Where a contract which causes the acquisition of real estate for the purpose of auction in progress has been rescinded by agreement, the person to whom the income accrued from the auction is actually attributed.

The effect of seizure due to the registration of entry of a request for auction is only to limit the disposal of the real estate against the owner of the real estate in relation to the execution creditor, and does not prohibit the disposal of the real estate even in relation to other third parties. Thus, even in the auction procedure, the owner of the real estate may cancel the contract which is the cause of acquiring the real estate before the successful bidder pays the successful bid price in full and acquires the ownership of the real estate, and due to the cancellation of the agreement, the ownership of the real estate is naturally returned to the other party regardless of the registration. If the other party who restored the ownership of the real estate becomes an interested party in the auction procedure after the completion of the registration of ownership transfer, and becomes an interested party in the auction procedure by proving the fact of the acquisition in the auction procedure, the right to be returned from the direct auction court as an interested party in the auction procedure shall be returned to the court. If there is any surplus after the auction procedure is not an interested party in the auction procedure, even if the ownership transfer registration is not completed or the fact of the acquisition is not proven to the court of auction procedure, the income actually accruing from the auction.

Article 23 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994); Article 14(1) of the Framework Act on National Taxes; Article 548 of the Civil Act; Article 26 and Article 30 of the former Auction Act ( repealed by Act No. 4201 of Jan. 13, 1990)

Supreme Court Decision 64Ma525 Dated September 30, 1964 (No. 1292, 129) 91Nu5228 Decided February 11, 1992 (Gong1992, 1055) 92Da4581,4589 Decided May 12, 192 (Gong192,1849)

Plaintiff

Head of Daegu Tax Office

Daegu High Court Decision 93Gu136 delivered on December 10, 1993

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

1. On August 198, the court below found that the above 00,000 won was transferred to the non-party 1 who operated the above 1,00,000 won to the non-party 1, who was merely the above 00,000,000 won for the above 1,000 manufacturing business. On June 3, 198, the above non-party 1 provided the real estate as collateral and provided the loan obligation amount of KRW 1,00,00,000 to the non-party 1, and the above 0,000,000 won was exempted from the above 0,000,000,000 won was non-party 1's loan contract for the above 0,000,000 won was non-party 1's loan contract for the above 0,000,000 won for the above 0,0000,000 won. On the other hand, the court below held that the above 1,000,0000,00.

2. The effect of seizure upon the commencement of a request for auction does not only prohibit the disposal of the real estate against the owner of the real estate in relation to an execution creditor, but also against other third parties. Thus, even if the successful bidder fails to complete the registration of ownership transfer, the real estate owner may cancel the contract which causes the acquisition of the real estate for the purpose of auction until he/she acquired the ownership of the real estate after full payment of the successful bid price, and the ownership of the real estate is naturally returned to the above counter-party regardless of the registration of cancellation of the agreement. The above counter-party whose ownership of the real estate is recovered shall return the real estate to the above counter-party. If the above counter-party becomes an interested party in the auction procedure after proved the fact of acquisition to the auction court after completing the registration of ownership transfer and becomes an interested party in the auction procedure, he/she shall be entitled to receive the right to return the real estate from the auction court directly as an interested party in the auction procedure (see, e.g., Supreme Court en banc Order 64Ma525, Sept. 30, 1964).

If the facts are as acknowledged by the court below, the ownership of the real estate of this case was naturally returned to the above non-party 1 because the non-party 3, the successful bidder of the business transfer contract of this case, was cancelled before full payment of the successful bid price, regardless of its registration, and even if the above non-party 1 did not complete the registration of ownership transfer, income from the above auction should be deemed to have been actually reverted to the above non-party 1. Thus, the defendant's disposition of this case imposing capital gains tax, etc. against the plaintiff on the non-party 3, considering that the plaintiff transferred the real estate of this case to the above non-party 3, is illegal as it violates the principle of substantial taxation.

However, although it is inappropriate for the court below to determine that the income from the transfer of the real estate of this case was actually reverted to the above non-party 1 on the ground that all the bid price of this case was distributed to the creditors of the above non-party 1, it does not affect the conclusion of the judgment

3. Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Cho Chang-tae (Presiding Justice)