Seoul Administrative Court 2008Guhap25012 ( April 10, 2009)

Disposition of non-Inclusion in necessary expenses due to processing and purchase

In the event that the taxpayer asserts that the cost reported is false and that another cost of the same amount is required, the taxpayer should prove the existence and amount of such other cost, and the plaintiff's assertion that it is required to recognize necessary expenses by the estimation investigation without proof of specific purchase cost is without merit.

The contents of the decision shall be the same as attached.

1. The plaintiff's appeal is dismissed.

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

The judgment of the court of first instance shall be revoked. The disposition of imposition of the value-added tax imposed on the plaintiff on January 2, 2007 by the head of the final tax office on February 1, 2001 and the imposition of the global income tax of KRW 1,322,650 for the second period, KRW 4,272,060 for the first period of January 2002, KRW 4,460 for the second period, KRW 590 for the second period, KRW 26,80 for the first period of January 203, KRW 206,80 for the second period, KRW 1,625,310 for the second period, KRW 83,00 for the first period of January 2, 2004, and the imposition of the global income tax of KRW 883,08 for the first period of January 7, 200 for the plaintiff on August 7, 2007 shall be revoked.

1. Quotation of judgment of the first instance;

The court's reasoning concerning this case is as follows. Thus, the court's reasoning is as follows: Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

2. Parts to be dried;

"(2) In a case where tax invoices for expenses reported by a taxpayer are proved to the extent that they were falsely prepared without real transactions to a considerable extent, and it is disputed whether they are actual expenses and the other party to the payment of expenses claimed by a taxpayer is proved to a considerable extent, a taxpayer who is easy to produce books, evidence, and other documents about the actual expenses has been disbursed (see, e.g., Supreme Court Decisions 96Nu8192, Sept. 26, 1997; 2007Du1439, Aug. 20, 2009). The global income tax base and tax amount are to be determined by the actual amount revealed by the method of on-site investigation in principle, and in order to determine the amount by the method of on-site investigation, it is exceptionally permitted only when there is no taxpayer's account book or documentary evidence or any other material part is insufficient or false and the tax authority has no other means to clarify the actual amount of the income. Thus, even if the taxpayer keep and enters the account books determined by the Income Tax Act, if it cannot be determined by another method of on-site investigation by 197.

However, as seen earlier, there is no other evidence to acknowledge that the instant tax invoice was due to a processing transaction, and there is no other cost equivalent to the necessary expenses as alleged by the Plaintiff, and the remaining purchase and sale tax invoices, other than the instant tax invoice, which is found to have been due to the processing transaction, are deemed to have been genuine. As such, it is legitimate to calculate the comprehensive income tax by the method of on-site investigation by excluding only the purchase amount under the instant tax invoice from necessary expenses, and the Plaintiff’s assertion on

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed in its entirety as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.