2. The costs of appeal shall be borne by the Defendant.

The Defendant’s disposition of imposition of global income tax of KRW 192,443,250 against the Plaintiff on April 12, 2006 shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

A. From March 25, 1999 to October 22, 2001, the Plaintiff engaged in clothing export business under the trade name of ○○○○○-12, ○○○○-dong, Seoul, to ○○○○○-12. In filing a comprehensive income tax return for the Defendant in 2001, the Plaintiff received four copies of the tax invoice for the first term portion from ○○○○ Plus Co., Ltd. (the trade name before the change: ○○○○○ Korea Co., Ltd.; hereinafter referred to as hereinafter referred to as '○○○○○○ Korea Co., Ltd.’) for the first term portion in 2001 (hereinafter referred to as 'the instant tax invoice’), and included it in the global income tax as necessary expenses, and filed a return as the purchase tax invoice for value-added tax.

B. On April 12, 2006, the Defendant deemed the instant tax invoice issued by the non-party company, which was accused of data, as a processing tax invoice issued without any actual transaction, and deemed the supply value of the instant tax invoice not to be included in necessary expenses, and notified the Plaintiff of the additional correction and notification of KRW 192,443,250, global income tax in 2001 (hereinafter “instant disposition”).

C. The Plaintiff was dissatisfied with the instant disposition and requested to the National Tax Tribunal for an inquiry on July 10, 2006, but was dismissed on January 25, 2007.

[Reasons for Recognition] Evidence No. 1, Evidence No. 9, Evidence No. 1, Evidence No. 2, Evidence No. 2-10, Evidence No. 4-2 and 3, and the purport of the whole pleadings

2. Whether the disposition of imposition is lawful.

A. The plaintiff's assertion

The Plaintiff entered into a clinical processing service contract with the non-party company after receiving an order for clothing from the non-party company around January 2001, and entered into such contract from January 2001 to March 2001, paid KRW 255,245,600 to the non-party company as the price for processing and supplying the clothing from the non-party company. Thus, the instant tax invoice was issued through a normal transaction, but the instant disposition on the different premise is unlawful.

(b) Related statutes;

Article 80 (Determination and Correction of Income Tax Act)

(c) Fact of recognition;

(1) The details of the instant tax invoice, the export goods processing contract, and the details of the passbook transaction submitted by the Plaintiff to Nonparty Company by asserting that the transaction under the instant tax invoice was an actual transaction are as follows.

(2) The cash receipt and disbursement (No. 19 certificate: the plaintiff submitted to the non-party company at each date in the administrative appeal and the first instance trial proceedings) stated that the amount of 1 to 40 won out of the amount and 619,640 won out of the amount and 619,640 won was paid under the name of credit settlement, and it corresponds to the withdrawal date of the above cash receipt and disbursement statement and the above details of the passbook transaction. On the other hand, the other receipt and disbursement statement (No. 11 certificate: the defendant delivered to the defendant with the defect of the plaintiff's application for the submission of the document at the appellate trial and submitted it as evidence) is written that the plaintiff paid each amount to the non-party company on each date of the tax invoice in this case.

(3) According to the customer president between the Plaintiff and the non-party company’s customer president, the advance payment amount of KRW 5,00,000 on January 30, 2001; KRW 62,925,960 on February 28, 2001; KRW 14,145,440 on February 28, 2001; KRW 25,554,560 on March 20, 201; KRW 45,000 on March 30, 2001; KRW 50,000 on April 50, 200, KRW 619,640 on May 22, 2001; and KRW 25,460 on March 25, 200 on the other hand, the supply amount of the non-party company’s cash is also stated in the account book.

(4) The Plaintiff submitted the deposit sheet that he paid only the amount to the non-party company. The Plaintiff had cash transactions between the non-party company and the non-party company in February 36, 1999, KRW 960,000, KRW 14,850,000, and all of the above transactions were recognized as normal transactions by the Defendant. At the time of issuance of the tax invoice of this case, the non-party company’s representative director at the time of issuance of the tax invoice of this case submitted a confirmation that the transaction was actually conducted between the Plaintiff and the non-party company.

