The imposition of capital gains tax according to the actual transaction amount is legitimate.

The transfer income tax imposed on the basis of the actual transfer value confirmed by the agency by denying the charter contract with false statement of the transfer price is legitimate.

Article 96 of the Income Tax Act

Seoul Administrative Court-2017-Gu Partnership-68943 Revocation, etc. of Capital Gains Tax Imposition Disposition

AA

a) the Director of the Tax Office

December 1, 2017

2, 2018

1. The part concerning the claim for payment of money among the lawsuits of this case shall be dismissed.

2. AA’s remaining claims are dismissed.

3. Litigation Costs shall be borne by AA.

Aaa revoke the disposition of capital gains tax of the year 2015 vested in AA on August 22, 2016, the imposition of capital gains tax of the 2015-year capital gains tax, capital gains tax, and capital gains tax of the 2015-year capital gains tax shall be revoked. Aa shall pay to AA 120,000,000 and an amount calculated at the rate of 15 percent per annum from the day following the delivery of a copy

1. Details of the disposition;

A. On November 12, 2014, AA made a sales contract with BB and CCC (hereinafter “Buyers”) stating that: (a) 00,000,000 square meters of a multi-family house owned by AA and KRW 506.7 square meters of a multi-family house on the ○○○○-dong ○○-dong ○○-○○ 244.1 square meters; and (b) 80,000,000 won of a down payment, an intermediate payment, KRW 250,00,000 on the date of the contract, shall be paid on January 30, 2015.

B. Thereafter, on March 31, 2015, AA reported the transfer income tax to Aa with the transfer value of the instant real estate at KRW 540,000,000.

C. AA conducted a tax investigation of capital gains tax on AA, and notified AA of a correction of capital gains tax of KRW 49,98,910 (including additional tax) on August 22, 2016, considering that the actual transfer value of the instant real estate was KRW 690,00,000,00 (hereinafter “instant disposition”).

D. AA, dissatisfied with the instant disposition, filed an objection on September 30, 2016, and filed an appeal with the Tax Tribunal on December 30, 2016, and the Tax Tribunal dismissed the said claim on May 2, 2017.

Facts without dispute over the basis of recognition, Gap evidence Nos. 1, 2, 10, 22, Eul evidence Nos. 1 and 10, and the purport of the whole theory

2. Determination on the legitimacy of the claim for damages among the instant lawsuit

(a) the main safety defense of aa.

In the claim for damages, aa does not have the capacity to be a party and the standing to be a party, and this part of the claim against A is unlawful.

B. Determination

AA asserts that aa was suffering from mental harm, such as receiving hospital treatment due to the illegal manipulation of evidence in Aa in connection with the instant disposition, etc., and Aa claimed 120,000,000 won as punitive damages and damages for delay thereof.

However, aaa is merely an administrative agency which has rendered the instant disposition, and thus, is recognized as eligible to aa in an appeal litigation pursuant to Article 13(1) of the Administrative Litigation Act, and thus, cannot file a lawsuit seeking a judgment of performance of damages against Aa, which is not the subject to whom the obligation is attributed (see, e.g., Supreme Court Decision 89Nu3557, Feb. 27, 1990). Therefore, the part concerning the claim for damages in the instant lawsuit is unlawful (only on the other hand, as seen below, the instant disposition is lawful and there is no evidence to prove that public officials belonging to Aa have fabricated evidence, and thus, AA’s assertion cannot

3. Determination on the legitimacy of the instant disposition

(a) AA’s assertion

1) The transfer amount of the instant real estate is KRW 540,00,000, and AA sells more than the market price, which is paid KRW 40,000,000 as compensation for losses from the buyer, but this does not include the amount of transfer. However, Aa includes the above compensation for losses, while AA pays KRW 90,00,00,00,00 of the existing loans of AA, even though AA has been repaid by the buyer, Aa manipulates the evidence as if the buyer repaid the amount borrowed and received the remainder of KRW 30,00,00,00 from AA, and thus, A disposition of this case was unlawful, on the premise that the transfer amount is KRW 690,00,000.

2) In addition, the imposition of penalty tax, among the instant disposition, is unlawful since there are justifiable grounds for not being able to impose penalty tax, and it violates the principle of retroactive taxation prohibition.

B. Relevant statutes

It is as shown in the attached Form.

C. Facts of recognition

1) Upon receipt of a civil petition by which KRW 540,00,000 of the transaction amount reported with respect to the sale and purchase of the instant real estate between AA and the buyer was false, the head of ○○○ Metropolitan City ○○○○ (hereinafter referred to as the “head of ○○○○○○”) investigated the fact of the reported amount and the methods of raising funds for the buyers.

