The case holding that in case where the land and the building on which factory mortgage is established and the machinery and equipment installed thereon are transferred to other persons after being awarded a blanket bid, even if any loss incurred by the transfer of the above machinery and equipment occurred, it does not constitute necessary expenses for the transfer of the above land and the

The case holding that even if the loss was incurred due to the transfer of the above machinery and equipment, it does not constitute necessary expenses for the transfer of the above land and the building, on the ground that the above machinery and equipment are relatively old and are entirely separate assets from the above land and the building because the price of the successful bid is higher than the land and the building, and thus, it cannot be seen as being attached to the land and the building because the above machinery and equipment are not less than the price of the land and the building.

Article 45 (1) of the Income Tax Act

[Defendant-Appellee] Plaintiff 1 and 4 others

Head of the Office of Government

Seoul High Court Decision 90Gu5285 delivered on January 18, 1991

The judgment below is reversed and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

According to the reasoning of the judgment below, the court below acknowledged that the plaintiff acquired the land and the building of this case owned by 124,930,810 won, 144,753,190 won, 144,753,190 won, and the machinery and equipment of this case installed in the above land and the building, which were established on October 13, 198, for which the factory mortgage was established on October 13, 1988, and transferred the above land and the building to 190,000 won to 15,000 won, and determined that "the plaintiff purchased the above land and the building of this case to 290,000,000 won, since it was known that the land and the building of this case were sold at auction for 15,000 won, 5,000 won, and 15,000 won, which was constructed on the above land and the building of this case should be disposed of within 15,000 won,7000 won.

However, according to the records, most of the machinery and appliances of this case are relatively old produced in 1987, and the bid price of this case is 144,753,190 won higher than the land and building of this case and cannot be deemed as annexed to the land and building of this case. Thus, there is no room to regard losses incurred by the transfer of the above machinery and appliances as necessary expenses due to the transfer of the land and building of this case under Article 45 (1) of the Income Tax Act. Furthermore, since losses incurred by the disposition of the above machinery and appliances of this case were destroyed or damaged by the fire of this case, and they are nothing more than losses inevitably incurred to increase the utility value of the land and building of this case, it shall not be deducted as necessary expenses in calculating gains on transfer of the above land and building of this case.

Therefore, in calculating gains on transfer from the transfer of the above land and the above land and the building, the judgment of the court below that recognized the necessary expenses is erroneous in the misunderstanding of legal principles under Article 45 (1) of the Income Tax Act, which affected the conclusion of the judgment, and the ground for appeal assigning

Therefore, the judgment of the court below is reversed by accepting the defendant's appeal, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Sang-won (Presiding Justice)