(5) In the event that the Plaintiff received an order from ○○N Co., Ltd. to purchase the raw materials from ○○○, etc., processed them to manufacture the clothing, and exported them after being supplied. The Plaintiff did not have the processing facilities of clothing, etc. itself. According to the Plaintiff’s value-added tax return on January 1, 2001 to March 31, 2001, the total export amount of KRW 528,350,839 is KRW 211,269,00, KRW 315,960,60 with the cost of purchasing the raw materials during the above period, and KRW 315,60 with the cost of purchasing the raw materials. If it is deemed that the instant tax invoice was false and that it was not spent as the cost of processing, then the processing fees for the above period are less than the amount of KRW 60,715,000, KRW 315,960, KRW 605,505,00).

[Based on the recognition] The evidence No. 2-1 through 10, the evidence No. 4-1 through 3, the evidence No. 5, the evidence No. 6-1 through 5, the evidence No. 7, the evidence No. 8, the evidence No. 10-1 through 9, the evidence No. 11, the evidence No. 12-1 through 3, the evidence No. 13-1, 2, the evidence No. 14-1, 2, the evidence No. 17-1 through 21, the evidence No. 23-1 through 28, the evidence No. 24, the evidence No. 4-3, the evidence No. 9-12, the evidence No. 20, the purport of the whole pleadings, and the purport of the whole pleadings.

D. Determination

(1) In the administrative litigation seeking the revocation of a taxation disposition on the grounds of illegality, the tax authority has the burden of proving the legality of the taxation disposition and the existence of the taxation requirement fact, so in principle, the tax authority shall bear the burden of proving necessary expenses which are the basis of the determination of taxable income. However, insofar as there are special circumstances such as where the tax invoice on some of the expenses reported by the taxpayer was proved to be false without real transactions, the tax authority may argue whether it is real expenses, and where it is proved to the extent that the taxpayer's assertion and the other party to the payment was proved to be false, it is necessary to prove that it is easy for the taxpayer to present data such as books and evidence regarding the fact that such expenses were actually paid (see, e.g., Supreme Court Decisions 9Nu3407, Jul. 14, 1995; 96Nu8192, Sept. 26, 1997).

(2) Pursuant to the above legal principles, the Plaintiff’s transaction amounting to the supply value of the instant tax invoice between the Plaintiff and the Nonparty Company was entered in the Plaintiff’s account book and the Nonparty Company’s account book, and the Plaintiff exported the clothing purchased from the Nonparty Company, and if the transaction amounting to the supply value of the instant tax invoice is the processing transaction, it is less than the amount exported by the Plaintiff at the time. ② Although the Plaintiff did not submit the deposit sheet for the total amount of the supply value of the instant tax invoice, the Plaintiff submitted the deposit sheet for the export contract and the deposit sheet for the partial amount between the Nonparty Company. The representative of the Nonparty Company confirmed that the contract was the actual transaction. ③ The Plaintiff was a cash transaction between the Nonparty Company and the Nonparty Company, which was recognized as a normal transaction by the Defendant, and there was no evidence that it constitutes the supply value of the instant tax invoice, even if it did not constitute the supply value of the instant tax invoice, it cannot be readily concluded that the Plaintiff did not have any other evidence that the Plaintiff submitted the receipts and disbursements No. 1.

(3) Therefore, the Defendant’s disposition of this case, which did not include necessary expenses on the ground that the transaction amounting to the value of supply of the instant tax invoice is a processing transaction, is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted on the grounds of its reasoning, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed as it is without merit. It is so decided as per Disposition.

