Business loss compensation for reconstruction of a commercial building shall be the business income.

If the owner of a commercial building registers it as a trust to the reconstruction association and receives any damage and business loss compensation due to the reconstruction promotion, it shall be deemed as compensation for the loss related to the rental business, and it shall not be deemed as compensation for the decrease in the partitioned ownership shares.

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

Article 19 (Business Income)

1. The plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

피고가 2008. 3. 20. 원고 김○○에 대하여 한 2002년 귀속 종합소득세 28,871,580원의 부과처분과 2008. 6. 14. 원고 박@@에 대하여 한 2002년 귀속 종합소득세 28,414,040원의 부과처분을 각 취소한다.

1. Circumstances of the disposition;

가. 원고 김○○은 1988. 8. 3.부터 서울 강○구 @@동 1003-1 외 3필지 지상 상가 1층 7호를, 원고 박@@는 1993. 6. 22.부터 같은 상가 1층 4호를 각 소유하였는데, 원고들은 위 각 구분소유부분을 타에 임대하여 부동산임대업을 영위하였다.

나. 그러던 중, 원고들은 2002. 9. 16. 위 지역 일대에 대하여 재건축사업을 시행하던 @@2주구정비사업조합(이하 '소외 조합'이라 한다)과 사이에, 원고들이 소외 조합에 위 상가를 재건축하게 하도록 각 구분소유부분을 제공하되, 소외 조합으로부터 기존 상가보다 1평이 증가된 재건축상가의 구분소유부분과 재건축 추진으로 인한 피해 및 영업손실보상금으로 각 1억 2,000만 원을 지급받기로 하는 계약을 체결하였고, 원고들은 그 무렵 소외 조합에 위 구분소유부분을 신탁한 후, 2002. 9. 19. 소외 조합으로부터 각 1억 2,000 만 원(이하 '쟁점 금액'이라 한다)을 지급받았다.

C. After investigating the corporate tax portion of the non-party partnership around August 2007, the defendant made each disposition to the plaintiffs as stated in the purport of the claim, including additional tax, (hereinafter referred to as the "each disposition of this case") on the grounds that the plaintiffs did not report it as business income even though they received business compensation as above in 2002.

Evidence A, evidence Nos. 1, 2, 1, 2, 7 (including abnormal numbers), and the purport of the whole pleadings.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The disposition of this case is unlawful for the following reasons:

1) The plaintiffs received KRW 120 million from the non-party partnership does not constitute business income under the Income Tax Act, which is the compensation for the difference in the land shares in the previous price owned by the plaintiffs at an average of nine square meters and compensation for business losses during the reconstruction period.

2) Although the Defendant did not impose a tax on the compensation for the reduction of the members’ share in the land within the reconstruction and redevelopment project district, it goes against the criteria for interpretation of the tax law under the Framework Act on National Taxes and the principle for prohibition of retroactive taxation.

3) Since there is no express provision or interpretation under the tax law that stipulates the issue amount as taxable income at the time of 2002 as taxable income, imposing penalty tax on the plaintiffs goes against the principle of good faith.

B. Determination

1) Whether the issue amount is business income or business income

A) Applicable legal principles

According to Article 19(1) of the Income Tax Act, income generated from agriculture, forestry, fishery, mining, manufacturing, wholesale and retail, construction, real estate business, etc. is defined as business income. Under Article 51(3)5 of the Enforcement Decree of the Income Tax Act, income generated from the transfer of land, buildings, real estate rights, stocks, or investment shares, etc. prescribed under each subparagraph of Article 94(1) of the Income Tax Act provides that the amount of income accrued or to be reverted to the relevant business shall be included in gross income. According to Article 94(1) of the Enforcement Decree of the Income Tax Act, income generated from the transfer of stocks or investment shares, etc. is defined as capital gains. In full view of these relevant provisions, if a business operator conducted a business and received from the business operator due to the expropriation or transfer of the place of business, compensation for other assets, business compensation, suspension, closure compensation, transfer compensation, etc. shall be included in gross income of the business (see, e.g., Supreme Court Decision 200Du5381, May 39, 2006).

B)Judgment

The plaintiffs leased to others the portion owned by each of the respective shares of the above prices, thereby re-building of the above prices.

From the sectional ownership of the commercial building reconstructed on September 19, 2002 at the time of registration of trust, the key amount is received as business compensation for the abolition of the above rental business, separately from the sectional ownership of the commercial building which was reconstructed on September 19, 2002. In light of the business operation contents, period, size, the payment process of the key amount and the timing of payment, etc. of the above plaintiffs, since the key amount is paid as compensation for losses incurred in relation to the lease business of the above sectional ownership of the commercial building, the key amount is not capital gains but business income included in the total amount of income, and the key amount cannot be deemed as compensation for the decrease of each sectional ownership of the rebuilding price at an average of nine square meters compared to the rebuilding area owned by the previous commercial building.

2) Whether the standard for interpreting the tax-related Acts under the Framework Act on National Taxes and the principle prohibiting taxation is violated

There is no evidence to acknowledge that the Defendant had not imposed taxes on the compensation due to the reduction in the shares of the members in the land within the reconstruction and redevelopment project district, and that there was no evidence to support the interpretation of the tax law (In addition, as seen earlier, the key amount is the amount paid as compensation for business losses related to the divided ownership of the said commercial building).

3) Violation of the principle of good faith

As seen earlier, the key amount is that even under the Income Tax Act as at the time of 2002, it constitutes business income. In the case of additional tax under tax law, the taxpayer’s intentional negligence is not considered, but does not constitute justifiable grounds that are not attributable to the breach of duty (see, e.g., Supreme Court Decision 2005Du10545, Apr. 26, 2007). Thus, even if the Plaintiffs were unable to know that the key amount before each disposition of this case constitutes business income or were not notified by the Defendant, each disposition of this case is not contrary to the good faith principle.

C. Sub-committee

Therefore, the plaintiffs' arguments are without merit.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed. It is so decided as per Disposition.