B. The burden of proving the legality of the estimated taxation

(c) Whether the estimated taxation disposition is appropriate, provided that the actual amount of income falls under the amount double the standard income level of an enterprise on the sole basis of disguised income.

B. The estimated taxation under Article 120 of the Income Tax Act is exceptionally acknowledged in cases where there is no tax base and documentary evidence of a taxpayer who is the basis for the determination of the tax base and amount of tax, or where it is impossible to impose tax by the basis of the taxation because the details are incomplete or false. Thus, the estimated taxation cannot be conducted by the method of estimation because it is impossible to investigate the actual amount of tax, as well as where it is reasonable and reasonable to reflect the method and contents of the estimation in the most true income amount. In a case where the legitimacy of such estimated taxation is disputed, the burden of proof for its rationality and validity is

C. The taxation of estimated income amount of the Plaintiff is unlawful as it lacks rationality and feasibility on the sole ground of the fact that there was a fact that the Plaintiff’s act of income deception was found solely based on the fact that the Plaintiff’s act of income deception was committed without considering the reflection of the disguised income loss at all.

The costs of appeal are assessed against the defendant.

1. The facts established by the court below in this case are as follows. In other words, the plaintiff, who is a manufacturer of veterinary products, shall file a final return on the tax base of global income tax with the total amount of 65,900,957 won for the year 1978, and shall pay global income tax and the defense tax accordingly calculated by 11% based on the basic income rate of 11,249,105 won for the total amount of 7,249,105 won for the year 1978, on the ground that the plaintiff is a disguised income earner, the defendant shall additionally impose the global income tax for the year 1978 on the plaintiff in accordance with the method of the estimation of estimated income tax for the year 1978, and the amount of 65,900,957 won for the total amount of 11% for the basic income rate of 11% for the disguised income earner shall be deemed as 14,498,210 won and calculated each tax amount of the global income tax and the tax amount based thereon to the plaintiff.

2. First of all, according to the provisions of Articles 120(1) and 124(1) of the Income Tax Act, the court below presumed that in determining the standard rate of income by type of business under Article 120 of the same Act, considering all the conditions affecting the enterprise's size and location conditions, etc., the court below should determine the amount of income calculated based on the real income. Under the provisions of Article 169-2(2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 9229 of Dec. 30, 1978), the Commissioner of the National Tax Service may determine a differential rate calculated based on the degree of loyalty such as withholding, collection of transaction, report on data, transaction training, etc. for the pertinent taxable period after deliberation by the Deliberation Committee on Standard Rate of Income under paragraph (1) of the same Article. However, regardless of all the conditions determining the enterprise's income amount, the court below determined that it merely provides for a differential rate to the Commissioner of the National Tax Service within the above meaning of the requirements for determining the enterprise's income amount.

In light of the above, the standard rate of income by type of business determined by the Government pursuant to Articles 120 and 124 of the Income Tax Act does not have the account books and documentary evidence necessary for the calculation of the tax base and the amount of tax, or where it is impossible to grasp the amount of income because the details are incomplete or false, it is a method of estimating and investigating the amount of income so that it can reflect the amount of income calculated as much as possible. On the contrary, setting the standard rate of income solely for the purpose of responding to taxpayers, regardless of whether the amount of income is reflected at all, is contrary to the purport of Articles 120 and 124 of the Income Tax Act.

However, the purport of Article 169-2 (2) of the former Enforcement Decree of the Income Tax Act stipulating that a certain rate may be increased or decreased by taking into account the degree of good faith in collecting withholding, collecting transactions, reporting data, fostering transactions, etc. for the pertinent taxable period is difficult to readily conclude that the purpose of this provision is solely to respond to a defaulted taxpayer without any relationship with all the requirements for determining income amount, such as the time of original judgment. Rather, the loyalty in collecting withholding, collecting transactions, reporting data, and fostering transactions, which are the grounds for taking into account the differential rate as listed in the above provision, can be the basis for measuring the accuracy of the determination of income amount for the pertinent company, and thus, it is difficult to view that it is a reason that is not entirely related to the reflection

Therefore, the above provision itself, which provides for estimation of income amount by taking account of these reasons, shall not be considered as a invalid provision in the Income Tax Act or a invalid provision which does not have any basis in the law. Thus, the judgment below which held that Article 169-2 (2) of the former Enforcement Decree of the Income Tax Act is invalid is erroneous in interpreting the law.

3. Next, even though the provision on the differential rate of the Enforcement Decree of the Income Tax Act is not null and void, the lower court determined that the highest rate of the differential rate of the income standard rate of the Defendant established in 1978 and applied to the Plaintiff was 22%, regardless of the reflection of the income amount, and that the tax disposition based on the above provision was determined in the sense of responding to a false income earner, etc., and was unlawful as it lacks validity

In light of the above, the estimated taxation under Article 120 of the Income Tax Act is exceptionally acknowledged in cases where there is no taxpayer's account books and documentary evidence, which are the basis for the determination of tax base and amount of tax, or where it is not possible to impose tax by the taxation based on the basis because the details are incomplete or false. Thus, the estimated taxation is limited to cases where it is impossible to conduct an investigation by the method of estimation, and it is reasonable and reasonable to reflect the method and contents of the estimation in the most true income amount. If there is a dispute about the legality of such estimated taxation, the burden of proof for its rationality and validity is the defendant who is the tax authority

However, as the highest rate of 22% of the standard income rate applied to the plaintiff as a disguised income in this case is equivalent to 11% of the average corporate standard income level, there is no evidence to acknowledge that the plaintiff's actual income amount is reasonable and reasonable, on the sole basis of the fact that the plaintiff's existence of income has been discovered even after examining the record that the plaintiff's existence of income was found. Rather, according to the records, the above high rate 22% is recognized as a certain rate in policy consideration that strict regulation of disguised income earners only without considering the actual income amount at all, and thus, the defendant's additional imposition disposition of this case based on the above high rate is not illegal as an estimate disposition that lacks consistency and feasibility.

The decision of the court below ordering the cancellation of the disposition of this case based on the same purport is just and there is no violation of law such as the theory of lawsuit.

4. 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 Lee Lee Sung-soo (Presiding Justice)