If a taxpayer asserts that some of the expenses to be included in deductible expenses reported by the taxpayer are false or that the reported amount is false or that it takes another expense equivalent to the same amount, the burden of proving that the expenses are included in deductible expenses.

In a lawsuit seeking revocation on the grounds of illegality of taxation disposition, the tax authority bears the burden of proving the legality of disposition and the existence of taxation requirement facts. Therefore, in principle, the tax authority bears the burden of proving the amount of expenses to be included in deductible expenses, which serve as the basis for determining the amount of income as the corporate tax base. However, in a case where the taxpayer asserts that some of the expenses reported by the taxpayer are actual expenses or is false, or that the reported amount was required for other expenses of the same amount, the taxpayer needs to prove the existence and amount of other expenses.

Article 26 of the Administrative Litigation Act / [Liability for Admission] Article 9 of the Corporate Tax Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Lee Gyeong-soo et al., Counsel for plaintiff-appellant)

Pungchi Industries Co., Ltd., Counsel for the defendant-appellant Kim Jong-sik

The Director of Gangnam District Office

Seoul High Court Decision 93Gu2249 delivered on April 13, 1994

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

In a lawsuit seeking revocation on the grounds of illegality of taxation disposition, the tax authority bears the burden of proving the legality of disposition and the existence of the taxation requirement fact. Thus, in principle, the tax authority bears the burden of proving the amount of expenses to be included in the calculation of losses, which are the basis for determining the amount of corporate tax income. However, in a case where the taxpayer claims that the amount of part of the reported expenses is false or that the reported expenses is required for other expenses of the same amount when the taxpayer himself/herself assumes that the reported amount is false or that the reported amount is false, the taxpayer needs to prove the existence and amount of other expenses (see Supreme Court Decision 91Nu12912 delivered on March 27, 1992).

In light of the records, in this case where the plaintiff alleged that some of the expenses (in advance return) that the plaintiff reported and entered as deductible expenses were false, but the actual expenses were incurred at other expenses in this amount, the defendant's tax disposition in this case is acceptable at the time of the original adjudication, as long as there is no other evidence that corresponds to the separate expense disbursement of expenses in the decision of the court below by the plaintiff's assertion, and there is no other evidence that can be recognized otherwise, and therefore, the defendant's tax disposition in this case is justified. There is no error in the misapprehension of the legal principles as to the burden of proof of deductible expenses or in the misapprehension of the legal principle as to the

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 Park Jong-ho (Presiding Justice)