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

The grounds of appeal are examined.

1. In light of the legislative intent of Article 97(1)2 of the former Income Tax Act (Amended by Act No. 14389, Dec. 20, 2016) and Article 163(3)2 of the former Enforcement Decree of the Income Tax Act (Amended by Presidential Decree No. 26067, Feb. 3, 2015; hereinafter the same), it should be interpreted that the litigation costs, reconciliation costs, etc. directly paid in connection with the increase of compensation for purchase by purchase or expropriation of land, etc. should be deducted from the transfer value as necessary expenses.

(See Supreme Court Decision 2016Du1059 Decided April 7, 2017). 2. Reviewing the reasoning of the lower judgment reveals the following facts.

When the instant land was incorporated into a “project for expansion of parking lots within a development-restricted zone” zone, which is a public works project, the Plaintiff entered into a contract for purchase with intent to sell the instant land in KRW 981,021,000 on May 8, 2008 (hereinafter “the instant contract for purchase”) and completed the procedure for ownership transfer registration accordingly, and reported and paid the transfer income tax corresponding to the said compensation for the year 2008.

B. On July 31, 2009, the Plaintiff, along with other land owners who responded to the consultation, had accepted compensation calculated based on the conditions before the development restriction zone was cancelled due to mistake at the time of the consultation, and filed a lawsuit against Sucheon-si seeking return of the original value around the head of Suwon District Court Nancheon-si (hereinafter “the instant lawsuit”). Accordingly, on February 16, 2012, it is impossible for the Plaintiff to return the original value as to the part of the instant land. As such, from the market price of the said land, the Plaintiff paid the remainder of KRW 1,531,323,00, which remains after deducting the amount corresponding to the said part of the compensation already paid to the Plaintiff, from the market price of the said land, the Plaintiff paid the Plaintiff KRW 1,531,323,000, the remainder of the compensation amount.