Plaintiff 1 and 3 others (Law Firm Jeong, Attorneys Song Jong-sung et al., Counsel for plaintiff-appellant)

Head of Sungnam Tax Office et al.

May 18, 2010

1. All of the plaintiffs' claims are dismissed.

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

The imposition of KRW 168,811,280 of the gift tax imposed on Plaintiff 1 on December 15, 2008 and the imposition of KRW 98,977,730 of the gift tax imposed on Plaintiff 2 by the head of Sungnam Tax Office, the imposition of KRW 172,676,960 of the gift tax imposed on Plaintiff 4 on December 12, 2008 by the head of Yongnam Tax Office, and the imposition of KRW 276,453,820 of the gift tax imposed on Plaintiff 3 on December 6, 2008 is revoked.

1. Details of the disposition;

A. On October 4, 2004, the plaintiff 1 acquired 93,600 shares of the non-party 1's company from the non-party 4 (Occination), the non-party 5 (Occination), and the non-party 6 (Occination) (hereinafter "non-party 1 company"); the plaintiff 2 obtained 10,80 shares of the non-party 1 company from the non-party 5 (Occination part); the plaintiff 3 did not report 10,80 shares of the non-party 1 company from the non-party 6 (Occin part); the plaintiff 4 acquired 93,60 shares of the non-party 1 company from the non-party 6 (Occin part) and the non-party 7 (Occin part); and the plaintiff 3 did not report 17,700 shares of the non-party 2 (Occinal part) to the non-party 1 company and the gift transaction in this case (hereinafter "the gift transaction in this case").

B. The director of the Seoul Regional Tax Office: (a) deemed the result of the survey of stock transfer with respect to Nonparty 1 on October 2008; (b) calculated the gift tax amount per share of Nonparty 1 as KRW 14,495 in accordance with the supplementary method of assessment in accordance with Article 63(1)1 (c) of the Act and Article 5 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 8828, Dec. 31, 2007; hereinafter “Act”); and (c) calculated the gift tax amount per share of this case by the method of calculating the difference between the amount of the above sale and the sales value per share of this case and the sales value per share of Nonparty 1 in accordance with Articles 26 and 19(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 18989, Aug. 5, 2005; hereinafter “Enforcement Decree of the Act”).

C. The Defendants issued the instant disposition imposing gift tax on the Plaintiffs as stated in each of the claims, and the details of the disposition are as follows.

본문내 포함된 표 처분청 수증자 증여자(관계) 거래수량(주) 과세가액(원) 결정세액(원) 처분사유 성남세무서장 원고 1 소외 4(오빠) 72,000 491,640,000 142,572,950 저가양도 소외 5(제부) 18,000 119,637,000 22,372,670 저가양도 소외 6(시숙) 3,600 23,927,400 3,865,660 저가양도 [소계] 93,600 635,204,400 168,811,280 ？ 원고 2 소외 5(이모부) 54,000 358,911,000 98,977,730 저가양도 용인세무서장 원고 3 소외 2(처) 72,000 1,043,640,000 265,579,010 증여 소외 6(백부) 10,800 71,782,200 10,874,810 저가양도 [소계] 82,800 1,115,422,200 276,453,820 ？ 용산세무서장 원고 4 소외 6(백부) 21,600 143,564,400 30,104,010 저가양도 소외 7(고모부) 72,000 491,640,000 142,572,950 저가양도 [소계] 93,600 635,204,400 172,676,960 ？

[Reasons for Recognition: Facts without dispute, entry in Eul-1 to 8-1, purport of the whole pleadings]

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

(1) Although the non-party company 1 continued to have suffered losses after its establishment, it was impossible to conduct the first purpose business as part of the real estate located in Suwon-dong, which was purchased by the non-party 1 in order to construct a house was incorporated into a road site, and the non-party 1 was unable to conduct the business for the first time. Accordingly, the transfer margin was obtained from inventory assets as tangible assets after classifying it as an asset. Therefore, the above transfer margin is a disposal profit of tangible assets. As of the transaction date of this case, the above transfer margin is deemed as a disposal profit of tangible assets. As of the transaction date of this case, the weighted average amount of the profit and loss on disposal of securities and tangible assets and special profit and loss in the last three years exceeds 175% of the weighted average amount of the profit and loss before deducting corporate tax for the last three years and exceeds 50%. This constitutes "the case where it is unreasonable to calculate the net amount of profit and loss for the last three years according to the value of Article 56 subparagraph 1 of the Enforcement Decree of the Act [Article 2013 of the Inheritance Tax Act].

