Cho-2015-west-0783 (2015.06)

Since civil engineering works, etc. cannot be deemed to have been actually conducted and on-site verification, it is a relevant bill in a tax investigation that does not constitute double tax investigation.

It cannot be deemed that civil engineering works, etc. were actually conducted because it is unclear whether the Plaintiff paid the construction cost, and since it is an on-site verification, it shall be deemed that the relevant tax investigation constitutes a double tax investigation.

2015Gudan56802 Assignment Detailed and Revocation of Disposition

The United States of America

The Director of the Pacific District Office

November 2, 2016

November 30, 2016

1. The plaintiff's claim is dismissed.

2. Costs incurred in relation to intervention in the litigation costs shall be borne by the intervenor assisting the defendant, and the remainder;

The Plaintiff shall bear expenses.

Cheong-gu Office

The Defendant’s imposition of capital gains tax of KRW 270,110,320 for the Plaintiff on September 23, 2014 shall be revoked.

1. Details of the disposition;

A. On August 13, 2003, the Plaintiff acquired the ownership of the xm2 (hereinafter referred to as "one piece of land"), on December 27, 2006, the ownership of the Dong-dong xm2 (hereinafter referred to as "Dong-dong 2"), the xm2 (hereinafter referred to as "Dong-dong 2"), the xm2 (hereinafter referred to as "Dong-dong 2"), the xm2 (hereinafter referred to as "Dong-dong 2"), the xm2 (hereinafter referred to as "Dong-dong 3"), and the 1,2, and the xm2 (hereinafter referred to as "the above 3 lots"), respectively, on April 16, 2012, each of the instant parcels of land was expropriated into BB.

B. On May 23, 2012, the Plaintiff reported the transfer income tax on each of the instant land at KRW 895,982,560 with respect to the necessary expenses for each of the instant land at KRW 895,982,560 as follows. The Gangwon Provincial Tax Office conducted an investigation of the transfer income tax on the Plaintiff, and subsequently corrected the transfer income tax as follows:

(c)

C. From April 7, 2014 to April 24, 2014, the National Tax Service: (a) performed a comprehensive audit of the Gangwon Tax Service’s Gangwon Tax Service and conducted a comprehensive audit of each of the instant lands to KRW 707,00,000,000 for the civil construction cost for which the actual construction of each of the instant lands was not verified (i.e., KRW 156,00,000 for the land civil construction cost of KRW 2,300 for the land civil construction cost of KRW 51,00,000 for the land of KRW 156,000 for the land of KRW 2,00 for the necessary cost; and (b) on September 23, 2014, the Defendant having jurisdiction over the Plaintiff’s domicile excluded the said cost from the necessary cost and subsequently notified the Plaintiff of the transfer income tax of KRW 270,110,320 for the land of this case

D. The Plaintiff, who was dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on December 15, 2014.

However, the Tax Tribunal dismissed the above appeal on April 6, 2015.

Evidence Nos. 1, 2, 18, and 1 of Category B (Evidence Nos. 1, 2, and 1) for recognition

Each entry, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Claim for necessary expenses disbursement

Article 97 (1) 2 of the Income Tax Act and Article 163 (3) 1 through 3 of the Enforcement Decree of the same Act are capital expenses, and thus, the Defendant did not recognize it as necessary expenses, and thus, the disposition of this case is unlawful, since it constitutes capital expenses falling under the capital expenses falling under Article 97 (1) 2 of the Income Tax Act and Article 163 (3) 1 through 3 of the Enforcement Decree of the same Act.

2) Claim in violation of the principle of prohibition of duplicate investigation

Even though the Gangwon Tax Office corrected the capital gains tax through the on-site investigation, a public official belonging to the National Tax Service, during the comprehensive audit period of the Gangwon Tax Office's Gangwon Tax Office and after the end of the audit period of the National Tax Service, issued an order to investigate and investigate the Plaintiff and theCC companies (hereinafter "CC companies") to submit transaction-related data, and issued an order to conduct a duplicate tax investigation by visiting the neighboring areas of each of the instant land, questioning and questioning the lessees and residents, demanding confirmation of confirmation, etc., and accordingly, issued the instant disposition. Accordingly, the instant disposition was unlawful as it violates the prohibition of duplicate investigation prohibited under Article 81-4 of the Framework Act on National Taxes.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Whether necessary expenses are disbursed

A) Relevant legal principles

In a lawsuit seeking revocation of taxation, the burden of proof on the tax base, which serves as the basis for taxation, is on the tax authority, and the tax base is deducted necessary expenses from income, so the tax authority shall in principle bear the burden of proof of income and necessary expenses. However, since most of the facts causing necessary expenses are in the sphere controlled by the taxpayer, and it is difficult for the tax authority to prove such fact. Thus, in a case where it is reasonable to allow the taxpayer to prove by taking into account the difficulty of proof or equity between the parties concerned, it accords with the concept of fairness (see, e.g., Supreme Court Decision 2002Du1588, Sept. 23, 2004).

The plaintiff asserts that the expenses paid as construction cost for the civil engineering works of each land of this case shall be deducted as necessary expenses. The data on the expenditure is within the control area of the plaintiff, and it is difficult to prove that the tax authority is the defendant. Therefore, it is reasonable to deem that the plaintiff bears the burden of proof.

B) Whether necessary expenses for the land No. 1 are disbursed

Comprehensively taking account of the overall purport of the arguments in the evidence Nos. 3-1, 4-2 and the whole purport of the argument between the plaintiff and theCC, the contract for construction work (Evidence No. 3-1, hereinafter referred to as "the contract for construction work") between the plaintiff and the non-land No. 1 and the non-land No. 3-2 shall be set at KRW 156,00,000 in the cost of construction work and the period of construction from December 1, 2003 to the 30th of the same month, and the plaintiff shall pay KRW 13,40,000 in the contract deposit, the national bank account in the name of theCC company.

