dismiss the Plaintiff’s claim on July 24, 2009.

[Ground of recognition] Facts without dispute, Gap 2.11 to 14, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

① The transfer value of the instant real estate includes KRW 600,000,000 in total, such as expenses for remodeling construction and purchase of office fixtures and fixtures, paid by the Plaintiff to operate a hotel. The said construction expenses constitute capital expenses, and the said construction expenses constitute necessary expenses, and the purchase cost of office fixtures and fixtures is not subject to taxation, and thus should be deducted from the transfer value, respectively.

② 70,000,000 won paid as a brokerage commission to ParkCC who arranged for the transfer of the instant real property should be recognized as necessary expenses.

Therefore, the instant disposition that calculated capital gains on transfer is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) The assertion that the cost of purchasing office and non-processed goods is included in the transfer value of the instant real estate

According to Gap evidence No. 2, while selling the real estate of this case to ParkA, the plaintiff agreed to transfer all the facilities (such as lighting, landscaping, and houseing) installed on the real estate of this case to ParkA, on the other hand, according to evidence, the plaintiff entered into a sales contract with ParkA, etc. with the purchase price of KRW 1,820,00,000 (the purchase price of the real estate of this case reduced to KRW 30,000,000) as the object of the sale, and it is only recognized that the sale contract was not calculated in relation to the house and fixtures other than the real estate of this case at the time of the preparation of the above sales contract.

In addition, according to the plaintiff's argument, Gap evidence 3, 4, 6-1 through 6, Gap evidence 9-1, Gap evidence 16-1, 2, 4, 6, and 7, and Eul's testimony is difficult to believe in light of the above facts of recognition. The plaintiff's testimony of Eul evidence 17 is that the date of the purchase of the plaintiff's electronic equipment is the transfer of the plaintiff's acquisition of the real property of this case, and the particulars of collection and expenses (Ga evidence 6-3 through 6) alleged by the plaintiff are presumed to be calculated on the basis of heavy value, and it is insufficient to recognize the above assertion in that some goods, such as fish containers, are calculated on the basis of a larger amount than the purchase cost of the new product of this case. Accordingly, it is insufficient to acknowledge the above evidence only with the statement of Gap evidence 5 and 7, and there is no other evidence to acknowledge it. Therefore, the plaintiff's assertion is without merit.

(2) The assertion that the remodeling costs and brokerage fees should be deducted from the gains on transfer.

Although the Plaintiff asserted that it should be recognized as necessary expenses since it conducted remodeling after acquiring the instant real estate, it is difficult to believe in light of the following: (a) evidence Nos. 3, 6-1, 2, 16-1, 3, 5, and 8 of evidence Nos. 1, 16-1, 3 through 5, and 8 of evidence Nos. 1, 8 of evidence Nos. 6; (b) evidence that the Plaintiff actually paid construction expenses, etc.; and (c) evidence submitted by the Plaintiff that the Plaintiff could not verify whether the said construction was actually performed; and (d) evidence Nos. 5, 7, 18-1, and 2 of evidence Nos. 1, 18-2 of this case is insufficient to recognize it. Accordingly, the Plaintiff’s assertion in this part is without merit.

In addition, the Plaintiff alleged that ParkCC should be recognized as necessary expenses since it paid 70,000,000 won to ParkCC in the course of transferring the instant real estate to ParkA, but there is no evidence as to whether ParkCC actually paid the money paid to ParkCC as an intermediary for the sale and purchase of the instant real estate, whether ParkCC is qualified to intermediate and provide consulting the instant real estate, and the amount paid to ParkCC is a large amount exceeding the statutory brokerage commission, and when the Plaintiff makes the final return of capital gains as a result of the initial return of capital gains, the above amount is not reported as necessary expenses. In light of the fact that the Plaintiff did not report the above amount to the necessary expenses, it is insufficient to recognize it by itself, and there is no evidence to acknowledge it otherwise. Accordingly, the Plaintiff’s assertion on this part is without merit.

3. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.