[Seoul Administrative Court 2007Guhap6755 [21 August 2007]

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

Cheong-gu Office

A. From March 25, 1999 to October 22, 2001, the Plaintiff: (a) as a business operator who had engaged in clothing export business in the name of “○○○○○ Dong ○○○○○○○○○dong,” “○○ Korea; and (b) filed a return on the comprehensive income tax for 2001 with the Defendant, the Plaintiff received four copies of the tax invoice from ○○○○○ Plus Co., Ltd. (the trade name before the change: ○○○○○○ Korea Co., Ltd.; hereinafter “the non-party company”); and (c) included it in the global income tax as necessary expenses; and (d) reported it as the purchase tax invoice of value-added tax.

B. On April 12, 2006, the Defendant deemed the instant tax invoice issued by the non-party company, which was accused of data, as the processing tax invoice issued without any actual transaction, and added the supply value of the instant tax invoice to the necessary expenses, and subsequently corrected and notified the Plaintiff of KRW 192,443,250 of the global income tax in 2001 (hereinafter “instant disposition”).

C. On July 10, 2006, the Plaintiff was dissatisfied with the instant disposition and requested to the International Tribunal for an inquiry, but was dismissed on January 25, 2007.

[Reasons for Recognition] Gap evidence 1, Gap evidence 9, Eul evidence 1, Eul evidence 2-1 to 10, Eul evidence 4-2 and 3-3, and the purport of the whole pleadings

2. Whether the disposition of imposition is lawful.

A. The plaintiff's assertion

The Plaintiff received an order of clothes from around January 2001, and entered into a clinical processing service contract with the non-party company, and received the clothes from the non-party company from around January 2001 to March 2001 under that contract and paid KRW 25,245,60 to the non-party company with the proceeds of processing and delivery. Thus, the instant tax invoice was issued under normal transaction, but the instant tax invoice was unlawful on a different premise.

(b) Related statutes;

Income Tax Act (amended by Act No. 7319 of Dec. 31, 2004)

Article 80 (Settlement and Correction)

(1) If a person liable to make a final return on the tax base pursuant to Articles 70 through 72 or 74 fails to make such return, the chief of the district tax office or the director of the regional tax office having jurisdiction over the place of tax payment shall determine the

(2) If a person who has made a final return on the tax base pursuant to Articles 70 through 72 or 74, falls under any of the following subparagraphs, the superintendent of the district tax office or the director of a regional tax office having jurisdiction over the

1. Where an omission or error exists in the contents of return;

(c) Fact of recognition;

(1) The details of the contract for processing goods and the details of passbook transactions presented by the Plaintiff as materials proving that the transaction under the instant tax invoice was actually conducted with the Nonparty Company are as follows.

The tax invoice of this case

Export Product Processing Contract

Details of passbook transactions

Date

Value of supply (cost)

Date of contract

Contract Price (cost)

Date of delivery

Date

Amount (won)

January 30, 200

70,013,200

January 2, 2001

70,013,200

January 8, 2001

January 10, 200

(1) 5,000,000

January 27, 2001

February 9, 2001

(2) 62,925,960

d February 28, 2001

62,058,200

d February 1, 2001

62,058,200

February 7, 2001

February 17, 2001

(3) 39,700,000

d February 20, 200

March 24, 2001

(4) 45,000,000

d March 20, 201

51,152,000

may 2, 2001

51,152,000

March 10, 201

April 30, 201

(5) 50,000,000

March 30, 201

72,022,200

may 2, 2001

72,022,200

March 19, 2001

may 2, 2001

(6) 13,500,000

March 27, 2001

guidance.

255,245,600

255,245,600

266,125,960

(2) According to the cash receipt and disbursement statement of the Plaintiff, the amount of 1 to 619,640 won out of the amount and 6,640 won was paid to each non-party company for the settlement of accounts receivable (total 255,245,600 won). According to the customer’s ledger between the non-party company and the non-party company, the amount of 5,000,000 won on January 30, 201; 62,925,960 won on February 28, 2001; 14,145,440 won on February 28, 201; 25,55,560 won on March 20, 201; 2050 won on the cash account of the non-party company’s 14,554,560 won on March 30, 201.