In February 2, 2004, KRW 142,600,000 is recognized in the name of DoD on February 2, 2004.

However, the following circumstances are revealed by comprehensively taking account of the above facts and the purport of Gap evidence Nos. 2 and 6 (including number 1)'s statement or the entire arguments, namely, construction contract (Evidence No. 3-1 of the plaintiff's son Nos. 3-2), and the plaintiff's son's seal is not entirely indicated as the contractor's guarantor, andCC did not report the sales to the tax authority as to the first contract. The plaintiff asserted that the land No. 1 was set up at a height of about 2 meters for the first land and installed a stable and fence. However, neighboring residents of the first land did not claim that the plaintiff paid the above KRW 10 to the plaintiff's son's 10-20-1 of the contract with the construction business operator's land free of charge, and it is not clear that the plaintiff paid the above KRW 10,000,000 to the plaintiff's son's 10-40-10 of the contract with the construction business operator's land.

B) Whether necessary expenses are paid for land Nos. 2 and 3

Comprehensively taking account of the overall purport of the arguments set forth in Gap evidence 5, 6, and 7, the written contract for construction work (Evidence 6-1, hereinafter referred to as "the second contract") between the plaintiff andCC company on December 1, 2006 shall be determined as 292,00,000 won for warehouse construction work, and as from December 1, 2006 to December 28, 2016 by the plaintiff 42,00,000 won for the contract deposit of 00,000 won for construction work between the plaintiff andCC company for 0.10,000 won for 20,000 won for construction work under the name of 0,000,000 won for 20,000 won for construction work among the plaintiff andCC companies for 0.6,00,000 won for construction work under the name of 0,000 won for 20,008.6, 2008.

However, in light of the above evidence, Gap evidence Nos. 22, Eul evidence Nos. 5, 6, 11, 15, 16, 17, and 20 and the overall purport of arguments as to Gap evidence Nos. 22, Eul evidence Nos. 5, 16, 17, and 20, the construction contract (Evidence No. 5-1, No. 6-1) is merely stated as the contractor's seal, and the contract price Nos. 20 is not entered as the contractor's seal. The account that the plaintiff deposited as the construction cost Nos. 2 and 3 is not the corporate account of the CC company, but the private account of this FF, the representative of the CC company, and the fact that the BB corporation accepted land No. 29 on March 29, 2012, and that there is no evidence that the plaintiff paid the construction cost No. 30,000,000 won for the construction work cost to the 20th 7th 207.

C) Therefore, it cannot be deemed that there was any error in the instant disposition denying the necessary expenses asserted by the Plaintiff, and thus, this part of the Plaintiff’s assertion is rejected.

2) Whether the case constitutes a duplicate tax investigation

A) Article 81-4(2) of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014; hereinafter “former Framework Act on National Taxes”) provides that a tax official may not re-examine the same item of tax and the same taxable period unless there are grounds prescribed in each subparagraph.

in violation of such provisions, in duplicate with respect to the same tax item and the same tax period;

An in-depth investigation is illegal and tax assessment based on illegal tax investigation is also illegal (see, e.g., Supreme Court Decision 2004Du12070, Jun. 2, 2006).

On the other hand, the term "tax investigation" means questioning in order to determine or correct the tax base and amount of national tax or inspecting, investigating, or ordering the submission of the relevant account books, documents or other articles (including the investigation of a tax offence under the Procedure for the Punishment of Tax Evaders Act).

Article 3 subparagraphs 1 and 2 of the former Regulations on the Management of Investigations (amended by National Tax Service Directive No. 2105, Jun. 30, 2015; hereinafter referred to as the "former Regulations on the Management of Investigations") and Article 12 (1) (proviso) of the former Regulations on the Management of Investigations (amended by National Tax Service Directive No. 2105, Jun. 30, 2015; hereinafter referred to as the "former Regulations on the Management of Investigations") shall be referred to as "tax investigation in which a violation of the Regulations on the Prohibition of Re-Investigation (Dual Investigations) is at issue"

The term "inspection and investigation of goods, etc." refers to the inspection and investigation conducted under the investigation plan, and the act of confirming facts by a local business trip against a taxpayer or a person, etc. who is deemed to have a transaction with the taxpayer in order to process tax support, simple taxation data, or evidence collection, etc. shall not be regarded as an investigation.

B) Comprehensively taking account of the overall purport of the arguments in the evidence Nos. 12, 13, and 14, a public official belonging to the National Tax Service may recognize the fact that a public official visited BB Corporation or the subordinate residents of each of the instant land under a business trip order on May 21, 2014 and May 22, 2014, or confirmed facts against the residents in the vicinity of each of the instant land. Meanwhile, there is no evidence supporting the Plaintiff’s assertion that a public official belonging to the National Tax Service exercised the right of inquiry and examination against the Plaintiff or the other party to the transaction.

According to the above facts of recognition, on-site verification conducted by public officials belonging to the National Tax Service is deemed to be conducted as part of the comprehensive audit conducted by the National Tax Service on the Gangwon Tax Office, which is the tax authority, and this is distinguishable from the tax investigation conducted by the tax official, which is the exercise of the authority to inquire and investigate the taxpayer or related persons. Therefore, it cannot be viewed as a double tax investigation against

Therefore, we cannot accept this part of the plaintiff's assertion.

3. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.