Therefore, the assessment value per share of the non-party 1 company should be calculated on the basis of the average value of presumed profit per share (hereinafter “the average value of presumed profit per share”) calculated pursuant to Article 56(1)2 of the Enforcement Decree of the Act. However, the defendant calculated the average amount of net profit and loss per share for the last three years (hereinafter “the average amount of net profit and loss per share”) calculated by the formula under Article 56(1)1 of the Enforcement Decree of the Act based on “the average amount of net profit and loss per share for the last three years” (hereinafter “the average amount of value per share”).

Belgium The defendant asserts that the value per share shall not be calculated on the basis of the value per share unless the report is filed within the deadline for filing a gift tax base return, but it is unlawful to calculate the value per share on the basis of the value per share unless the grounds falling under any of subparagraphs of Article 17-3(1) of the Enforcement Rule of the Act are acknowledged.

Article 63(1)1 of the Act is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) The purpose of Nonparty 1 is to “business related to the sale and purchase of real estate, lease, development, management brokerage, and use and profit-making of facilities for real estate,” “housing construction business, and housing site preparation business,”

B. On July 1, 1999, the non-party 1 purchased a total of 3,536 square meters (hereinafter “the project site for the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site of the building site

Non-party 1 sold 3,365,00,000 won to the Copia Copia Co., Ltd. the remaining land (hereinafter “instant land”) except for the portion incorporated into road sites among the project sites in North Korea on April 1, 2003.

Applicant From December 31, 1998 to December 31, 2003, the main contents of the balance sheet and income statement of Nonparty 1 are as follows:

Balance sheet

(unit: source)

본문내 포함된 표 과목 1998. 12. 31. 1999. 12. 31. 2000. 12. 31. 2001. 12. 31. 2002. 12. 31. 2003. 12. 31. 자산 ？ ？ ？ ？ ？ ？ Ⅰ.유동자산 989,000,268 1,321,839,589 1,249,189,504 1,359,888,672 1,232,651,268 2,010,053,418 ⑵재고자산 0 916,207,460 916,207,460 916,207,460 1,201,777,460 0 건설용지 0 912,249,920 912,249,920 912,249,920 662,419,920 0 Ⅱ.고정자산 33,102,640 86,611,874 128,209,119 35,182,256 948,966,877 922,408,330 ⑵유형자산 1,778,640 976,474 107,709,119 14,682,256 868,416,147 881,737,600 토지 - - 42,445,655 0 802,000,000 802,000,000

Income Statement

(unit: source)

본문내 포함된 표 과목 1998.1.1.~1998.12.31. 1999.1.1.~1999.12.31. 2000.1.1.~2000.12.31. 2001.1.1.~2001.12.31. 2002.1.1.~2002.12.31. 2003.1.1.~2003.12.31. Ⅰ.매출액 24,219,794 0 0 0 51,000,000 523,000,000 완성건물매출액 ？ ？ ？ ？ 51,000,000 523,000,000 Ⅲ.매출총이익 24,219,794 0 0 0 0 -12,400,000 Ⅵ.영업외수익 128,545,842 348,873,417 6,426,567 9,891,245 25,676,764 2,732,453,316 이자수익 128,408,862 348,665,198 5,939,061 9,741,154 25,542,690 33,223,886 잡이익 136,980 208,219 487,506 150,091 134,074 132,599 고정자산 처분이익 - - - - 0 2,699,096,831 Ⅷ.경상이익 91,542,029 -77,102,331 -195,514,468 -146,437,781 -222,393,429 1,734,831,467 Ⅸ.특별이익 0 552,463 0 3,618,000 0 0 전기오류 수정이익 0 552,463 0 3,618,000 0 0 ⅩⅢ.당기순손실 -91,542,029 89,481,406 195,514,468 142,819,781 222,393,429 -1,734,831,467

[Ground for Recognition: Facts without dispute, Gap evidence 3-1 to 3, Gap evidence 4-1 to 4-2, Gap evidence 5-1 to 4, Gap evidence 7-1 to 7, Eul evidence 5-2, and the purport of the whole pleadings]

D. Determination

(1) As of the transaction date of this case, Nonparty 1’s assertion that the net profit and loss amount of Nonparty 1’s 2003 business year is to be increased normally due to a temporary and rapid event is “the case where the amount of net profit and loss is increased normally” as stipulated in the latter part of Article 56(1) of the Enforcement Decree of the Act is to be calculated based on the value of subparagraph 2 of the same Article. Therefore, it is premised on the premise that the profit from the transfer of this case’s land constitutes a tangible asset disposal profit, not a inventory asset, rather than a tangible asset. Therefore, first of all, whether the transfer of this case’s land constitutes a disposal act of tangible assets can be seen as falling under

In full view of the contents of the corporate accounting standards as follows and the following circumstances revealed from the fact of recognition, it is reasonable to view that the land in this case constitutes an inventory asset, not a tangible asset of Nonparty 1.

