Supreme Court-2015-Du-1076 (2015.07.09)

early 201J 4973 (Law No. 10, 2012)

If the books or evidentiary documents appear in the revocation litigation process, the amount of tax shall be determined by the method of the on-site investigation.

Even if the tax authority imposed estimated taxation due to deficiencies of account books, etc. at the time of the disposition, when the account books and other documentary evidence have expired in the lawsuit for cancellation of the disposition, it shall determine the amount of income or tax base by means of on-site investigation based on such account books

Article 55 (Calculation of Necessary Expenses of Business Income)

(Chuncheon)Revocation of revocation of imposition of income tax, etc., 2015Nu665

AA

BB Director of the Tax Office

Chuncheon District Court Decision 2012Guhap1202 Decided May 31, 2013

The judgment of the court before remand

Seoul High Court Decision 2013Nu647 decided January 28, 2015

Supreme Court Decision 2015Du1076 Decided July 9, 2015

October 10, 2016

November 7, 2016

1. Upon receipt of a claim for change in exchange at the trial, the part exceeding 59,146,500 won among the disposition imposing global income tax for the year 2009 against the Plaintiff on October 8, 2012 shall be revoked in excess of 47,429,205 won among the disposition imposing global income tax for the year 2010.

2. The plaintiff's remaining appeal and remaining claims are dismissed, respectively.

3. 19/20 out of the total costs of the lawsuit shall be borne by the plaintiff and the defendant living together.

1. Purport of claim

For the Plaintiff:

(a) a disposition imposing global income tax of KRW 98,570,885 on September 1, 201;

(b) limited to October 8, 2012

1) the portion exceeding KRW 17,343,623 of the disposition imposing global income tax for the year 2007:

2) Of the disposition imposing global income tax for the year 2008, the portion exceeding KRW 7,000,105:

3) the portion exceeding KRW 17,409,467 of the disposition imposing global income tax for the year 2009:

4) The portion exceeding 16,950,812 of the disposition imposing global income tax for the year 2010:

Each cancellation shall be revoked.

[2] From 2007 to 2010, the purport of the claim was changed to an exchange in relation to the imposition of global income tax, and the Plaintiff also filed a claim for revocation of the imposition of value-added tax, individual consumption tax, and education tax as stated in [Attachment 1] list 6 to 35 of the said tax assessment disposition, but the subsequent determination was made.]

2. Purport of appeal

The judgment of the first instance court shall be revoked. On September 1, 201, the defendant revoked the disposition of imposition of global income tax for each of the annexed Table 1-1 through 5 against the plaintiff on September 1, 201.

1. Basic facts

A. From October 12, 2005 to April 21, 201, the Plaintiff operated an entertainment drinking house with the trade name of 00 00 Do 00-0 to 00 Do 00, "E in the name of other persons, such as CCC, DDD," (hereinafter referred to as "the instant business establishment"). B. The Defendant, upon the investigation into the instant business establishment, confirmed that the Plaintiff had omitted the amount of income while operating an entertainment drinking house under the name of other persons, and requested the Plaintiff to submit an account book necessary for confirming the amount of income. However, the Plaintiff failed to submit account book, etc. However, the Defendant calculated each sales amount of KRW 760,550,00 from 206 to 2010, and determined that the sales amount of KRW 7650,000 was omitted, and based on this, the details of the disposition imposing individual consumption tax, global consumption tax, education tax, and individual consumption tax were omitted (hereinafter referred to as the following).

C. On October 27, 201, the Plaintiff filed a request for a trial with the Tax Tribunal. On May 31, 2012, the Tax Tribunal rendered a decision to the effect that the disposition of imposition of KRW 5,731,610 on September 5, 201, which the disposition authority made on the applicant on September 5, 201, shall be KRW 227,189,000 with the tax base (supply price) at KRW 227,189,00, and that the disposition of global income tax imposed on the applicant on September 5, 201, the disposition of imposition of global income tax by the disposition authority on which the disposition authority made the applicant on September 5, 201 shall reflect the result of the property assessment of the first value-added tax base in the year 2007, and the individual consumption tax and education tax are included in the total amount of income for each taxable period due to mistake.

