Seoul Administrative Court-2015-Gu Group-12918 ( October 15, 2016)

Revocation of disposition imposing capital gains tax

Whether the instant construction cost can be deducted as necessary expenses when calculating capital gains tax by deeming it as capital expenditure.

Article 97 of the Income Tax Act

2016Nu61244 Revocation of revocation of imposition of transfer income tax

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Head of Yeongdeungpo Tax Office

November 7, 2016

December 1, 2016

1. Of the judgment of the first instance court, the part against the defendant in excess of the order to revoke is revoked, and the plaintiff's claim corresponding to the revocation portion is dismissed.

The Defendant’s disposition of imposition of capital gains tax of KRW 43,207,450 for the Plaintiff on May 12, 2014, which exceeds KRW 39,56,207,00, shall be revoked.

2. The defendant's remaining appeal is dismissed.

3. Of the total litigation costs, 90% is borne by the Plaintiff, and the remainder is borne by the Defendant.

the jurisdiction of the Gu, the place of service in a port, and the scope of the judgment of this court

1. Purport of claim

The Defendant’s disposition of imposition of capital gains tax of KRW 43,207,450 for the Plaintiff on May 12, 2014 is revoked.

2. Purport of appeal

The part against the defendant in the judgment of the first instance shall be revoked, and the plaintiff's claim corresponding to the revoked part shall be dismissed.

3. Scope of the judgment of this court.

The Plaintiff sought the revocation of the disposition of imposition of capital gains tax of KRW 43,207,450 for the year 2009, and the court of first instance revoked the part exceeding KRW 23,348,420 among the above disposition and dismissed the remainder of the Plaintiff’s claim. Since only the Defendant appealed against the Defendant, the scope of the judgment of this court is limited to the part against the Defendant in the judgment of first instance.

1. Partial citement of judgment of the first instance;

The reasoning of the judgment of this court is as follows: (a) it is identical to the relevant part of the reasoning of the judgment of the court of first instance (from 1.1 to 2.2 disposition; (b) it is legitimate; (c) it is so accepted in accordance with Article 8(2) of the Administrative Litigation Act; and the main text of Article 420 of the Civil Procedure Act.

2. Parts that vary from the judgment of the first instance court;

(2) We examine the sequence 1 of this case.

(A) In addition to the video of Gap evidence 6, since the plaintiff's acquisition of the real estate of this case on March 9, 2005 through a voluntary auction procedure, it is recognized that the real estate of this case was used as a farming place and a tent, wall, etc., it is necessary to restore the damaged part of the real estate after the plaintiff acquired the real estate of this case.

(B) First of all, the following circumstances acknowledged by adding the whole arguments to health stand, Gap evidence 10, Eul evidence 2 as to the No. 1 of the instant table construction works, namely, the plaintiff prepared a contract for construction works for the construction works, electricity, lighting, painting construction works, and air conditioner construction works, which are the representative of c on April 20, 2005, with KRW 9,418,000,000, which are deemed to have been adjusted to KRW 920,000,000 for the plaintiff before the preparation of the said contract, but it is difficult for the plaintiff to pay KRW 110,000 to b on May 16, 2005 and the plaintiff actually paid KRW 20,000 for the construction works in the name of d 20,000,000 which appears to have been sold to d 20,000,000 won for the construction works executed by d 204,205.

Therefore, the plaintiff's 7,100,000 won, which appears to have been paid directly to b in relation to the removal work, electric and lighting work, painting work, painting work, and air-conditioning work, from among the Nos. 1 of this case's table, shall be deemed as necessary expenses, but there is no evidence to prove that the plaintiff paid b more than the above 7,100,000 won to b. Thus, this part of the plaintiff's claim is with merit within the above 7,100,000 won.

(3) We examine the sequence 4 to 6 of the instant table.

(A) In addition to the images of Gap evidence No. 8, it is recognized that the plaintiff divided the real estate of this case into 1209 and 1209-1 around June 2008. Thus, it is recognized that the construction of separating the real estate of this case was implemented around that time.

(B) First of all, as to the design cost Nos. 4, 4, 5, 2-2, and 4 of the table of this case, the following circumstances acknowledged by adding the whole purport of the pleadings to each of the statements in the evidence Nos. 4, 5, 2-2, and 4, i.e., when the real estate of this case was divided into 1209 and 1209-1, the preparation of the drawing can be deemed to have been entrusted from e at e at the comprehensive architectural office. The e at the general architectural office on June 20, 208 issued a receipt for KRW 50,000 to d and d and similar to the name of d and e, the representative director of the Plaintiff, d and d and d, a lessee of the real estate of this case, cannot be ruled out, and considering that there was no evidence to acknowledge that the Plaintiff had paid the design cost of this case to e at all, the Plaintiff’s assertion that the above design cost was insufficient.

(C) Next, among the Nos. 5 of the table of this case, the following circumstances are acknowledged as being added to the entire pleadings as to the temporary installation works, wall installation works, wooden works, basic wood mold works, glass works, air conditioners moving works, entrance removal works of spaces, metal works, electrical construction works and the cost of finishing construction works, including evidence Nos. 12 and 13, which are acknowledged as being added to the whole pleadings. In other words, C Co., Ltd. issued a written estimate stating KRW 44,50,000 in the name of the Plaintiff on June 20, 2008. However, according to the above written estimate, electrical construction works are written to the effect that it will select and implement a specialized company. Considering that the above written estimate was not sufficient to acknowledge that the Plaintiff’s construction costs were the same as the above written estimate of construction works, the Plaintiff’s payment of the cost of construction works under the written estimate cannot be concluded as being identical to the above written estimate of construction works.

(D) Next, the following circumstances, which are acknowledged as adding the whole purport of pleadings to the items in the evidence Nos. 13, 13, 2-2, and 4 as to the electrical construction cost No. 6 of the table of this case, i.e., a companyff issued a written estimate of KRW 4,300,000 for the electrical construction cost of d D D DD in the future on July 2, 2008. It cannot be ruled out that the possibility that D or D, which is the lessee of the real estate of this case, had entered into the said electrical construction contract with D or D, which is the lessee of the real estate of this case, was not submitted. Considering the fact that the documents such as financial transaction details and receipts that the plaintiff paid the above electrical construction cost are not submitted, this part of the plaintiff's assertion is without merit.

(4) The theory of lawsuit

Therefore, since the plaintiff spent the total of KRW 7,100,000 (part of the 1 construction work) as necessary expenses, the above KRW 7,100,000 shall be deducted from the transfer value.

(d) Calculation of justifiable capital gains tax;

If the transfer income tax to be paid by the Plaintiff based on the above facts of recognition is calculated, the portion exceeding KRW 39,566,207 of the disposition of this case is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified within the above scope of recognition, and the remaining claims are dismissed for lack of merit. Since the part against the defendant who ordered cancellation exceeding 39,566,207 won among the disposition of this case among the judgment of the court of first instance is unfair as the conclusion is different, the defendant's appeal against this case is accepted, and the plaintiff's claim corresponding to the revoked part is dismissed, and the defendant's remaining appeal is dismissed for lack of merit. It is so decided as per Disposition.