㈎ 기업회계기준상 재고자산은 기업의 정상적인 영업과정에서 판매를 목적으로 구입하여 보유하고 있는 상품(부동산매매업에 있어서 판매를 목적으로 소유하는 토지, 건물 등도 이에 포함이 된다), 생산 또는 서비스 제공과정에 투입될 원재료나 소모품의 형태로 존재하는 자산(내용연수가 1년 미만인 예비부품 등) 등으로 분류된다. 또한 기업회계기준상 유형자산은 재화의 생산, 용역의 제공, 타인에 대한 임대 또는 자체적으로 사용할 목적으로 보유하는 물리적 형체가 있는 자산으로서, 한 회계기간을 초과하여 사용할 것이 예상되고, 여러 회계기간에 걸쳐 그로부터 발생하는 효익이 기업에 유입될 가능성이 높은 자산으로 정의된다.

㈏ 입북동 사업부지는 주택건설사업의 과정에서 판매할 목적으로 취득한 것이므로, 기업회계기준상 재고자산에 해당한다. 그러던 중 2002. 5. 14. 입북동 사업부지 일부가 수원시의 도로로 편입되면서 이 사건 토지만으로는 소외 1 회사가 당초 목적했던 주택건설사업을 시행할 수 없게 되었지만, 소외 1 회사가 이 사건 토지를 판매하지 아니하고 한 회계 연도 이상 보유하면서 자신의 사무실이나 공장부지로 사용하는 등 스스로의 영업활동에 사용하기로 한 것이 아닌 이상, 당초 예정한 사업내용에 따라 처분할 수 없게 되었다는 사정만으로 바로 이 사건 토지가 유형자산으로 재분류된다고 할 수는 없다.

㈐ 소외 1 회사가 입북동 사업부지를 당초 계획대로 주택건설업을 통해 처분하지 못하게 된 것은 소외 1 회사가 의도하지 않은 사정변경으로 인한 것이다. 그러나 소외 1 회사의 여러 사업목적 중에는 부동산매매업도 포함되어 있는 점에 비추어 보면, 이후 이 사건 토지를 주식회사 코퍼스트에게 매도한 부동산 매매행위까지도 소외 1 회사의 정상적인 영업활동이 아닌 일시우발적 사건에 해당한다고 할 것은 아니며, 오히려 재고자산으로 보유하고 있던 이 사건 토지를 매도하여 얻은 양도차익은 소외 1 회사가 부동산매매업의 정상적인 운영 과정에서 얻게 된 이익이라고 봄이 상당하다.

㈑ 앞서 본 소외 1 회사의 대차대조표에 의하면, 이 사건 토지는 1999년에 소외 1 회사 대차대조표상 Ⅰ.유동자산, ⑵재고자산 중 건설용지로 분류되어 기재된 이래, 2002. 5. 14.로부터 7개월 이상 지난 2002. 12. 31.까지도 계정재분류가 이루어지지 않은 상태인 것으로 보이며, 달리 원고들이 주장하는 바와 같이 소외 1 회사가 2002. 5. 14. 이후 이 사건 토지를 재고자산에서 유형자산으로 계정재분류했음을 인정할 만한 자료는 없다.

Article 56(1) main text of Article 56(1) of the Enforcement Decree of the Act and Article 17-3(1)6 of the Enforcement Decree of the Act, which stipulates that the weighted average amount of net profit and loss for the last three years per share, which is the basis for calculating the amount of deemed donation, shall not fall under any of the causes under the latter part of Article 56(1) of the Enforcement Decree of the Act and Article 17-3(1)6 of the Enforcement Decree of the Act, and thus, the plaintiffs' assertion is without merit without need to further examine, and the disposition of this case is legitimate.

3. Conclusion

The plaintiffs' claims are dismissed in entirety because they are without merit.

[Attachment Form 5]

Judges Lee Jin-man (Presiding Judge)