[1] The purport of Article 7-2 (1) of the former Inheritance Tax Act and Article 3 (1) of the former Enforcement Decree of the Inheritance Tax Act

[2] Whether the purpose of Article 7-2(1) of the former Inheritance Tax Act is not objectively clear, in a case where, even if the cost of disposal of inherited property has been revealed that it was contributed to a third party, the relationship of the cause of such contribution is not specifically verified (affirmative)

[3] In a lawsuit seeking revocation of the imposition of inheritance tax, where the disposal cost of the inherited property included in the taxable value is clearly used, and the disposal cost is excluded from the taxable value, whether a reasonable tax amount shall be calculated by including the value of the property acquired as such in the tax base (affirmative)

[1] The purport of Article 7-2 (1) of the former Inheritance Tax Act (amended by Act No. 5193 of Dec. 30, 1996) and Article 3 (1) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 14082 of Dec. 31, 1993) is to prevent an ancestor from unfairly reducing inheritance tax by donating or succeeding the disposal price of inherited property to his heir in cash where it is not easy to capture the disposal price of inherited property, so that the tax authority proves that there is an amount which is objectively unclear among them, if the tax authority proves that there is an amount which is not objectively clear, the amount can be included in the taxable amount for inheritance even if the taxpayer does not prove the use price of the disposal price of inherited property. However, it is clear that requiring the taxpayer to disclose the purpose of the disposal price of inherited property even if the taxpayer does not prove the fact that the amount is inherited in cash. Thus, if the disposal price of inherited property is considerably limited to a certain scope, it is clear that all of the above provision is not included in the taxable amount.

[2] Even if the disposal cost of inherited property was revealed to have been deposited, delivered, or contributed to a third party, if the existence of an obligation against the third party or the cause relationship of the contribution to the property has not been specifically verified, it shall not be deemed that the purpose of the disposal is objectively obvious.

[3] In a lawsuit seeking revocation of a taxation disposition that contests the existence of legitimate tax amount on a taxable object, the determination of illegality of the taxation disposition shall be based on whether the tax base or tax amount recognized by the taxation disposition exceeds the actual tax base or legitimate tax amount on the taxable object, and the actual tax base or legitimate tax amount shall be calculated based on all arguments and data submitted until the closing of argument in the revocation lawsuit. In the case of a lawsuit seeking revocation of the taxation disposition of inheritance tax, even though the use of the cost of disposal of inherited property included in the taxable amount of inheritance tax is clearly excluded from the taxable amount of inheritance tax, if the value of the property acquired as the cost of the disposition is not included in the tax base for calculating the tax amount of the taxation disposition, the actual tax base or legitimate tax amount which forms the basis for determining illegality of the taxation disposition should be calculated based on

[1] Article 7-2 (1) of the former Inheritance Tax Act (amended by Act No. 5193, Dec. 30, 1996; see Article 15 (1) 1 of the current Inheritance Tax and Gift Tax Act); Article 3 (1) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 14082, Dec. 31, 1993; see Article 11 (2) of the current Inheritance Tax and Gift Tax Act) / [2] Article 7-2 (1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 5193, Dec. 30, 1996; see Article 15 (1) 1 of the current Inheritance Tax and Gift Tax Act); Article 3 (1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 14082, Dec. 31, 1993; see Article 19-13 (1) of the current Inheritance Tax and Gift Tax Act)

[1] Supreme Court Decision 95Nu4413 delivered on September 25, 1992 (Gong1992, 3037), Supreme Court Decision 95Nu23 delivered on June 13, 1995 (Gong1995Ha, 2423), Supreme Court Decision 95Nu13821 delivered on August 23, 1996 (Gong196Ha, 2905), Supreme Court Decision 98Du3075 delivered on December 8, 1998 (Gong199Sang, 159) / [2] Supreme Court Decision 92Nu10197 delivered on October 9, 192 (Gong1992, 3164), Supreme Court Decision 95Nu29799 delivered on November 29, 196 (Gong1995, 194), Supreme Court Decision 90Nu3975979 delivered on November 29, 1995)

Plaintiff (Appointed Party) 1 and 10 others (Attorney Ji-sung et al., Counsel for the plaintiff-appellant)

Head of the tax office;

Seoul High Court Decision 95Gu32930 delivered on January 13, 1998

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court. The Plaintiff (Appointed Party)’s appeal is dismissed.

1. The plaintiff's grounds of appeal are examined.

A. Ground of appeal Nos. 1 and 2

(1) Article 7-2 (1) of the former Inheritance Tax Act (amended by Act No. 5193, Dec. 30, 1996) provides that where an ancestor disposes of inherited property within two years prior to the commencement date of inheritance, the amount shall be calculated by calculating the amount by kind of property and at least 100 million won, and the use thereof shall be included in the taxable amount of inheritance tax if the Presidential Decree prescribes that it shall be objectively unclear. Article 3 (1) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 14082, Dec. 31, 1993) provides that where the transaction partner who received money, etc. by the ancestor after disposing of the property has not been verified due to lack of transaction evidence, or where other assets acquired by the above money, etc. are not verified (paragraphs 1 and 4).

