(a) The case that it is deemed as a profit sharing act for the specially related persons;

(b) The case which assessed the amount of loss by calculating the amount of profit when it was disposed of as loss even though there was a right to indemnity by subrogation the borrower;

A. The plaintiff corporation's representative director (A) and (B) make an investment as a shareholder, and the non-party company (A) and its wife and (B) make an investment as shareholder respectively, the non-party company's act of providing the plaintiff's real estate for the bank loan of KRW 80,000,000 for the above non-party company's operation fund and paying KRW 75,00,000 for this interest to the creditor bank is an act of profit under Article 20 of the former Corporate Tax Act (Act No. 2686, Dec. 21, 1974) and Article 46 (1) 1 and 3 of the Enforcement Decree of the former Corporate Tax Act and Article 46 (1) 1 and 3 of the Enforcement Decree of the same Act.

B. Even if the plaintiff corporation is not a person with a special relationship, it is legitimate to deny the disposal of losses on the ground that it cannot be immediately disposed of as bad debts because it offered security for bank loans of KRW 120,000,000 for the operation of the non-party company without obvious reasons, and that it paid 76,20,000 as interest interest thereto to the creditor bank should be disposed of as an asset with the right of indemnity as a subrogation between the above company and the company.

Article 20 of the former Corporate Tax Act (Act No. 2686, Dec. 21, 1974); Article 46 (1) 1 of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 9230, Dec. 30, 1978); Article 46 (1) 3 of the Enforcement Decree of the Corporate Tax Act; Article 46 (2) 9 of the Enforcement Decree of the Corporate Tax Act

Attorney Han Han-chul et al., Counsel for the defendant-appellant

Head of Sungbuk Tax Office

Seoul High Court Decision 80Gu490 decided August 20, 1981

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The Plaintiff’s attorney’s ground of appeal is examined.

According to the reasoning of the judgment below, the court below stated that the above act of the plaintiff 1 and the non-party 2 as the shareholder of the above corporation made an investment in the above non-party 1 as stated in its judgment and the non-party 4 and the above non-party 2 made an investment in the non-party 2 as the shareholder of the above non-party 1, and that the non-party 5, who was the son of the above non-party 1, was appointed as a director since the date of its determination, and the non-party 1 was not able to receive the above amount of 0th of December 30, 1978 as losses, and the above act of the non-party 2's act of acquiring and using the above 0th of February 20, 197 as a collateral for the above 40th of this case's taxation period, and it is not reasonable to accept the above part of the court below's decision that the above act of this case's interest on the non-party 2 as a collateral for the plaintiff 30th of this case.

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 O Sung-sung(Presiding Justice)