(a)requirements for calculating the gains on the transfer of real estate by the multiple method;

(b) Whether the method of determining the standard market price applied in a specific area has been delegated to the Commissioner of the National Tax Service

(c) Method of calculating gains on transfer where the ratio is not determined because the transferred asset is not located in the specific area at the time of its acquisition;

A. In order to calculate gains on transfer of real estate by applying the percentage method under Article 115(1)1 (a) of the Enforcement Decree of the Income Tax Act, the real estate must be located in the same specific area as at the time of its transfer, as well as at the time of its acquisition, and its interpretation does not change on the ground that Article 115(3) of the Enforcement Decree was newly established.

B. In full view of the purport of Articles 115(1)1 and 115(2) of the Enforcement Decree of the Income Tax Act, it is concluded that the said provision only delegated the rate corresponding to the standard market price at the time of transfer or acquisition by the Commissioner of the National Tax Service with respect to real estate in a specific area, not delegated

(c) The provisions of Article 115 (3) of the Enforcement Decree of the Income Tax Act shall apply to a specific area at the time of acquisition of the transferred asset, though the transferred asset belonged to the specific area at the time of its acquisition: Provided, That in case where there is no provision to apply the ratio, and where the ratio has not been determined because it is not located in the specific area at the time of its acquisition, the standard market price according to

Articles 60, 23(4), 45(1)1 of the Income Tax Act, Article 115 of the Enforcement Decree of the Income Tax Act

A. C. Supreme Court Decision 86Nu576 delivered on January 20, 1987. Supreme Court Decision 84Nu237 delivered on March 26, 1985. Supreme Court Decision 85Nu948 delivered on March 11, 1986.

Plaintiff

Head of the Cleanness Tax Office

Seoul High Court Decision 86Gu320 decided August 25, 1986

The part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the Seoul High Court.

The defendant's appeal is dismissed.

The costs of appeal dismissed shall be assessed against the defendant.

1. The defendant's grounds of appeal are examined.

Article 60 of the Income Tax Act delegates the determination of the standard market price under Articles 23 (4) and 45 (1) 1 of the same Act under the conditions as prescribed by the Presidential Decree. Based on this, Article 115 of the Enforcement Decree of the same Act provides that the value assessed by the rate method in the case of land and buildings prescribed by the Commissioner of the National Tax Service, and that in other areas, the standard market price under the Local Tax Act shall be the standard market price. [In the case of the proviso of paragraph (1) 1 (a) and (b), the former part of subparagraph 1 (b)] and paragraph (2) of the same Article provides that the method of calculating the standard market price under the Local Tax Act at the time of transfer [in the case of the proviso of paragraph (1) 1 (b), the rate shall be determined by the amount computed by multiplying the rate determined by the Commissioner of the National Tax Service based on the actual market price of the land and building similar to that calculated by the above method, and that the method of calculating the profits from the transfer of real estate shall be determined differently by 16 (Article 17 (2.15).7).

see, e.g., Supreme Court Decision

According to the facts established by the court below, the plaintiff's acquisition of the land of this case is 197 March 25, 1977 and publicly announced in a specific area. The plaintiff's transfer of the land of this case is 15 February 15, 1978, and since it is clear that the land of this case was not located in the specific area at the time of its acquisition, and when the Commissioner of the National Tax Service determines the method of calculating the real estate acquisition price in a specific area publicly notified as the standard market price table by the National Tax Service on February 15, 1977, the real estate acquired after January 1, 197 shall be calculated by multiplying the land grade at the time of its acquisition by a multiple investigated by the Enforcement Decree of the Income Tax Act (Presidential Decree No. 8960 of Apr. 24, 1978) and Article 115 (1) 1 and 170 (2) of the Enforcement Decree of the above Act is unlawful. Thus, the court below's determination of the acquisition price of the above land is justified.

2. The plaintiff's grounds of appeal are examined as follows.

Article 115(3) of the Enforcement Decree of the Income Tax Act provides that the standard market price at the time of its acquisition shall be the value converted according to the method as determined by the Ordinance of the Ministry of Finance and Economy in case of assets in a specific area under Article 115(1)1(a) of the Enforcement Decree of the Income Tax Act with no ratio of the specific area at the time of its acquisition. This is interpreted as a provision applicable in case where the transferred asset is located in a specific area at the time of its acquisition but there is no ratio of the ratio (see Supreme Court Decision 86Nu576 delivered on January 20, 1987). In case where the transferred asset is not located in a specific area at the time of its acquisition and there is no ratio of the ratio, the standard market price by the above ratio or conversion method shall not be applied, and both the transfer value and the acquisition value shall be calculated based on the standard market price under

As seen earlier, since the land was located in a specific area at the time of its transfer but the ratio was not determined at the time of its acquisition, both the transfer value and the acquisition value shall be calculated by the taxation standard amount under the Local Tax Act. The court below decided that the transfer value of the land should be calculated by the above ratio method, and the acquisition value should be calculated by the above conversion method. The court below's decision is erroneous in the misapprehension of the legal principles as to the calculation of the standard market price.

3. Therefore, the part of the judgment of the court below against the plaintiff is reversed, and that part of the case is remanded to the court below. The defendant's appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Dal-sik (Presiding Justice)