2) On March 30, 2015, the buyer was presented to the head of ○○○○○○ to sell the real contract amount of the instant real estate at KRW 690,000,000, and at KRW 540,000 upon the cancellation of a contract, the buyer was asked to sell and purchase KRW 690,000,000. The buyer paid KRW 80,000 for the intermediate payment and KRW 250,000 for the intermediate payment and KRW 360,000 for the remainder of 120,000,000 for the remainder of 240,000,000 for the previous residence and the remainder of 240,000,000 for the check. DD arranged to sell and purchase the instant real estate, and the amount reported to the head of ○○○○ on March 31, 2015 was actually paid at KRW 540,000 for the check amount.

3) On November 12, 2014, the buyer paid AA the down payment of KRW 80,000,000 to AA, and on December 9, 2014, the buyer paid the intermediate payment of KRW 250,000,000.

4) After that, around January 29, 2015, BB obtained a loan of KRW 120,000,000 from the △△ Bank located in the △△△ Bank on January 29, 2015. Around that time, BB issued two copies of the 100,000,000 KRW check issued by the Korea △△ Bank on January 28, 2015, and one copy of the 50,000,000 KRW check issued by the Korea △△ Bank around that time.

5) On January 29, 2015, immediately after the buyer BB obtained the above loan, around 14:04, the amount of KRW 90,134,531 (i.e., principal + KRW 90,00,000 + agreed interest KRW 134,531) was repaid at the △△ branch of the △△△ Bank located in the △△△△△ Bank. Accordingly, the mortgage-backed security established as of September 17, 2001 by making the debtor of the instant real estate as AA and the mortgagee as the △△ Bank as the △△ Bank was terminated on the same day.

6) According to the Ministry of Land, Infrastructure and Transport’s inquiry, the transaction price of multi-family houses with a similar area near the instant real estate from October 2014 to December 2014 is approximately KRW 650,000,000, around KRW 755,000.

There is no dispute over the basis of recognition, Gap evidence Nos. 16, 22, and Eul evidence Nos. 3 through 11 (including each number number), each of the overall purport of the arguments and arguments Nos. 11-1 and 2 (AA), and each of the above documents is alleged to the purport that the above documents were the above-mentioned evidence No. 11-1 and 2. However, each of the above documents does not have any material to deem that the documents were specifically forged as a receipt verifying and preparing the details of the BB’s loan performance and the details of the repayment of loans by the △△△△△△△ branch of △△△△△ branch of the △△△△ Bank, and there

D. Determination

1) Comprehensively taking account of the above facts acknowledged and the overall purport of the evidence and arguments as seen above, it may be recognized that the actual purchase price of the instant real estate that the buyer paid to AA is KRW 690,000,000 (=the down payment of KRW 80,000 + the intermediate payment of KRW 250,000,000 + the remainder payment of KRW 360,000 + the remainder payment of KRW 360,000,000). Contrary thereto, the entry of evidence Nos. 3 and 4 is not believed, and the remainder of the evidence submitted by AA does not interfere with the above recognition. Accordingly, it is lawful for AA to regard the transfer price of the instant real estate as KRW 690,00,000 as the transfer price of the instant real

2) Meanwhile, in order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under tax law is imposed without justifiable grounds by a taxpayer. Administrative sanctions imposed as prescribed by the Act in the event of a violation of the tax liability, etc. are imposed on a taxpayer, unless there is a justifiable reason not to be attributable to a taxpayer’s failure to perform his/her tax obligation, such as where the taxpayer is reasonably deemed to have been unaware of his/her tax liability or where it is unreasonable for him/her to expect the performance of his/her tax obligation, etc. (see, e.g., Supreme Court Decision 2001Du8100, Feb. 14, 2003). As seen earlier, as long as AA falsely reported the transfer value, AAA is also lawful to impose additional tax due to a violation of the tax liability.

4. Conclusion

Therefore, since the part of the claim for payment of the money in this case is unlawful, it shall be dismissed, and the remaining claims are dismissed, and it is so decided as per Disposition.

Relevant statutes

(1) The former Income Tax Act (Amended by Act No. 13206, Mar. 10, 2015)

Article 94 Scope of Transfer Income

(1) Capital gains shall be the following incomes, generated in the relevant taxable period:

1. Income generated from transfer of land (referring to land category subject to registration on the cadastral record (.........) under the Act on Land Survey, Waterway Survey and Cadastral Records) or buildings (including facilities and structures attached to a building);

Article 96 (Transfer Price)

(1) The transfer value of assets under the subparagraphs of Article 94 (1) shall be the actual transaction value between a transferor and a transferee at the time of transfer of such assets (hereinafter referred to as "actual transaction value").

Article 114 (Determination, Revision and Notification of Tax Base for Transfer Income and Amount of Tax)

(2) If any omission or error exists in the details of return filed by a person who files a preliminary return under Article 105 or a person who files a final return under Article 110, the head of a regional tax office or the head of a regional tax office having jurisdiction over

(6) In applying paragraph (4), where the tax base return or final return on capital gains is made based on the actual transaction price, if the returned value is confirmed differently from the fact, the tax base and amount of capital gains shall be corrected by the transfer value or acquisition value, and the tax base and amount of capital gains shall be corrected.