D. After that, in accordance with the purport of the above decision, the Defendant partially reduced the value-added tax and the comprehensive income tax for the period of January 2007 against the Plaintiff, and rendered each disposition, such as the entry in the separate tax assessment list No. 1.

E. Accordingly, the Plaintiff filed a lawsuit against the Defendant seeking revocation of the entire taxation disposition stated in the separate sheet No. 1 attached hereto with the Chuncheon District Court 2012Guhap1202, but the court of first instance dismissed the Plaintiff’s claim in its entirety.

F. Accordingly, the Plaintiff filed an appeal with the Seoul High Court (Skcheon) (hereinafter referred to as “Seoul High Court before remanding the sales amount”), and the lower court prior to remanding the case, determined that the Defendant did not reflect the necessary expenses corresponding to the sales amount in calculating the estimated sales amount in the manner of estimation and did not meet the reasonable and reasonable method, and thus, the entire global income tax imposition disposition (attached Table 1 through 5) in the attached Table 1 should be revoked. In so doing, the Plaintiff’s appeal against the claim for revocation of the above global income tax imposition disposition should be accepted, and the first instance court revoked the judgment, and the judgment of revocation of the imposition, and the remaining claim for revocation of the tax disposition shall be maintained as it is, and the judgment of the first instance court rendered the dismissal of the appeal.

(g) However, the judgment of the court prior to the above remanding was appealed only by the defendant and filed an appeal with the Supreme Court 2015Du1076, and the court of final appeal was submitted to the plaintiff before the remanding, and the court of final appeal can calculate a legitimate amount by on-site investigation method based on the credit card sales data submitted by the defendant and the above credit card sales data. As such, the court below should have revoked the tax amount by comparing the global income tax amount imposed by the defendant and the above legitimate tax amount, and the court below should have revoked the disposition imposing global income tax only if the tax amount imposed by the defendant exceeds the legitimate amount. Nevertheless, the court below reversed the judgment of the court below and remanded it to the court."

2. Scope of the deliberation of the political party;

A. According to the above facts, since the claim for revocation of each disposition listed in the [Attachment 1] 6 through 35 in the annexed list is already separated and finalized, the subject of the judgment at the court is the claim for revocation of each disposition of global income tax listed in [Attachment 1] through 5 in the annexed list of tax assessment.

B. In addition, according to the overall purport of the statements and arguments set forth in No. 19-1 through 4 of the evidence No. 19-4, the Defendant rendered a disposition of increase or decrease as follows with respect to the global income tax on October 8, 2012 to 2007 through 2010 (excluding the year 2006), each of which belongs to the global income tax in the proceeding of the instant lawsuit (excluding the year 200

C. Accordingly, the Plaintiff changed the subject matter of revocation of imposition of global income tax for each of the years 2007 through 2010 (excluding the year 2006) to the imposition disposition on October 8, 2012. However, the Plaintiff sought revocation only within the scope of the amount of imposition imposed on September 1, 2011.

D. Therefore, the scope of adjudication at the court shall be the full global income tax for the year 2006, which the defendant performed against the plaintiff on September 1, 201, and the portion exceeding the increased amount on October 8, 2012 (the amount of disposition issued as of September 1, 201) among the disposition imposing global income tax for the year 2007 through 2010, which belongs to the plaintiff on October 8, 2012, respectively (hereinafter referred to as "each disposition of this case") (hereinafter referred to as "each disposition of this case").

(a) Calculation of sales;

Although the Plaintiff’s assertion is not clear, the Plaintiff’s determination of legitimacy of each of the dispositions of this case based on the legitimate tax amount calculated on the sales account book in the instant lawsuit disputing taxation disposition conducted by means of the correction of estimated tax amounts even after the lapse of the trial. It seems to be unfair and unfair, and should be based on the sales amount calculated by the method of correction of estimated tax amounts.

"However, the scope of a subject matter in a lawsuit seeking revocation of a tax disposition is not "the basic identity of the grounds for the disposition," but "the modification of the grounds for the disposition is not the change of the subject matter of the lawsuit." Therefore, in calculating a legitimate comprehensive income tax, there is no relation to the change of the subject matter of the lawsuit." In addition, in the Income Tax Act, it is recognized that there is no amount of income or the taxpayer's account or evidentiary documents, which are the grounds for the determination of the tax base, or if it is impossible to conduct on-site investigation because the contents are incomplete or false, it cannot be subject to additional taxation. However, in a lawsuit seeking revocation of a tax disposition, if there are books or evidentiary documents that can be on-site investigation, it can be argued that the parties to the lawsuit submit all the materials until the closing of argument in the lawsuit seeking revocation, and thus, in full view of this, even if the tax office imposed additional taxation due to lack of account books, etc. at the time of the disposition, when the account books or other evidentiary documents are different, the amount of income or tax base should be determined by the method of the field investigation (see, etc.

