Early High Court Decision 2012J053 (Law No. 13, 2012)

It is difficult to recognize that the previous farmland has been de factoed for not less than three years;

In light of the fact that there was a trend of continuous increase in revenue while engaging in retail business during the previous farmland retention period, it is difficult to recognize that part of the previous farmland has been used as an access road to the open site or as a place of business, and that there was no record of compensation for agricultural crops at the time of expropriation in light of the fact that there was no record of compensation for agricultural crops.

2012Gudan1752 Such revocation as transfer income tax, etc.

LAA

Secretary General of the Office of Government Affairs

October 15, 2012

November 12, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of capital gains tax of 000 won and special rural development tax of 000 won against the Plaintiff on March 1, 2011 shall be revoked.

1. Details of the disposition;

가. 원고는 2004. 6. 17. 서울 중랑구 OO동 000 답 439㎡ 및 같은 동 000 답 242㎡， 같은 동 00 답 300㎡(이하 '이 사건 종전농지'라고 한다)를 취득하여 보유하고 있던 중 2009. 9. 1. 에스에이치공사에게 위 OO동 000 및 00 번지 토지를 2009. 8. 11.자 수용을 원인으로 양도하였고， 2009. 10. 7. 한국철도시설공단에게 위 OO동 000 번지 토지를 2009. 10. 6.자 공공용지의 협의 취득을 원인으로 양도하였다.

B. After that, on November 12, 2009, the Plaintiff acquired a land of 000 Ori-ri 000, and 000 ri-ri 00 as substitute farmland.

C. On December 4, 2009, the Plaintiff calculated the transfer value of the previous farmland in this case by calculating the transfer value of KRW 000, and the acquisition value of KRW 000, and other necessary expenses (banking construction cost) as KRW 000, and reported and paid the transfer income tax with the tax amount reduced or exempted according to the farmland substitute land as KRW 00.

D. On March 1, 2011, the Defendant denied capital gains tax reduction or exemption pursuant to farmland substitute land on the ground that it is difficult for the Plaintiff, and on the ground that it is difficult for the Plaintiff to regard the previous farmland as one of three years or more, the provision on capital gains tax reduction or exemption pursuant to farmland substitute land under Article 77 of the Act on Special Cases concerning Taxation Restriction (amended by Act No. 9921, Jan. 1, 201; hereinafter the same shall apply) was applied, and 000 won out of the embling construction cost reported as necessary expenses was not verified by objective data, and on March 1, 201, the Plaintiff corrected and notified the Plaintiff of KRW 00 and KRW 000 for special rural development tax for the previous farmland in 209.

E. On June 10, 201, the Plaintiff appealed and filed an objection on June 10, 201. On August 25, 2011, the director of Central District Tax Office rendered a decision to correct capital gains tax by applying the reduction or exemption of capital gains tax on this portion as 25/100 on the ground that the Plaintiff received the transfer proceeds as bonds, among the transfer proceeds of 00 m20 m30 m30 m30 m3,000 m3,000 m3,000 m242 m3,000 m3,000 m3,000 m3,000 m3,000 m3,000 m3,000 m3,00 m3,000 m3,00

F. On November 23, 2011, the Plaintiff dissatisfied with the instant disposition, brought an appeal with the Tax Tribunal, and the Tax Tribunal dismissed the said appeal on April 13, 2012.

[Ground of Recognition] The facts without dispute, Gap evidence 1 to 3, Eul evidence 1 and 11 (including household numbers), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

① Since the Plaintiff’s previous farmland was self-defluenced for more than three years, capital gains tax should be reduced or exempted pursuant to Article 70 of the Tax Special Act, and ② embankinged to use the previous farmland as farmland, and paid KRW 000 as the price therefor, the Plaintiff’s embanking cost should be recognized as necessary expenses.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Judgment as to the plaintiff's proposal No. 1

According to Article 70 (1) of the Restriction of Special Taxation Act, and Article 67 (1) and (2) 1 of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 22037, Feb. 18, 2010), and paragraph (3) 1 of the same Article, a person who resides in the previous farmland for at least 3 years and directly cultivates other farmland within 1 year (or 2 years if the land is purchased by consultation or expropriated pursuant to the Act on Acquisition of and Compensation for Land, etc. for Public Works or other Acts) after residing in the new farmland for 3 years or longer, and the area of the farmland to be newly acquired is 1/2 or more of the area of the farmland to be transferred, and 1/100 or more of the existing farmland for 3 years or more, and 1/100 or more of the existing farmland for 3 years or more, and 1/6 years or more, and the previous farmland for 3 years or more, should be interpreted to include the farmland for cultivation.

① From May 1, 2001, the Plaintiff continued to increase the revenue amount of the previous company of this case even after acquiring the farmland of this case, such as: (a) the Plaintiff, from OF 000 OF 00 OF 00 OE 200, engaging in Seodaemun-gu retail business; (b) the revenue amount was KRW 000 in 2004, KRW 000 in 2005, KRW 000 in 2006, KRW 000 in 2006, and KRW 000 in 200 in 2008, and KRW 000 in 2009.

