[1] The case holding that, in case where the officers and employees of the National Agricultural Cooperative Federation subscribed to a mutual aid association with respect to the mutual aid business of the National Agricultural Cooperative Federation under their own name, etc. or subscribed to a customer by credit solicitation, the credit solicitation expenses paid by the above Federation to its officers and employees shall be included in deductible expenses, but the credit solicitation expenses paid

[2] The case holding that merely because the National Agricultural Cooperative Federation substituted the Mutual Support Fund for Reserve Funds for its proper purpose business from the debt account to the capital account, it shall not be included in the calculation of earnings on the ground that it was returned to the

[3] Whether it is difficult for the tax authority to determine the burden of proving the legality of corporate tax assessment and the income belonging to a certain business year, and whether it can be attributed to the business year in which the tax authority investigated and verified it (negative)

[1] Article 9 (see current Article 19) of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998) / [2] Article 12-2 (see current Article 29) of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998), Articles 2, 17 (see current Article 56) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998), Article 1 (see current Article 76) of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy of May 24, 199) / [3] Article 9 (former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 199), Article 14 (see current Article 106 (see current Article 176) of the Administrative Litigation Act) of the former Corporate Tax Act

[3] Supreme Court Decision 98Du1826 delivered on February 25, 2000 (Gong2000Sang, 873)

National Agricultural Cooperative Federation (Attorney Lee Im-soo et al., Counsel for the defendant-appellant)

The director of the tax office

Seoul High Court Decision 2004Nu19950 delivered on August 12, 2005

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

The grounds of appeal are examined.

1. Whether the deductible expenses are included in deductible expenses;

The court of first instance, as cited by the court below, established the following facts as a whole: (a) the plaintiff conducted mutual aid projects for which members or members of the association or members of the association or the general public have already agreed in advance within a certain period of time after receiving the mutual aid fee as one of the plaintiff's proper purpose businesses prescribed by the Agricultural Cooperatives Act; and (b) the plaintiff's officers and employees newly recruited the mutual aid fund at a certain rate of the mutual aid income fee (which is based on not more than 30% of the mutual aid income fee for the previous year based on the growth rate compared to the performance amount of the mutual aid income fee for the previous year). The plaintiff paid 202,362,812 won to the officers and employees of the company for the purpose of obtaining the mutual aid fund for the fire deduction for the articles owned by the plaintiff (hereinafter referred to as "mutual aid fund"), and it is just to determine that the plaintiff's employee's subscription to the mutual aid fund was not directly related to the plaintiff's business or its investment recommendation fund for the articles owned by the plaintiff.

2. Whether the mutual aid fund for unions is included in gross income;

In light of all circumstances, such as the plaintiff's unique characteristics as non-profit corporations as shown in the first instance judgment cited by the court below, the purpose of accumulating the cooperative mutual aid fund as a reserve for its proper purpose business, the use of the cooperative mutual aid fund, the reason that the plaintiff replaced the cooperative mutual aid fund from the debt account of the special accounts for its non-profit business, the reason that the mutual aid fund for the union is used for the original purpose of creation, and the mutual aid fund for the union after substitution of the account is impossible unless there is any legal reason before five years elapse, and the mutual aid fund for the union cannot be returned voluntarily. The court below cannot be viewed as returning the cooperative mutual aid fund for the reason that the plaintiff replaced the cooperative mutual aid fund for the year 1997 by the capital account from the debt account of the special accounts for its guidance business, and there is no error in the misapprehension of legal principles as to the inclusion in the gross income of the reserve fund for proper purpose business.

3. The time the overseas assets are included in the gross income;

The burden of proving the legality of a taxation disposition is on the tax authority, so in a case where the legality of a taxation disposition on income for a certain business year is disputed, the tax authority must prove the existence of taxable income and the fact that the income is attributed to that business year, and it is difficult to determine which business year, and it cannot be deemed that the tax authority has reverted the income for the business year in which the taxable income was investigated and verified, regardless of the period of confirmation of the taxable income (see Supreme Court Decision 98Du1826, Feb. 25, 2000).

In the same purport, the court below cited the judgment of the court of first instance, and determined that this part of the disposition of this case was unlawful on the ground that there is no evidence to deem that the plaintiff acquired the assets of this case in the business year 1998 on the ground that the time of inclusion in the gross income of the assets of this case was not the business year in which the defendant investigated and confirmed the assets of this case, but the plaintiff actually acquired the assets of this case, and that there is no evidence to deem that the plaintiff acquired the assets of this case in the business year 198, in light of the above legal principles and records,

4. Conclusion

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 Lee Hong-hoon (Presiding Justice)