Based on this, as seen earlier, the credit account books (Evidence A9) and the details of the Plaintiff’s credit card sales (Evidence 13) are submitted to calculate the Plaintiff’s sales in the course of the trial prior to remand as seen earlier. Thus, in calculating a legitimate tax amount, the sales amount, which serves as the basis for calculating a legitimate tax amount, shall be calculated by the method of a field investigation based on the above credit account books and the details of credit card sales. The Plaintiff’

(b) Whether prepaid expenses are deducted;

Although it is not clear that the plaintiff's assertion is not clear, it seems that "prepaid money paid to female visitors in the course of running an entertainment drinking house constitutes the outstanding amount as being paid in advance for work, and it seems that it is argued to the purport that "prepaid money claim which is virtually difficult to be recovered due to extinctive prescription or because it is impossible to grasp the location, should be deducted from the tax base as necessary expenses."

However, in calculating business income, bad debt corresponding to necessary expenses may be divided into cases where the relevant claim is legally extinguished and where the relevant claim is legally extinguished, but the debtor's financial perception that it is impossible to collect assets in light of the debtor's financial ability. Since the former is naturally impossible to recover it, the former is included in the necessary expenses for the taxable year including the day on which the business operator's disposal of accounts is extinguished as bad debt, while the latter exists the claim itself, and so, the latter may be included in the necessary expenses for the relevant taxable year only when the business operator counteds bad debt as necessary expenses in the account book where it becomes objectively impossible to recover it as a bad debt (see Supreme Court Decision 2005Du6737, Jun. 1, 2007).

Based on this, the instant case is based on the following: ① (i) it was objectively determined that the prepaid credit was irrecoverable between 2006 and 2010, or there is no evidence to deem that the Plaintiff appropriated the said credit in the account book as bad debts; and (ii) the period of extinctive prescription for five years shall apply to the prepaid credit; (iii) it is apparent that the period of extinctive prescription has not expired until 2010, which is the subject period of each of the instant dispositions.

Therefore, since the Plaintiff’s claim for inclusion in necessary expenses falls short of all necessary expense inclusion requirements as seen earlier, this part of the Plaintiff’s claim is without merit without further review.

(c) Whether credit sales claims are deducted as necessary expenses;

The Plaintiff asserts that the credit sales claim, the extinctive prescription of which has been completed, out of the credit sales claim recorded in the credit account book, is a bad debt and necessary expenses. Thus, the Plaintiff’s credit sales claim arising from the Plaintiff’s entertainment tavern business is subject to the short-term extinctive prescription of one year pursuant to Article 164 subparag. 1 of the Civil Act. As seen earlier, the claim for which prescription has been completed is included in the necessary expenses for the taxable year to which the date of termination belongs, regardless

D. Sub-committee

In full view of the above, when calculating the legitimate amount of tax payable by the Plaintiff, the following table is as follows (see attached Table 2).

Therefore, the imposition of global income tax for the year 2006 through 2008 among the wifes of this case shall not be revoked as it falls short of the justifiable amount of tax, and the imposition of global income tax for the year 2009 shall be revoked only for the portion exceeding KRW 59,146,50, and the imposition of global income tax for the year 2009 shall be revoked only for the portion exceeding KRW 47,429,205. The Plaintiff’s claim has merit within the scope of the above recognition.

4. Conclusion

Therefore, the part regarding the imposition of global income tax for the year 2006 among the judgment of the court of first instance is justifiable. As such, the plaintiff's appeal should be dismissed. The plaintiff's claim for revocation of the imposition of global income tax for the year 2007 through 2010, which is changed in exchange, is justified within the scope of the above recognition, and the remaining claim shall be accepted within the scope of the above recognition, and it shall be dismissed as it is without merit (the judgment of the court of first instance shall be invalidated