Busan High Court (Chowon) 2012Nu1368 ( October 10, 2013)

Whether a real estate trading act constitutes a taxable object of value-added tax and business income;

Since the Plaintiff’s act of selling and selling real estate is recognized to be conducted with continuity and repetition to the extent that it can be seen as part of the business activities aimed at profit, the Plaintiff’s income constitutes business income and the Plaintiff constitutes a business operator under the

Article 4 of the Income Tax Act (former Scope of Business under Article 1 of the Enforcement Rule of the Value-Added Tax Act)

2013Du24020 Revocation of the detailed global income, disposition, etc.

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1. Head of ○○ Tax Office;

Busan High Court (Chowon) Decision 2012Nu1368 Decided October 10, 2013

March 13, 2014

All appeals are dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the grounds of appeal Nos. 1 and 2

A. Whether the act of transferring real estate consists of real estate as part of "real estate sales business" or whether its income constitutes business income shall be determined according to the ordinary social norms, taking into account the transferor's acquisition and holding status of real estate, creation, size, frequency, mode, other party, etc. of the transfer, and the determination must take into account not only the transfer real estate but also all the circumstances before and after the transfer took place throughout the entire real estate owned by the transferor, as well as the overall real estate owned by the transferor. Article 1 (2) of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 12 of Apr. 22, 2008) is merely an exceptional provision that can be seen as real estate sales business, so long as the real estate transaction was made with continuity and repetition under the above provision's business purpose, such transaction does not constitute business feasibility, even if the transaction was conducted during the taxable period (see, e.g., Supreme Court Decision 2012Du160160, Feb. 28, 2013).

In light of the above legal principles and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to real estate sales business.

2. As to the third ground for appeal

In the reasoning of a written judgment, it is sufficient to indicate the judgment on the party’s allegations and other means of offence and defense to the extent that it can be recognized that the text is justifiable, and it is unnecessary to determine all of the parties’ allegations or methods of offence and defense (Article 8(2) of the Administrative Litigation Act and Article 208 of the Civil Procedure Act). Therefore, even if there is no specific and direct determination on the matters alleged by the party in the judgment of the court, if it is possible to find the assertion or the rejection of such assertion in light of the overall purport of the reasoning of the judgment even though the specific and direct determination on the matters alleged by the party in the judgment is not indicated, it cannot be deemed an omission of judgment. Even if it is obvious that the assertion is rejected even if it was not actually decided, it cannot be said that there was an error of omission of judgment since the conclusion of the judgment

Examining the reasoning of the lower judgment in light of the record, the lower court seems to have indirectly rejected the Plaintiff’s assertion that the instant transaction constitutes real estate sales business with continuity and repetition, by determining that the instant transaction constitutes a real estate sales business with a resident’s civil petition, and that the Plaintiff delayed business and inevitably sold real estate under financial circumstances, and thus, does not constitute a real estate supply business under the Korean Standard Industrial Classification Table. Even if the lower court’s determination was omitted, it would have clearly rejected the Plaintiff’s assertion in light of the record, and thus, it cannot be said that the omission of judgment by the lower court has influenced

3. Conclusion

Therefore, all appeals are 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 on the bench.