The purport of the above provisions of the Inheritance Tax Act is that, in cases where the tax authorities prove that there is an amount objectively unclear among them in order to prevent the tax authorities from unfairly reducing inheritance taxes by donation or inheritance to the heir in cash, for which it is not easy to capture the disposal price of inherited property, the amount may be included in the taxable amount of inheritance taxes even if the taxpayer does not prove the use of the disposal price in cash (see Supreme Court Decision 95Nu23, Jun. 13, 1995). However, it is clear in light of the language and text of the above provision or the purport of the provision, that if the disposal price of inherited property is 10 million won or more, the portion not proven its use is included in the taxable amount of inheritance taxes if the taxpayer proves that the disposal price of inherited property is 10 million won or more (see Supreme Court Decision 95Nu2413, Sept. 25, 1992).

In addition, even if the disposal price of inherited property has been determined to have been deposited, delivered, or contributed to a third party, if the existence of an obligation against a third party or the relationship between the cause of the contribution to property has not been specifically verified, it cannot be said that the purpose of the disposal is objectively obvious (see, e.g., Supreme Court Decisions 92Nu10197, Oct. 9, 1992; 95Nu15285, Nov. 29, 196).

(2) The court below held that the amount of money deposited in another account or used as a check among the withdrawals of the deceased's deposit in the attached Table (2) of the judgment of the court below is objectively unclear on the ground that the use of the withdrawals of deposit is not objectively proven on the grounds that there is no evidence of the obligation to borrow money from the deceased's other account (the appointed party 1) or of the causal relation with the property contribution or the receipt of check, and that each amount of the withdrawals of deposit cannot be excluded from the taxable amount of inheritance taxes on the grounds that there is no objective proof on the grounds as stated in the judgment of the court below. In light of the records, it is justified in the judgment of the court below that there is no proof on the existence of the deceased's obligation to borrow money to the plaintiff 1 (the appointed party 1), and it is not necessary to urge the party to prove all the facts disputed between the parties. Thus, the court below's judgment of the court below is not erroneous in the misapprehension of legal principles as to the allocation of burden of proof in the application of the above Inheritance Tax Act as pointed out in the ground of appeal.

The arguments in the grounds of appeal Nos. 1 and 2 as to above points are all unacceptable.

B. Ground of appeal No. 3

In light of relevant evidence and records, the court below is justified in finding that the shares of this case were owned by the deceased at the time of the commencement of the inheritance of this case, and there is no error in the misapprehension of legal principles as to the burden of proof, mistake of facts and incomplete deliberation due to violation of the rules of evidence, as otherwise alleged in the ground of appeal. The ground of appeal as to this issue cannot be accepted.

2. The defendant's grounds of appeal are examined.

In a lawsuit seeking revocation of a taxation disposition disputing the existence of a legitimate tax amount on a taxable object, the determination of illegality of the taxation disposition shall be based on whether the tax base or tax amount recognized by the taxation disposition exceeds the actual tax base or due tax amount on the taxable object, and the actual tax base or due tax amount shall be calculated based on all allegations and data submitted not later than the closing of argument in the lawsuit seeking revocation of the taxation disposition. Thus, even where the use of the cost of disposal of the inherited property included in the taxable amount of inheritance tax in the litigation seeking revocation of the taxation disposition is obvious and the cost of the disposal is excluded from the taxable amount of inheritance tax, if the value of the property acquired as the cost of the disposal is not included in the tax base for the calculation of the tax amount of the taxation disposition, the actual tax base or due tax amount, which serves as the basis for the determination of illegality of the taxation disposition, shall be calculated based on all inherited property including the omitted inherited property (see Supreme Court Decision 9

Nevertheless, the court below rejected the defendant's assertion that, in calculating the amount of legitimate tax payable by the plaintiffs, the use of the deposited money, which is the amount of disposal of inherited property included in the taxable amount of inheritance taxes, should be excluded from the taxable amount of inheritance taxes, and as such, the amount of the property acquired in the consideration of the disposal was omitted from the inherited property in calculating the tax base of the inheritance tax of this case, the reasonable tax amount should be calculated including the value of the inherited property in the value of the inherited property. In order to include the value of the property acquired in the value of the inherited property in the value of the inherited property, the court below did not examine whether the property acquired in the consideration of the disposal should be included in the value of the inherited property, but did not examine the existence of the omitted inherited property. It erred in the misapprehension of legal principles as to the object and scope of the judgment in the revocation lawsuit of tax

3. Therefore, the part of the judgment of the court below against the defendant is reversed, and that part of the case is remanded to the court below for a new trial and determination, and the appeal by the plaintiff (Appointed Party) is dismissed. It is so decided as per Disposition with the assent of all participating judges.

Justices Cho Cho-Un (Presiding Justice)