(a) Where only evidential documents on the actual transfer value are submitted in making the final return on tax base, the method of calculating transfer marginal profits;

(b) The scope of transfer margin subject to taxation where the transfer margin exceeds the actual transfer value under the standard market price; and

A. According to the provisions of Articles 23(4) and 45(1)1 of the former Income Tax Act (Act No. 3576, Dec. 21, 1982); and Article 170(4)3 of the same Enforcement Decree (Presidential Decree No. 11578, Dec. 31, 1982); in case where assets are transferred, if evidential documents are submitted to confirm the actual transaction value at the time of acquisition or transfer in the preliminary return of transfer margin or final return of transfer margin of assets, the transfer margin shall be calculated on the basis of the actual transfer and acquisition value; however, if no evidential documents are submitted even if there is no report or there is no actual transfer or acquisition value, or only one of the actual transfer or acquisition values is submitted, the transfer margin shall not be determined on the basis of the standard market value at the time of acquisition or transfer pursuant to the main sentence of Article 170(1) of the same Enforcement Decree.

B. In calculating the acquisition value and the transfer value in order to impose the transfer income tax, the amount obtained by deducting the acquisition value from the transfer value based on the standard market price in light of the substance over form principle under Article 14(2) of the Framework Act on National Taxes or Article 7(2) of the Income Tax Act, i.e., the scope of the value actually transferred, even in a case where all of them are calculated based on the standard market price.

(a)(b)Articles 23(4) and 45(1)1 of the former Income Tax Act (Act No. 3576, Dec. 21, 1982); Articles 170(1) and 170(4)3 of the former Enforcement Decree of the Income Tax Act (Presidential Decree No. 11578, Dec. 31, 1982); (b) Article 14(2) of the Framework Act on National Taxes; Article 7(2) of the Income Tax Act;

A. Supreme Court Decision 82Nu138 delivered on February 22, 1983; 83Nu106 delivered on February 14, 1984; 84Nu457 delivered on September 25, 1984; 84Nu468 delivered on October 23, 1984

[Judgment of the court below]

Director of the tax office

Seoul High Court Decision 86Gu807,1107 decided April 21, 1987

The part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the Seoul High Court.

We examine the grounds of appeal.

1. Examining the judgment below, the court below reasoned that the plaintiff transferred 16 parcels of land listed in the annexed Table 1 and 3 parcels of land listed in the annexed Table 2 to the non-party on February 1985, but did not gain profit from the transfer. The defendant determined the transfer value and acquisition value of such land based on the standard market price and calculated the transfer margin and the tax amount accordingly on the land listed in the annexed Table 1 as of September 16, 1985 and estimated the transfer margin and the tax amount to be KRW 4,402,410 for the land listed in the annexed Table 1 as of September 16, 1985. The court below determined the transfer margin and the acquisition value of the land listed in the annexed Table 2 as of December 19, 1985 and determined the transfer margin and the tax amount to be calculated based on the standard market price at least 11,721,240 won for the land listed in the annexed Table 1, and determined the transfer value to be calculated based on the standard market price at least 100 won.

2. According to Articles 23(4) and 45(1)1 of the Income Tax Act (Act No. 3576, Dec. 21, 1982) which was enforced at the time of the transfer of this case, the transfer value and acquisition value, which form the basis for calculating gains on transfer of assets, shall, in principle, be based on the standard time, and only exceptional cases as determined by the Presidential Decree, shall be based on the actual transaction value. Article 170(4)3 of the Enforcement Decree of the Income Tax Act (Presidential Decree No. 11578, Dec. 31, 1982) provides that "where the transferor can confirm the gains on transfer of assets and the actual transaction value at the time of acquisition by documentary evidence submitted pursuant to the provisions of Article 95(1) or 100(1) of the Act, where assets are transferred and the actual transaction value at the time of acquisition or the final return on transfer of assets is determined based on the actual transaction value or the actual transaction value at the time of transfer, even if there is no report or the actual transaction value at the transfer price at the 10.

However, according to the records, the period of the final return on the capital gains of this case is from May 1, 1986 to May 31 of the same year pursuant to Article 100 (1) of the Income Tax Act, and the disposition of this case was filed with the Commissioner of the National Tax Service through the defendant on September 16, 1985 and December 19 of the same year prior to the period of the final return, and the plaintiff filed a request for examination of the transfer value with the Commissioner of the National Tax Service through the defendant on November 15, 1985. However, it is clear by the plaintiff's oral argument that the documents on the actual acquisition value were submitted, and therefore, the transfer gains of this case cannot be calculated based on the standard market price at the time of acquisition and transfer.

Although the original adjudication on this point is somewhat ambiguous, there is no illegality in the imposition of this case based on the standard market price and the transfer value.

3. In a case where the calculation of the acquisition value and the transfer value in order to impose the transfer income tax is unclear and all of them are calculated based on the standard market price, the view of the party members is that the amount obtained by deducting the acquisition value from the transfer value based on the standard market price, i.e., the amount obtained by deducting the acquisition value from the transfer value based on the standard market price, i.e., the scope of the actual transfer value (see, e., Supreme Court Decision 84Nu468, Oct. 23, 1984; Supreme Court Decision 84Nu457, Sept. 25, 1984; Supreme Court Decision 83Nu613, Mar. 13, 1984; Supreme Court Decision 83Nu106, Feb. 14, 1984, etc.).

In the instant case, the Plaintiff asserted that the actual transfer value of the instant land is merely KRW 2,100,000,000. Therefore, the lower court should have deliberated and finalized each real transfer value and examined whether the transfer margin based on each of the above standard market values exceeds the above transfer value, but the lower court did not reach this conclusion, but did not err by misapprehending the legal doctrine and failing to exhaust all necessary deliberations. The arguments are with merit.

4. Therefore, the part of the judgment of the court below against the plaintiff shall be reversed, and the case shall be remanded to the Seoul High Court. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yoon Yoon-hee (Presiding Justice)