If it is impossible to recognize or confirm the actual transaction price at the time of acquisition, it can be determined by estimation by the conversion price.

If it is impossible to recognize or confirm the actual transaction price at the time of acquisition only with the sales contract submitted by the Plaintiff, it may be determined by estimating the conversion price.

Article 114 of the Value-Added Tax Act: Determination and correction of tax base and amount of transfer income.

Suwon District Court 2016Gudan8122 Revocation of Disposition of Imposing Capital Gains Tax

AA

00. Head of tax office

on October 15, 2017

on October 31, 2017

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 52,435,830 for the Plaintiff on November 13, 2015 shall be revoked.

1. Details of the disposition;

A. On April 28, 2004, the Plaintiff and LL have completed the registration of transfer of shares in the name of LL with respect to the Plaintiff’s share of 2,274 of the above land (hereinafter referred to as “non-point land”), and the share of 200/2,474 of 2,474 of 2,474 of the above land (hereinafter referred to as “the entire land of this case”) after jointly purchasing non-party* 00/30 from 00/30,000 from 0/30,000.

B. On June 22, 2005, the Plaintiff purchased the pertinent land from Nonparty LL and completed a share transfer registration, and on January 22, 2014, transferred the entire land of this case to 00 industry, and reported the transfer income tax as indicated in the column of “report” on March 31, 2015, as indicated below. The Plaintiff purchased the pertinent land from Nonparty LL at the time, at KRW 150,000,000, the acquisition value was reported as the actual transaction value.

Classification

Reporting

Correction

Key Land

Issues Land

Key Land

Issues Land

Transfer Value

873,164,527

76,795,473

873,164,527

76,795,473

Acquisition Value

414,417,410

150,647,120

414,417,410

38,672,660

Transfer Income Tax

75,897,534

127,328,368

C. However, the director of the Central Regional Tax Office notified the result of the audit to the effect that the acquisition price of the land in question cannot be confirmed at the time of acquisition as a result of a comprehensive audit conducted against the Defendant. Accordingly, the Defendant determined the acquisition price of the land in question as stated in the pertinent table as KRW 38,672,660, which is the conversion price, as stated in the pertinent table, and notified the Plaintiff of KRW 52,435,830, which is calculated by deducting the voluntarily paid tax amount from the total determined tax amount in November 13, 2015 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on February 15, 2016, but was dismissed on April 21, 2016.

[Reasons for Recognition] Each entry in Gap 1, 2, and Eul 1 (including a branch number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although the key land of this case is not smaller than approximately 60 square meters (200 square meters), it was purchased with 150,000,000 won as requested by LLL due to the government’s development plan for the Sinan District and the location most adjacent to the public service. The Plaintiff prepared a certification of 200,000 won or more from this% to raise the above purchase fund in the form of investment. Although ten years have passed since the date of the transaction, the Defendant did not believe the details of the Plaintiff’s report on the transfer income tax and determined the acquisition price of the key land as the conversion price of the purchase price of the key land on the ground that there was no evidence supporting the financial transaction of the said transaction price, even if the check is not presented

B. Relevant statutes

Attached Form is as shown in the attached Form.

C. Determination

1) Comprehensively taking account of the relevant provisions, such as Article 114(7) of the Income Tax Act and Article 176-2(1) through (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 26067, Feb. 3, 2015; hereinafter “Enforcement Decree”), where the transfer value is based on the actual transaction value, and there is no evidentiary document such as a sales contract or any other material part is insufficient or false, or where the tax authority has no other way to indicate the actual transfer value, if the transfer value is not available, the transfer value shall be determined based on the estimated investigation by applying the order of transaction example value, appraised value, conversion value, and standard market value as prescribed by Article 176-2(3) of the Enforcement Decree.

or rectification (see, e.g., Supreme Court Decision 97Nu10192, Oct. 24, 1997).