(3) The Plaintiff submitted the deposit sheet to the Nonparty Company that only paid the amount to the Plaintiff. The Plaintiff was a cash transaction of KRW 14,850,000 on February 1, 1999 between the Nonparty Company and the Nonparty Company, but all of the transaction was recognized as a normal transaction by the Defendant. At the time of issuance of the instant tax invoice, the Nonparty Company, the representative director of the Nonparty Company, at the time of issuance of the instant tax invoice, submitted a confirmation that there was a real transaction between the Plaintiff and the Plaintiff.

(4) In the event that the Plaintiff received an order for clothing from the foreign loan, he purchased the raw materials from ○○N Co., Ltd., processed them to manufacture the clothing, and exported them after being supplied to the non-party company, etc. The Plaintiff did not have the processing facilities of clothing, etc. itself. According to the Plaintiff’s value-added tax return on January 1, 2001 to March 31, 2001, the total export amount of KRW 528,350,839 is KRW 211,269,00, KRW 315,960,60 with the cost of purchasing the raw materials during the above period, and KRW 315,60 with the cost of purchasing the raw materials during the above period. If it is deemed that the instant tax invoice was false and that it was not spent as the cost of processing, it shall not be deemed that the cost of processing processing was less than the amount of KRW 60,715,00 (315,96,60-25,05).

[Ground of recognition] Gap evidence 2-1 through 10, Gap evidence 4-1 through 3, Gap evidence 5, Gap evidence 6-1 through 5, Gap evidence 7, 8, Gap evidence 10-1 through 9, Gap evidence 11, Gap evidence 12-1 through 3, Gap evidence 13-1, 2, Gap evidence 14-1, 2, Eul evidence 17 through 21, Eul evidence 4-3, the purport of the whole pleadings, and the purport of the whole pleadings

D. Determination

(1) In the administrative litigation seeking the revocation of a taxation disposition on the grounds of illegality, the tax authority has the burden of proving the legality of the taxation disposition and the existence of the taxation requirement fact, so in principle, the tax authority shall bear the burden of proving necessary expenses which are the basis of the determination of taxable income. However, insofar as there are special circumstances such as where the tax invoice on some of the expenses reported by the taxpayer was proved to be false without real transactions, the tax authority must prove that it is reasonable to determine whether it is real expenses, and where it is proved to the extent that the taxpayer's assertion and the other party to the payment was proved to be false, it is necessary to prove that it is easy for the taxpayer to present data such as books and evidence regarding the fact that such expenses have been actually paid (see, e.g., Supreme Court Decisions 9Nu3407, Jul. 14, 1995; 96Nu8192, Sept. 26, 197).

(2) As seen earlier with regard to the instant case, although a transaction falling under the value of the instant tax invoice between the Plaintiff and the Nonparty Company was a cash transaction, it is recorded that the amount deposited on each corresponding date was paid to the Plaintiff’s cash receipt book and the customer ledger according to the Plaintiff’s transaction date. ② Although the Plaintiff failed to submit a deposit slip on the total value of the instant tax invoice, the Plaintiff submitted a deposit slip on the export consignment contract and part of the amount between the Nonparty Company. The representative of the Nonparty Company confirmed that the contract was an actual transaction, ③ the Plaintiff was a cash transaction between the Nonparty Company and the Nonparty Company, which was recognized as a normal transaction from the Defendant, and the transaction falling under the value of the instant tax invoice was less than the amount of the Plaintiff’s export if the transaction was a processing transaction falling under the value of the instant tax invoice, the Nonparty Company was accused of the part of the data, and it cannot be readily concluded that the Plaintiff did not pay the instant tax invoice in full due to the mere fact that the Plaintiff did not have any other evidence that it constitutes the value of the instant tax invoice.

Therefore, the Defendant’s disposition of this case, which did not include necessary expenses on the ground that the transaction corresponding to the value of supply of the tax invoice of this case is a processing transaction, is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition with the assent of all participating Justices.