A. The Plaintiffs are individuals engaged in the wedding service business under the trade name of the Daegu Dong-gu D (hereinafter “instant site”) called “Empic Design.”

As the profitability of the wedding business has deteriorated, the Plaintiffs obtained a building permit on May 7, 2012 to conduct the business of constructing and selling complex facilities (officetel) on the instant site (hereinafter “instant business”). Around August 2013, the Plaintiffs changed the business plan to a new construction of a main complex building, but on November 11, 2013, the instant business was suspended due to the loss of ownership of the instant site, etc. on the ground of the loss of ownership.

B. On November 29, 2013, the Plaintiffs received a tax invoice of KRW 1.2 billion from the value of supply in the environment (hereinafter “instant tax invoice”) when settling the design service cost for the instant project with respect to E&C, an architect office environment (hereinafter “Environmental E&C”).

C. On January 25, 2014, the Plaintiffs filed an application for refund with the Defendant for the amount of KRW 120 million, including the input tax amount, to KRW 121,480,782, and calculated the output tax amount as KRW 1,359,927, based on the output tax amount as KRW 120,120,855 (i.e., KRW 121,480,782, the output tax amount - KRW 1,359,927).

On March 17, 2014, the Defendant issued a prior notice of taxation (hereinafter “instant refusal disposition”) to impose additional tax of KRW 24 million without deduction, as the instant input tax amount is not related to the instant business. On May 9, 2014, the Defendant decided and notified the amount of additional tax of KRW 24 million (i.e., additional tax for excess return of KRW 12 million, additional tax for failure to submit a list of tax invoices, and KRW 12 million for failure to submit a list of tax invoices) (hereinafter “instant disposition”), and combined with the instant refusal disposition of refund.

E. The Plaintiffs raised an objection on June 12, 2014.