2) We examine the instant case in light of the aforementioned legal principles. In full view of the aforementioned evidence, the following facts and circumstances acknowledged by the respective descriptions and images of B-2 through 4, witness witness witness witness witness witness witness witness witness testimony and the entire purport of pleading are as follows, even though the Plaintiff submitted a sales contract and receipt, etc. with respect to the acquisition price of the pertinent land, it cannot be said that the Plaintiff did not have any credibility in the contents of the sales contract and the above sales contract and the receipt, etc., but the Defendant did not have any other way to disclose the actual transfer value, and thus, did not err in the disposition of the instant case

According to the Plaintiff’s initial report of capital gains tax, the acquisition value (150,647,120 won) with respect to the land at issue is more than KRW 76,795,473 won, compared to the transfer value (76,795,473 won). This is very exceptional in light of the location and size of the land at issue, the interval between the time of acquisition and the time of transfer, and the details of changes in the officially announced land

The sales contract for the land at issue submitted by the Plaintiff was written without a broker, even though the mark "mediation" is written in the form of a contract, and it is not a certificate of approval affixed by the head of the Si/Gun, etc., and the seller's seal is affixed to the balance column, not a down payment column, which is ordinarily accepted at the time of the preparation of the contract (LL is affixed and sealed on the side of the balance column, but a receipt is written at the request of the Plaintiff as to the reasons for preparing a new receipt for the remainder (LL is the same as preparing a receipt for the reasons for preparing a new receipt, and it is not general that it is to obtain a seal again in the form of receipt at the time of receipt of the balance, but it is difficult to easily obtain a separate receipt other than the seal, in light of ordinary transaction practices, etc.).

The receipt (A 5-2) that ○ LL received and drafted an outstanding amount of KRW 90,000,000 from the Plaintiff on June 16, 2005 with respect to the said contract, does not indicate that it is a monetary amount related to the disputed land, nor does the other party to the delivery provide any financial evidence as to the source or payment of the amount, and there is no financial evidence.

Even in the case of a certificate (A) submitted by the Plaintiff to clarify the source of the purchase fund of the land at issue, there is no evidence to ascertain whether the Plaintiff actually received the investment fund from the Plaintiff, etc., and whether the investment fund was used as the acquisition price of the land at issue. Even if such investment is true, it is insufficient to prove that the acquisition price of the land at issue is 150,000,000 won because it does not coincide with the actual transaction price asserted by the Plaintiff.

While the LL seller was present as a witness, the seller did not properly explain the meaning of "to purchase the adjoining road (S. 83-25, N. 83-25, N. 8, N. 83-25, N. 8, N. 83-25)" as the special terms and conditions in the sales contract (S. 5-1) even though he was a party to a sales contract, he did not properly explain the meaning of "to purchase the adjoining road (S. 83-25, N. 8, N. 83-25, N. 8, N. 88, N. 4, E. 8, E. 8, E.S.)". While he/she testified that part of the whole land of this case was specified at the time, he/she was near the seaside (S. 4, the left side of the marked part of E. 4) to answer the question of the Plaintiff's agent's testimony and credibility of the contract or receipt that he/she prepared.

○ LL did not report the transfer income tax regarding the transfer of the instant land at the time. According to the Plaintiff’s report, LL testified to the purport that “LL was sold KRW 150 million to the Plaintiff after approximately one year after purchasing the instant land at approximately KRW 40 million, but LL was paid to the Plaintiff at KRW 150 million at the time of “the amount of tax at the time” and that “L was paid to the Plaintiff.” If the testimony of LL is suitable, there was a high possibility that the acquisition value and the transfer value of the instant land would not be significantly different.

In the meantime, although the officially assessed value of the pertinent land was 41,90 won at the time of acquisition at 21,100 won at the time of transfer at 21,100 won at the time of transfer, the transfer value (76,795,473 won) reported by the Plaintiff is more than 1/20 compared to the acquisition value (150,647,120 won), and the acquisition value of the pertinent land reported by the Plaintiff as the actual transaction value (753,235 won/land value) is more than 35 times the officially assessed value (21,100 won/land value) at the time of acquisition, and is more than 1 year compared to the acquisition value of the other land (182,241 won/land value) of one year at the time of acquisition.

3) Therefore, the instant disposition is lawful.

3. Conclusion

The plaintiff's claim is dismissed. It is so decided as per Disposition.