Incheon District Court 2009Gudan1478 (Law No. 19, 2010)

early 209 middle 1580 ( October 15, 2009)

It is recognized that farmland has been cultivated near the land of 1 year or longer and that farmland has been cultivated for more than 8 years.

Since it is recognized that a person resides in the vicinity of the first land without a special occupation and cultivated crops, the first land is subject to reduction or exemption for up to eight years, but the second land is not used as farmland and cannot be deemed as land annexed to a house, and thus the second land cannot be deemed as land annexed to a house. Therefore, the second land is legitimate to be

2010Nu3096 Revocation of Disposition of Imposing capital gains tax

XX Kim

O Head of tax office

Incheon District Court Decision 2009Gudan1478 Decided August 19, 2010

July 13, 2011

August 24, 2011

1. Of the judgment of the first instance court, the part against the plaintiff falling under the order to revoke below shall be revoked.

The Defendant’s disposition of imposition of capital gains tax of KRW 202,133,180 for the Plaintiff on February 4, 2009, exceeding KRW 184,189,090, shall be revoked.

2. The remaining appeal filed by the Plaintiff is dismissed.

3. Of the total litigation costs, 90% is borne by the Plaintiff, and the remainder is borne by the Defendant.

The judgment of the first instance shall be revoked. The disposition of imposition of capital gains tax of KRW 202,133,180 rendered by the Defendant to the Plaintiff on February 4, 2009 shall be revoked.

1. Details of disposition;

A. On August 16, 1986, the Plaintiff acquired 50 m2 from the Gyeonggi XX Si, XX 00-00 to 145 m2, and then acquired 330 m2,000 m2 from the Gangwon-do, etc. on May 31, 1999, instead of transferring 50 m2 from the said land in installments pursuant to the exchange contract, the Plaintiff acquired 330 m2,000 m2 and 330 m2,000 m2,000 m2 and 330 m2,000 m2 on July 12, 1999.

On April 22, 2008, the Plaintiff transferred to BB the share of 95/145 square meters (the share remaining after the transfer to BA, etc. under an exchange contract; hereinafter referred to as “the share remaining after the transfer; hereinafter referred to as “land 1”) of the same 00-00 square meters and the share of 363/10 of each 00-0 square meters of 330 square meters of 330 square meters of 145 square meters (the total share acquired under an exchange contract; hereinafter referred to as “second share”) in the same 00-00 square meters.

B. On May 31, 2008, the Plaintiff filed an application for reduction of or exemption from capital gains tax on the ground that the land Nos. 1 and 2 falls under farmland cultivated directly for not less than eight years pursuant to Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 9276, Dec. 29, 2008; hereinafter the same) upon reporting the capital gains tax.

On February 4, 2009, the Defendant: (a) denied direct cultivation to the Plaintiff; (b) excluded the reduction or exemption by denying direct cultivation; (c) with respect to the land 2, the Plaintiff did not directly cultivate; and (d) imposed property tax on the land subject to aggregate taxation pursuant to the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same shall apply); and (b) rendered the instant disposition imposing capital gains tax of KRW 202,13,180 for the year 208 (the tax amount reduced or exempted with respect to the land 1 is KRW 17,94,090) on the land subject to aggregate taxation, which does not fall under any item of Article 104-3(1)4 of the former Income Tax Act (amended by Act No. 9270, Dec. 26, 2008; hereinafter the same shall apply).

[Reasons for Recognition: Facts without dispute, entry of Eul-1 to 6 evidence, purport of the whole pleadings]

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) The Plaintiff had resided in a place close to the land of l and kept a farmer directly in the land of 1. Since the Plaintiff directly cultivated the land of 1 year or longer, capital gains tax shall be reduced or exempted pursuant to Article 69 of the former Restriction of Special Taxation Act.

2) The second land was cultivated directly after acquisition as land on the public register or as land actually in fact. The second land should be exempted from capital gains tax pursuant to Article 69 of the former Restriction of Special Taxation Act, and even if not, since the second land was cultivated directly by the Plaintiff, it does not fall under the “farmland that the owner does not reside in the location of the farmland or does not own own cultivation” under Article 104-3(1)1 (a) of the former Income Tax Act, and thus, it should not be excessive to the second land

Even in a case where the second land is not farmland, since the house was constructed on the second land and the land annexed to the house under Article 182 (1) of the former Local Tax Act, it cannot be deemed land for non-business use in the area calculated by multiplying the area to which the house is built under Article 104-3 (1) 5 of the former Income Tax Act by the rate prescribed by the Presidential Decree by region