(2) The part of the land No. 00 O-dong prior to subdivision is used as the access road to the open space of the K Construction Business, which is engaged in the joint plate from June 200 to the time the land was expropriated, and the wholesale and retail business of wood.

③ From April 1, 2007 to April 1, 2009, the Plaintiff leased 100 square meters (100 square meters (100 square meters) out of the 00 O-dong land before division to the SeoJ that had operated the manufacturing business under the trade name of the second industry, and the SeoJ used the said land as the place of business of the second industry for the said period.

④ According to the aerial photography dated May 3, 2006 and November 15, 2007, and November 11, 2008, concerning the previous farmland of this case, it appears that the previous farmland of this case was not used as farmland at the time when the aerial photography was taken (i.e., the land being used as farmland in the vicinity of the previous farmland of this case does not have any trace to regard that the high ditches, etc. of the aerial field were used as farmland in the previous farmland of this case, and that only from the aerial photography on November 21, 2009, part of the previous farmland of this case was used as farmland.

⑤ There is no difference between the content of compensation for obstacles resulting from the expropriation of the previous farmland of this case and the content of compensation for crops.

(6) As of July 2, 2009, the farmland ledger (No. 11) states that the Plaintiff was self-fluenced with the previous farmland of this case, but the said farmland ledger was first prepared on July 3, 2009, and it is insufficient to recognize that the Plaintiff had self-fluenced with the previous farmland of this case for not less than three years only on the sole basis of the above farmland ledger.

➆ 원고가 이 사건 종전농지를 자경하였다는 사실을 뒷받침하는 증거라고 주장하며 제출한 '농지 경작사실 현지확인 조사결과 복명서'(갑 제6호증)에는 조사당시인 2009. 7. 3.경 원고가 이 사건 종전농지에서 열무， 오이， 옥수수， 상추 등을 경작하고 있다고 기재되어 있으나， 이는 조사시점에 원고가 이 사건 종전농지를 자경하고 있다 는 사실만을 나타낼 뿐이고，위 증거만으로 원고가 3년 이상 이 사건 종전농지를 직접 경작한 사실을 인정하기에는 부족한 점

➇ 오히려 위 복명서의 조사결과에 "KK건업의 직원에게 문의한 결과 작년까지 공사 자재를 쌓아 놓던 곳에 2009. 1.부터 농지소유자인 원고가 직접 개간하여 주2-3회 정도 농지를 방문하여 지속적으로 채소를 경작하고 있음을 확인함"으로 기재되어 있는 점에 비추어 볼 때 2009년 이전에는 이 사건 종전농지가 농지로 사용되지 않고 있었다고 보이는 점

9) Since the Plaintiff filled the previous farmland in the upper half of 2008 and the fill up a confirmation letter to the effect that the Plaintiff, who was an operator of the K Construction Business, has cultivated houses, stuffs, and vegetables, etc. on the remaining land except the land used by the K Construction and the II Industries after the filling up construction was completed, and even according to the contents written in the confirmation letter, it is difficult to deem that the Plaintiff was not directly engaged in the previous farmland for at least three years.

(2) Judgment as to the plaintiff's proposal B

Capital expenditures included in necessary expenses of transferred assets refer to expenses, etc. incurred for the change of the purpose of use, remodeling or use of the transferred assets (see, e.g., Article 97 of the Income Tax Act and Article 163 of the Enforcement Decree of the same Act), and the tax authority bears the burden of proof in principle as necessary expenses for the determination of taxable income, but the tax authority has the burden of proof in favor of the taxpayer and the basic materials so that it is difficult for the taxpayer to prove. Thus, when it is reasonable for the taxpayer to prove necessary expenses in consideration of difficulty in proof or equity between the parties, it is difficult for the taxpayer to bear the burden of proof (see, e.g., Supreme Court Decisions 2002Du1588, Sept. 23, 2004; 2006Du16137, Oct. 26, 2007).

① On November 1, 2008, the Plaintiff and MM Construction Co., Ltd. (hereinafter referred to as “MM Construction”) entered into a contract with MM Construction on the condition that the Plaintiff would contract for the instant previous farmland at KRW 000 (hereinafter referred to as the “instant construction contract”). The annual NN, the representative director of MM construction, was present at the investigation conducted on October 6, 2010 in MM construction, and was present at MM construction, around September 6, 2009 at MM construction, to prepare a quotation and construction contract form in the name of MM construction, and did not visit the previous farmland, and did not actually perform construction work, and stated that there was no amount of construction work paid.

② MM construction is a corporation that was ex officio closed on December 31, 2008, and does not have any value-added tax and corporate tax in relation to the instant construction contract.

③ The Plaintiff failed to submit objective evidentiary data, such as details of financial transactions, with respect to the payment of the price related to the filling up of the previous farmland of the instant case.

3. Conclusion

Then, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.