2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

Each disposition listed in the separate sheet No. 1 that the Defendants against the Plaintiffs shall be revoked.

A. The Plaintiffs loaned a total of KRW 16.5 billion to AA, a person with a special relationship with AA (hereinafter referred to as “stock company,” in the name of a corporation for convenience), which was in the state of capital erosion, several times from August 14, 2006 to August 10, 2010, the Plaintiffs decided to convert into investment (hereinafter referred to as “instant investment”) as the financial situation of AA continues to worsen.

B. Accordingly, AA passed a resolution on August 24, 2010 with capital increase at the board of directors on August 24, 2010, the Plaintiffs participated in BB 2,009, 95,000 won for each investor (Plaintiffs), 375,700 won for each share, CCC 2,69, 99, 95,200 won for each share, 504,672 5,350 won for DD 1,009, 99, 750 won for each share, 18,350 won for each share, EE 3,529, 99, 50 won for 659, 350 won for each share, FF49, 249, 909, 900, 105, 305 won for each share, 18,505 won for each share and 1850 won for each share.

C. On May 30, 2011, the Plaintiffs sold 3,084,110 shares converted into investment to GG to one won per share, and upon reporting the tax base and amount of corporate tax for the year 201 and 2012, the Defendants included KRW 16,496,90,390 as losses from stock disposal.

D. After lending funds irrelevant to the business affairs of AA, the director of the Seoul Regional Tax Office determined that the total amount of the loans in fact was included in deductible expenses in the amount of stock disposal losses through the method of conversion of investment in order to avoid the limitation under the Corporate Tax Act that provides that even if the claims against a specially related person cannot be recovered as bad debt even if it is impossible to collect, it shall be deemed to be subject to the avoidance of wrongful calculation under Article 88(1)1 of the Enforcement Decree of the Corporate Tax Act, and at the business year (2010) to which the date of acquiring the stocks of this case belongs, the amount in excess of the market price of the stocks of this case shall be included in deductible expenses (income disposal and other outflow outside company), and the same amount shall be included in deductible expenses (income disposition shall be reserved in 2011 and 2012) in the business year (201) to which the date of disposal of the stocks of this case belongs, and then corrected and notified each corporate

E. The Plaintiffs are dissatisfied with each of the instant dispositions, and each of the instant dispositions to the Director of the Tax Tribunal on May 2, 2014.

In addition to Article 41 (1) 3 of the Corporate Tax Act and Article 72 (2) 4-2 of the Enforcement Decree of the Corporate Tax Act in the process of a request for a trial, the director of the Seoul Regional Tax Office added the acquisition value of the stocks of this case acquired through a conversion of investment into investment to "5,350 won, not "0 won, which is the market price," and added the acquisition value to "in the course of a request for a trial, 16.5 billion won in the business year (2010) to which the date of acquiring the stocks of this case belongs" and added Article 88 (1) 8-2 of the Enforcement Decree of the Corporate Tax Act to "in the course of a request for a trial, 201 and 16.5 billion won in the calculation of losses from the disposal of the stocks of this case."

F. On June 26, 2015, the Director of the Tax Tribunal rendered a decision to dismiss all appeals filed by each Plaintiffs.

(c)

[Ground of recognition] Facts without dispute, Gap evidence 1 to 7, Eul evidence 1, Eul evidence 7 to 9 (including the number of each kind of evidence) and the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. Summary of the plaintiffs' assertion

1) Article 88(1)1 of the Enforcement Decree of the Corporate Tax Act concerning the wrongful calculation panel (Article 88(1)1 and 8-2 of the Enforcement Decree of the Corporate Tax Act), even if the Plaintiffs participated in capital increase through a conversion of investment from AA, a person with a special relationship under the Corporate Tax Act, and acquired stocks at a price higher than their market price, this cannot be applied to capital transactions, and Article 88(1)1 of the Enforcement Decree of the Corporate Tax Act concerning the high-value purchase of assets as capital transactions, and since there is no difference between AAA and its distribution of its own profits to the Plaintiffs through capital increase, Article 88(1)8-

2) Provisions on the acquisition value of assets (Article 72(2)4-2 of the Enforcement Decree of the Corporate Tax Act)

A) A deviation from the limitation of addition or change of the grounds for disposition

If the provision on the wrongful calculation denial of corporate tax under the Corporate Tax Act, which is the initial reason for disposal, is a provision on the acquisition value of assets under the Corporate Tax Act, which is the reason for disposal of stocks of this case, it shall be considered as the object of objection. However, if the provision on the acquisition value of assets under the Corporate Tax Act, which is the reason for disposal added by the tax authority, is a reason for disposition, the tax authority should file a request for correction with the tax authority on the grounds that the deficit amount of the business year to which the date of acquisition of stocks of this case belongs falls short of the deficit amount to be reported under the tax law. Thus, the identity of disposition is not recognized because the additional reason for disposal should be disputed differently. Therefore, it is not allowed for the Defendants to add Article 72 (2) 4-2 of the Enforcement Decree of Corporate Tax Act, which is

B) invalid provisions beyond the scope of delegation by the parent law

Article 41(1) of the Corporate Tax Act, a parent corporation, is merely delegated to Article 72(2)4-2 of the Enforcement Decree of the Corporate Tax Act, which is a subordinate statute, only matters concerning the method of calculating specific expenditure required to acquire the relevant assets in relation to the acquisition of assets. However, Article 72(2)4-2 of the Enforcement Decree of the Corporate Tax Act provides that the value of stocks, etc. acquired through debt-to-equity swap without delegation by the parent law shall be arbitrarily determined as the market price at the time of acquisition. Therefore, each of the dispositions of this case based on

(b) Related statutes;

Attached Form 2 is as shown in the relevant statutes.

