Whether land in the public record falls under "farmland subject to non-taxation of capital gains tax due to substitute land for farmland, the category of which is not actually used for farming at the time of transfer or farmland (negative)

[1] Article 89 subparagraph 4 of the Income Tax Act; Article 153 (2) of the Enforcement Decree of the Income Tax Act; Article 70 (1) of the Enforcement Rule of the Income Tax Act

Supreme Court Decision 88Nu6252 Decided February 14, 1989 (Gong1989, 437), Supreme Court Decision 89Nu664 Decided February 13, 1990 (Gong1990, 683), Supreme Court Decision 91Nu7422 Decided November 12, 1991 (Gong1992, 150), Supreme Court Decision 97Nu706 Decided September 22, 1998 (Gong198Ha, 2617)

Jin-Jin (Attorney Yu Chang-chul, Counsel for the defendant-appellant)

Head of the High Tax Office

Seoul High Court Decision 2003Nu10932 delivered on April 14, 2004

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

Article 89 subparag. 4 of the Income Tax Act and Article 153(2) of the Enforcement Decree of the same Act stipulate that the previous land and the newly acquired land shall be farmland, and Article 70(1) of the Enforcement Rule of the Income Tax Act provides that "farmland" means the land actually used for cultivation regardless of the land category on the public register as a field and field, so even if the land category on the public register is farmland, it shall not be deemed farmland that is not actually used for cultivation at the time of transfer, and thus, it shall not be deemed non-taxation for capital gains tax.

According to the reasoning of the judgment below, after compiling the adopted evidence, the court below acknowledged facts as stated in its reasoning. Since the plaintiff planted and cultivated seedlings on the land of this case from around 1992 to sold ornamental trees for the purpose of ornamental trees, etc., it can be said that the above land has been used for cultivating the above land. However, after March 1995, 195, the seeds and seedlings planted on the above land were sexual trees and sold no longer due to the lack of commercial nature, and the plaintiff could not be disposed of or disposed of for any other purpose because it was impossible for the plaintiff to grow or manage them for a long time since it was left alone on July 2001, which was at the time of the transfer of the land of this case. In light of the above, since the plaintiff could not be deemed to have actually used for cultivating the land of this case after the transfer of the land of this case, the court below determined that income from the transfer of the land of this case cannot be deemed to have been generated as farmland subject to non-taxation income from the transfer of the land of this case.

In light of the above legal principles, relevant statutes and records, the above fact-finding and decision of the court below is just, and there is no error of law such as misconception of facts or incomplete deliberation due to violation of the rules of evidence or misunderstanding of legal principles as to farmland subject to exemption from capital gains tax due to substitute land.

Therefore, the appeal is 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.

Justices Shin Hyun-chul (Presiding Justice)