Main Issues
[1] Requirements for additional taxation
[2] Whether the burden of proof exists with respect to the requirements for the taxation by estimation (i.e., the taxation authority), and if there is no proof, the court shall take
[3] The case revoking the detailed global income and disposition by estimation on the ground that it does not fall under the requirements for estimation taxation
Summary of Judgment
[1] The tax base and tax amount of global income tax shall, in principle, be determined by the actual amount revealed by the field investigation method, and it shall be exceptionally permitted only when there is no taxpayer’s account book or documentary evidence, etc., or when there is no other method to disclose the actual amount of income by the tax authorities without reliability because the important portion is insufficient or false.
[2] The burden of proof for the requirements for the taxation by estimation is against the tax authority. Thus, if the tax authority fails to prove the requirements for the taxation by estimation in a lawsuit, barring any special circumstance, the taxation by the tax authority shall be revoked in its entirety as it is illegal, barring special circumstances.
[3] The case revoking the whole amount of global income tax and disposal by applying the standard income ratio on the ground that the acquisition cost of the commercial building should be calculated according to the ratio of the sales price and the tax authority should calculate the total construction cost of the commercial building in accordance with the final return on the tax base of global income tax and the revised return on the tax base of the commercial building, and submitted the account books and documentary evidence
[Reference Provisions]
[1] Article 120 of the former Income Tax Act (amended by Act No. 4520 of Dec. 8, 1992) (see current Article 80 (3)), Article 169 (see current Article 143) of the former Income Tax Act (amended by Presidential Decree No. 13802 of Dec. 31, 1992) / [2] Article 120 (see current Article 80 (3) of the former Income Tax Act (amended by Act No. 4520 of Dec. 8, 1992); Article 169 (see current Article 143) of the former Income Tax Act (amended by Presidential Decree No. 13802 of Dec. 31, 1992); Article 169 (see current Article 149 (1) of the former Income Tax Act (amended by Act No. 4520 of Dec. 8, 192); Article 169 (12) of the former Income Tax Act (see current Article 130 (19 (2) of the Enforcement Decree of the Income Tax Act)
Reference Cases
[1] [2] Supreme Court Decision 86Nu578 delivered on February 24, 1987 (Gong1987, 571) / [1] Supreme Court Decision 95Nu2708 delivered on July 25, 1995 (Gong1995Ha, 3010) Supreme Court Decision 94Nu15202 delivered on July 30, 1996 (Gong1996Ha, 2722), Supreme Court Decision 96Nu8192 delivered on September 26, 199 (Gong197Ha, 3327), Supreme Court Decision 97Nu20304 delivered on January 15, 199 (Gong199Sang, 309) / [2] Supreme Court Decision 94Nu28168 delivered on March 26, 198 (Gong199, 199)
Plaintiff, Appellee
Plaintiff (Law Firm Sami General Law Office, Attorney Kim Young-soo, Counsel for the plaintiff-appellant)
Defendant, Appellant
Head of the Pakistan Tax Office
Judgment of the lower court
Seoul High Court Decision 96Gu36489 delivered on November 20, 1997
Text
The appeal is dismissed. The costs of appeal are assessed against the defendant.
Reasons
The grounds of appeal are examined.
The tax base and tax amount of global income tax shall, in principle, be determined by the actual amount revealed by the field investigation method, and in order to determine it by the estimation investigation method, it shall be exceptionally permitted only when there is no taxpayer’s account books or documentary evidence, etc. or when there is no other way to disclose the actual amount of income without the credibility of the important part or false entries (see Supreme Court Decision 95Nu2708, Jul. 25, 1995). The burden of proving the requirements for such estimation taxation lies on the defendant, who is the tax authority, who is the defendant. Thus, unless the defendant fails to prove the requirements for such estimation in a lawsuit, barring special circumstances, the court shall only revoke it in its entirety on the ground that the defendant’s estimated taxation was unlawful (see Supreme Court Decision 84Nu216, Mar. 25, 1986).
According to the reasoning of the judgment below, the court below determined the tax base and tax amount on global income tax and revised tax base return after the plaintiff sold nine stores among the buildings in this case in 191, and recognized the fact that the plaintiff submitted the tax base and evidential documents necessary for calculating the global income tax base of the above total amount, and the construction cost of the building in this case among the total construction cost of the building in this case 1,429,303,141, the total construction cost of the building in this case shall be 894,424,055, and submitted the books and evidential documents related thereto. The court below determined that the construction cost of the nine nine stores should be calculated by dividing the total construction cost in proportion to the floor area, not the total construction cost ratio, and the total construction cost of the building in this case shall be calculated by calculating the income standard ratio to the total amount of the above total amount of income. In light of the legal principles as seen above, the court below did not err in the misapprehension of the legal principles as to the calculation of global income tax and the calculation method.
In addition, in light of the records, we agree with the court below's decision that in the case of the commercial building of this case, the construction cost of the commercial building of this case with large scale and the utility value for each floor and use is not reasonable cost calculation method.
The grounds of appeal cannot be accepted.
Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.
Justices Song Jin-hun (Presiding Justice)