In case of failure to state the source of funds for property acquired from relatives, etc. and deemed donation;

The burden of proving the fact of donation, which is a requirement for the taxation of gift tax, is imposed on the tax authority, and even if the purchaser acquired the property from the related parties such as relatives, etc., if there is a certain occupation and income, considerable financial or business experience, it cannot be deemed that the property was donated immediately on the ground that the purchaser did not disclose the source

Article 29-2 of the Inheritance Tax Act

Supreme Court Decision 86Nu340 Delivered on July 22, 1986

[Defendant-Appellee] Plaintiff 1 et al., Counsel for defendant-appellee

Daejeon Head of the tax office

Seoul High Court Decision 87Gu782 delivered on March 14, 1988

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

With respect to No. 1:

According to the reasoning of the judgment below, the court below determined that the taxation of this case was unlawful because there is no evidence to acknowledge that the plaintiff received the gift of this case, and further, even if the taxation of this case is deemed to have been conducted in accordance with Article 34-2 (1) of the Inheritance Tax Act, according to the evidence, since the assessed value per share of this case was 2,077 won and it was transacted in 1,500 won more than 70 percent, it is clear that it does not constitute "in case where the property is transferred as consideration for remarkably low value" under the above Article. Thus, the court below did not necessarily determine that the taxation of this case was conducted in accordance with Article 34-2 (1) of the above Act.

Therefore, as pointed out in the judgment below, there is no error in the misapprehension of legal principles or the contradiction of reasons.

With respect to the second ground:

The burden of proving the fact of gift tax, which is a requirement for taxation of gift tax, shall be imposed on the tax authority, and even if the purchaser acquired the property from a person in a special relationship such as relatives, if there is a certain occupation and income, considerable financial history, or business experience, it cannot be deemed that the purchaser received the property immediately on the ground that the source of the fund necessary for acquiring the property is not clearly disclosed (see Supreme Court Decision 86Nu340, Jul. 22, 1989).

Therefore, the court below's decision that the taxation disposition of this case was unlawful on the ground that there was no evidence to recognize that the plaintiff was donated the stocks of this case, since it confirmed that the plaintiff had been operating a theater and real estate rental business for a long time since the time when the plaintiff purchased the stocks of this case, and that the real estate was disposed of as well as that there was a considerable amount of re-payment of 14,744,083 won in total as global income tax and capital gains tax from 1981 to 1983.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Sang-won (Presiding Justice)