C. Determination

1) The part concerning the wrongful calculation panel (Article 88(1)1 and 8-2 of the Enforcement Decree of the Corporate Tax Act)

Article 88(1)1 of the Enforcement Decree of the Corporate Tax Act is not applicable to cases where assets are purchased at a price higher than the market price because it is difficult to view it as falling under "cases where assets are purchased at a price higher than the market price" (see Supreme Court Decision 2012Du23488, Jun. 26, 2014) and Article 88(1)8-2 of the Enforcement Decree of the Corporate Tax Act, even if the Plaintiffs acquired the stocks at a price higher than the market price of the stocks issued by AA, which is a person with a special relationship, (1) in light of the contents and purport of Articles 15, 17, 19, and 20 of the Corporate Tax Act, which provide that the increase or decrease of net assets due to capital transactions shall not be included in the calculation of earnings or losses, and (2) in order to apply Article 88(1)8-2 of the Enforcement Decree of the Corporate Tax Act, the investment in this case cannot be deemed as grounds for each of the above dispositions or dispositions in this case.

Therefore, Article 88 (1) 1 and 8-2 of the Enforcement Decree of the Corporate Tax Act and Article 72 (2) 4-2 of the former Enforcement Decree of the Corporate Tax Act, which are provisions concerning the acquisition value of assets as the grounds for each disposition of this case by the Defendants, are legitimate.

2) Provisions on the acquisition value of assets (Article 72(2)4-2 of the Enforcement Decree of the Corporate Tax Act)

A) Whether the grounds for disposition deviate from the limits of addition and change

The tax authority applied the provision on the wrongful calculation book under Article 88 (1) 1 of the Enforcement Decree of the Corporate Tax Act, which is the initial reason for disposal, to the business year (2010) to which the date of acquiring the shares of this case belongs, as well as to include the same amount in the calculation of earnings (the disposition of income is kept in △△△), and to include the same amount in the calculation of losses (the disposition of income is reserved in 201 and 2012), and to make the tax adjustment and disposition in the manner of tax adjustment and disposition in the calculation of losses (the reservation of disposition of income) in the business year (201 and 2012) to which the date of disposal of the shares of this case belongs. Meanwhile, even if Article 72 (2) 4-2 of the Enforcement Decree of the Corporate Tax Act of the Corporate Tax Act on the acquisition of assets added as the reason

Compared to the above two cases, the above two cases did not affect the tax base of the business year to which the date of acquiring the shares of this case belongs, and brought about the same result of closing the tax adjustment and disposal of the shares in the business year to which the date of disposal of the shares of this case belongs by means of non-deductible of losses or inclusion of losses in deductible expenses, and the facts constituting the basis thereof are identical. Thus, it is difficult for the tax authority to add Article 72 (2) 4-2 of the Enforcement Decree of the Corporate Tax Act, which is a provision on the acquisition value of assets of this case, as

B) Whether it is an invalid provision beyond the scope of delegation by the parent law

Article 41 (1) of the Corporate Tax Act provides that the acquisition value of the assets acquired by a domestic corporation shall be the amount prescribed by Presidential Decree at the time of acquisition with respect to the assets other than the assets purchased by the domestic corporation from another person (paragraph (1) or the assets acquired by the domestic corporation by its own manufacture, production, or construction or by any other similar means (paragraph (2). According to delegation, Article 72 (2) 4-2 of the Enforcement Decree of the Corporate Tax Act provides that the value of the stocks acquired through debt-equity swap shall, in principle, be based on the market price at the time of acquisition and, in exceptional cases, on the book value

In full view of the language and purport of each of the above provisions, Article 41(1) of the Corporate Tax Act directly provides for the scope of the acquisition value with respect to subparagraphs 1 and 2 that can verify the actual acquisition value, and delegates it to the Presidential Decree for other cases. This provision provides for various cases where it is difficult to verify the actual acquisition value or it is necessary to determine the acquisition value differently from the actual acquisition value under tax policy so that the market value, which is the substantial value of the acquired assets, can be defined as a substitute for the real acquisition value. Therefore, Article 72(2)4-2 of the Enforcement Decree of the Corporate Tax Act provides for the value of the stocks acquired through a conversion into investment with delegation under Article 41(1) of the Corporate Tax Act as the mother, cannot be deemed to be a violation of the law or goes beyond the limit of the delegation scope. Accordingly, the plaintiffs' assertion on this part is without merit.

3) Sub-decisions

The disposition of this case, which was excluded from deductible expenses, is legitimate with respect to the amount of stock disposal loss equivalent to the difference between the market price of the shares and the acquisition price of shares by conversion into equity investment.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed in entirety as it is without merit. It is so decided as per Disposition.