B. Determination as to land No. 1

(4) In full view of the following facts: (i) the Plaintiff acquired land on August 16, 1986; (ii) 00-00 square meters of 40 square meters of 19.98 square meters of 19.98 square meters of 10 square meters of 19.1 square meters of 20 years of 20 years of 20 years of 20 years of 10 years of 20 years of 20 years of 20 years of 10 years of 20 years of 20 years of 20 years of 20 years of 20 years of 20 years of 20 years of 20 years of 20 years of 20 years of 20 years of 20 years of 30 years of 20 years of 20 years of 20 years of 20 years of 20 years of 20 years of 3 years of 20 years of 20 years of 20 years of 20 years of 3 years of 20 years of 20 years of 20 years of 20 years of 20.

Therefore, Article 69(1) of the former Restriction of Special Taxation Act applies to the land that the Plaintiff cultivated directly for not less than eight years and is subject to reduction or exemption under Article 69(1) of the same Act. Accordingly, the Defendant asserts to the effect that there is no sufficient data to disclose the purchase of seeds, agrochemicals, etc. necessary for cultivating crops. However, the Defendant’s assertion is without merit in light of the fact that the Plaintiff continued to reside in the surrounding area since the Plaintiff purchased the land on August 1, 1986 and did not have any special occupation since it had no reason to use the land as a garden, and that the PP market appears to have been actually used for farming, and that the photograph taken around May 207 (No. 16-1 of evidence No. 16) appears to have agricultural products.

The Defendant’s exclusion from the land subject to reduction and exemption is unlawful. Of the instant disposition, the part on land No. 1 from the disposition must be revoked.

C. Determination as to land No. 2

1) First, we examine whether the second land has been used as farmland (the requirements for reduction and exemption under Article 69(1) of the former Restriction of Special Taxation Act must be attested by the cultivator, and the fact that the owner does not reside in the location of farmland or constitutes "farmland not cultivated by himself/herself as prescribed by Presidential Decree" under Article 104-3(1)1(a) of the former Income Tax Act should be proved by the tax authority.

In full view of the statements and videos of Gap evidence Nos. 16, Eul evidence Nos. 2, 3, and Eul evidence Nos. 5 through 8, the land category was "large since the plaintiff acquired the land No. 2." Since the plaintiff acquired the land No. 2, the XX market classified the land No. 2 from 1999 to 2008 and imposed property tax on the land subject to general aggregate taxation by deeming that the land No. 2 is not subject to separate addition or separate taxation. The plaintiff did not raise any objection, and it is recognized that the photographs of the land No. 2 taken around May 2007 do not seem agricultural products.

Land No. 2, the category of which on the public register is "giant", has not been used as farmland. The plaintiff's assertion on the premise that land No. 2 is used as farmland is without merit

2) Next, we examine the argument that the part of the land corresponding to the land annexed to the second land is not against the non-business land.

Article 104-3 (1) 5 of the former Income Tax Act stipulates one of the non-business land as land exceeding the area calculated by multiplying the area on which a house is built among the land annexed to a house under Article 182 (2) of the former Local Tax Act by the ratio prescribed by the Presidential Decree for each region.

In full view of the purport of each statement in Gap evidence Nos. 6 and 7, there is no building constructed with the land No. 2 in the public record, such as the certified copy of the register as the location of the building. As seen earlier, the land No. 2 was excluded from the aggregate taxation or the aggregate taxation from 1999 to 2008, and was imposed as a general aggregate taxation, and the plaintiff did not raise an objection thereto. Therefore, barring any special circumstance, the plaintiff cannot be deemed to have constructed a house on the land

As to this, the Plaintiff alleged to the effect that part of the house owned by Park Do referred to in the same Ri 000-0 was built against the second land, but it is not sufficient to recognize the evidence to acknowledge the witness testimony of the first instance court, and there is no other evidence to acknowledge it.

Therefore, the Plaintiff’s assertion on the premise that a house is located on the land No. 2 is without merit (it cannot be deemed that the land No. 2 owned by the Plaintiff, other than the land owned by Park Doddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd

3) Of the instant disposition, the part concerning the land No. 2 is lawful.

3. Conclusion

Of the judgment of the court of first instance, the part against the plaintiff who rejected the reduction or exemption of the land 1 shall be revoked. The portion exceeding 184,189,090 won (=202,133,180 won - 17,94,090 won) of the disposition in this case shall be revoked.