Whether the facility funds appropriated in the company's interest management account and the refund interest are deposits or deposits;

The facility funds appropriated in the company interest management account shall not be deposited because the bank approved the loan did not implement the loan for the follow-up management of the loan but did not account as if the loan was executed in form and it was deposited in the road deposit. Of the interest accrued prior to the prior credit which was deducted in advance at that time, the amount to be refunded when the loan was actually lent is not the depositor.

Article 3 of the Corporate Tax Act

Supreme Court Decision 85Nu129 Decided September 10, 1985

Cho Heung Bank Co., Ltd., Counsel for the defendant-appellee

The director of the tax office

Seoul High Court Decision 84Gu169 delivered on November 23, 1985

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

According to the reasoning of the judgment below, the court below held that the plaintiff is a juristic person established under the Banking Act for the purpose of financial business, which is one of its business for long-term, construction of new factories and construction of machinery and equipment funds, etc. which require large amounts of funds, and such loans are operated by the agreement between the financial institution and the borrower as the policy finance of the bank, such as the plaintiff, etc., and the financial institution is subject to the agreement between the financial institution and the borrower pursuant to the loan agreement. If a financial institution grants approval for the loan, it does not actually grant a loan to the whole amount approved for the loan, but it was deposited as a loan account in substitution for the loan management fund account in the name of the borrower in the amount remaining after deducting interest pursuant to the agreed interest rate in advance for the whole amount approved for the loan. The court below did not err in the misapprehension of the legal principles as to the loan management fund in advance when it actually lends funds equivalent to the fair ratio of construction of facilities, which is the purpose of the loan.

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 Kang Jin-young (Presiding Justice)