[1] Criteria for applying Article 170 (4) 2 (e) of the former Enforcement Decree of the Income Tax Act at the time of real estate transactions

[2] The method of calculating transfer margin in a case where there is no speculation under Article 170 (4) 2 of the former Enforcement Decree of the Income Tax Act

[1] According to Article 170 (4) 2 (e) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 194), in the case of acquiring or transferring real estate above a certain size, the above provision shall apply to the acquisition or transfer of real estate by unlawful means, such as the use of another person's name, the preparation of a false contract, and the false transfer of resident registration, or in the case of violation of the related Acts and subordinate statutes. Thus, in principle, in the case of the acquisition or transfer of real estate, if one transaction between the acquisition or transfer of real estate does not constitute the above type of transaction or one transaction before the enforcement of the above provision, the above provision shall apply

[2] In full view of the provisions of the main sentence and proviso of Article 170 (4) 2 of the former Enforcement Decree of the Income Tax Act, where it is deemed that the pertinent transaction does not have speculation as a normal economic act in light of the specific circumstances such as the acquisition circumstances, actual conditions of use, sales circumstances, holding period, etc. in the pertinent real estate transaction, the transfer margin shall be calculated based on

[1] Article 170 (4) 2 (e) of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 14467 of December 31, 1994), Article 23 of the Income Tax Act / [2] Article 170 (4) 2 of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 14467 of December 31, 1994), Article 23 of the Income Tax Act

[1] Supreme Court Decision 92Nu14984 delivered on May 11, 1993 (Gong1993Ha, 1740), Supreme Court Decision 92Nu10920 delivered on September 28, 1993, Supreme Court Decision 92Nu18467 delivered on June 28, 1994 (Gong1994Ha, 2140) / [2] Supreme Court Decision 92Nu619 delivered on July 14, 1992 (Gong192, 2449), Supreme Court Decision 92Nu1282 delivered on March 9, 193 (Gong193Sang, 1180), Supreme Court Decision 94Nu142 delivered on October 7, 1994 (Gong194130)

Plaintiff

Head of the tax office;

Seoul High Court Decision 93Gu34178 delivered on December 7, 1994

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

According to the reasoning of the judgment below, on June 10, 1976, the plaintiff acquired the land in this case under the name of the non-party on June 14, 1991, and transferred it to other person on June 16, 1993, the defendant was used under the name of the non-party on the ground that it falls under the type of speculative transaction under Article 170 (4) 2 (e) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994). The court below determined that the above provision was not applicable to the case where the plaintiff acquired the land in this case after the enforcement date of the above provision in light of the spirit of Article 170 (4) 2 (e) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994).

According to Article 170 (4) 2 (e) of the Enforcement Decree of the Income Tax Act, in the case of acquiring or transferring real estate above a certain size determined by the Commissioner of the National Tax Service, in principle, gains from transfer based on the actual transaction price should be calculated in the case of unlawful methods such as use in another person's name, preparation of a false contract, false transfer of resident registration, or in violation of related Acts and subordinate statutes (However, Article 11 (2) 1 of the Act on the Registration of Real Estate under Actual Titleholder's Name, which was promulgated on March 30, 1995 and enforced on July 1, 1995, has been directly transferred to the acquisitor within the grace period after the sale, purchase, or other disposal of real rights to the real estate, it shall not be deemed that it constitutes "use in another person's name" under the above provision, and thus, if one of the above transactions is not the type of transaction, or even if the above provision is not the type of transaction prior to the enforcement of the above provision, the pertinent provision shall apply.

The court below determined that the above provision cannot be applied to the acquisition of the land of this case on the ground that the above provision can only be applied to the case where the requirements for aggravation are met after its enforcement date, and it is legitimate pursuant to the precedents of party members (see, e.g., Supreme Court Decisions 92Nu14984, May 11, 1993; 92Nu18467, Jun. 28, 1994). However, when the plaintiff transfers the land of this case, he used another person's name, and this constitutes a type of transaction as provided in the above provision, and thus, it is still applicable to the calculation of gains on transfer of the land of this case. Thus, the court below determined that the above provision is not applicable to the acquisition of the land of this case

However, in full view of the provisions of the main text and proviso of Article 170 (4) 2 of the Enforcement Decree of the above Act, the transfer margin shall be calculated based on the standard market price, not the actual transaction price, if the transaction is deemed to have no speculation as a normal economic act, considering the detailed circumstances such as the acquisition process, actual use condition, sale circumstances, and possession period in the transaction of the pertinent real estate. (See, e.g., Supreme Court Decisions 92Nu619, Jul. 14, 1992; 92Nu1282, Mar. 9, 193). According to the records, although the plaintiff engaged in the transaction of this case in another person's name, he held the land of this case for 15 years, and even at the time of such transfer, he did not dispose of the land at a lower price than the market price and used it for the funds of a company at the time, and thus, the court below's determination of the standard market price of this case should not affect the conclusion of the judgment below.

There is no reason to discuss.

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 Ahn Yong-sik (Presiding Justice)