Seoul High Court 2014Nu52123 ( October 15, 2014)

Seocho 2013west 0874 (27 May 2013)

(A) If a real estate for real estate was acquired as a equity capital and borrowed as a collateral and the capital is recovered, the interest paid falls under necessary expenses.

(The main point of the judgment) If a person who acquired real estate for rent by himself/herself as a collateral obtains a loan from him/her and collects invested capital, this result in holding real estate for rent as capital of another person, and thus, the loan itself is deemed to have been used to obtain gross income, and the interest paid thereon constitutes necessary expenses.

Article 27 of the Income Tax Act

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The judgment of the court below and the appellate brief all of the records of this case, but the appellant's ground of appeal is not included in the grounds provided in each subparagraph of Article 4 (1) of the Act on Special Cases Concerning the Procedure for Appeal, and the appeal is dismissed pursuant to Article 5 of the Act. It is so decided as per Disposition by the assent of all participating Justices.