Appropriateness of the assertion that there is no actual transfer margin due to a mistake in calculating the acquisition value.

Since the actual acquisition price is confirmed through confirmation of the person concerned, a disposition that is imposed by mistake of actual acquisition price is illegal.

Article 96 of the Income Tax Act

Article 97 (Calculation of Necessary Expenses of Capital Gains)

1. The Defendant’s imposition disposition of KRW 27,090,190 against the Plaintiff on February 7, 2007 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On June 20, 2004, the Plaintiff: (a) purchased 1825 square meters prior to the ○○○○○○○○○○○○, ○○○○○, ○○○-○○○○○, ○○○○, on behalf of ○○○ on behalf of ○○○ on June 20, 204 (hereinafter “instant land before division”); (b) sold 867 square meters prior to the ○○○○, 627 square meters prior to the ○○○, 627 square meters prior to the ○○○○, 75 square meters prior to the ○○-○○, 00, and 256 square meters prior to the ○○-○○○, 204, on August 24, 2004, the Plaintiff sold the instant land to ○○, a person who was a title trust, and sold it to ○○,508,508 square meters.

B. As a result of the investigation on the above transaction, the Defendant deemed that the sale price of the land of this case prior to the division was 1.60 million won in total, each of which is 2.9 million won in total, and then converted 131,080,000 won in the area of the land of this case into the acquisition price of the land of this case, and calculated gains on transfer with the difference between this and the sale price of this case ○, etc., and imposed capital gains on the Plaintiff in February 7, 2007, which is 27,090,190 won in total.

C. On March 29, 2007, the Plaintiff appealed to the National Tax Tribunal, but was dismissed on November 8, 2007.

[Recognition] Facts without dispute, Gap evidence 1, Eul evidence 2-1, Gap evidence 9-1 to 3, Gap evidence 10, Eul evidence 1, Eul evidence 7, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff acquired approximately KRW 233,200,000 per square year the instant land prior to subdivision, and the acquisition value was less than the transfer value when converting it into the area of the instant land, and thus, there was no transfer margin. Therefore, the Defendant’s disposition of this case was unlawful on the premise that the transfer difference occurred due to the mistake of the actual acquisition value.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) In full view of the overall purport of the pleadings, the following facts can be acknowledged in the testimony of Gap evidence Nos. 4-8, Gap evidence Nos. 11 and 12 (including each number, if any) and each testimony of the witness Kim○ and Kim○○, and the whole purport of the pleadings. The descriptions of Eul evidence Nos. 3-5 and Eul evidence Nos. 11-5 are insufficient.

(A) Around June 2004, Kim○-○ originally sold 160,000,000 won as the first buyer residing in Seoul by O○○’s brokerage and received 30,000,000 won as the down payment on behalf of his father Kim○-○.

(B) Since the Plaintiff’s nearby ○○○○○○○○○○○○○○○○○○○○○○○, a land of this case before subdivision was essential to secure the access road. Therefore, on June 20, 2004, the Plaintiff purchased the land of this case before subdivision from Kim○○, who represented by Kim○○○ on behalf of Kim○○, for KRW 233,200,000, and paid KRW 70,000 as the down payment. Kim○○ cancelled the first sales contract and paid KRW 60,000,000 as the down payment to the first buyer via O○○○.

(C) On July 19, 2004, the Plaintiff paid the remainder of KRW 163,200,000 to Kim○○, and divided the instant land into four parcels as above on August 6, 2004, and then left 75 square meters prior to the said ○○○○-○○○○, as a site for access to the said Madem’s land, and sold the remaining three parcels, including the instant land, to another place.

(2) According to the above, the sales price of the instant land prior to subdivision is KRW 23,200,000, and the acquisition price of the instant land is KRW 191,224,000 if divided in proportion to the area of the instant land according to its size (=23,200,000 wonx1494/1825) and does not exceed KRW 180,80,000,000, the transfer price of the instant land is less than KRW 180,80,000, and

(3) The instant disposition imposing capital gains tax on the transfer margin by deeming the purchase price of the instant land as KRW 131,080,000 is unlawful.

3. Conclusion

The plaintiff's claim shall be accepted with due reason.

Relevant statutes

/ Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005)

Article 94 (Scope of Transfer Income)

(1) The transfer income shall be the following incomes generated in the current year:

1. Income accruing from transfer of land (referring to a lot of land subject to registration of land category in the cadastral record under the Cadastral Act) or buildings (including the facilities and structures annexed to such buildings);

Article 96 (Transfer Price)

(1) The transfer value of assets referred to in Article 94 (1) 1 and 2 shall be the standard market value at the time of transfer of the assets concerned: Provided, That where the assets fall under any of the following subparagraphs, the actual transaction value between the transferor and transferee (hereinafter referred to as “actual transaction value”) shall apply:

4. In the case of the real estate within one year after its acquisition;

5. Where real estate is acquired or transferred by illegal means, such as preparation of a false contract or a false transfer of resident registration, which meets the standards as prescribed by the Presidential Decree;

Article 97 (Calculation of Necessary Expenses in Transfer Income)

(1) In the calculation of gains on transfer of a resident, the necessary expenses to be deducted from the transfer value shall be as follows:

1. Acquisition value:

(a) In case of assets as prescribed in Article 94 (1) 1 and 2, the standard market price at the time the assets are acquired: Provided, That in case where the assets concerned fall under any of subparagraphs of Article 96 (1), it shall be based on the actual transaction price which is litigation for the acquisition of such assets;

(1) The Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19254 of Dec. 31, 2005)

Article 162-2 (Transfer Price)

(2) The case where the transfer value of assets is based on the actual transaction value under Article 96 (1) 5 of the Act shall be the case falling under any of the following subparagraphs, where real estate is acquired or transferred by unlawful means, such as preparation of a false contract or a false transfer of resident registration

1. Where real estate has been traded in violation of the Act on the Registration of Real Estate under Actual Titleholder's Name;

2. Where a broker under the Real Estate Brokerage Act transfers the real estate directly acquired in violation of the same Act;

3. Where a real estate has been acquired under a minor’s title (excluding the acquisition by an inheritance or donation), and transferred thereafter;

4. Where a member of a household has transferred or acquired a real estate three times or more within a year retroactive from the date of transfer, and where the total sum of actual transaction values is 300 million won or more; and

5. Where the transfer margin based on the standard market price by trade unit is not less than 100 million won: Finally.