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Main Issues
Whether the total amount omitted from sales, including the cost equivalent, can be seen as a bonus for the representative director (affirmative)
Summary of Judgment
If a corporation fails to enter its sales in the account book despite the fact of sales, and if the sales are omitted, it shall be deemed that the total amount of the sales omitted including the amount equivalent to the cost, unless there are other circumstances.
[Reference Provisions]
Article 32(5) of the Corporate Tax Act; Article 94-2(1)1 of the Enforcement Decree of the Corporate Tax Act
Reference Cases
Supreme Court Decision 82Nu471 Delivered on June 14, 1983
Plaintiff-Appellant
Daesung department store Co., Ltd.
Defendant-Appellee
Head of Public Tax Office
Judgment of the lower court
Seoul High Court Decision 83Gu129 delivered on June 1, 1983
Text
The appeal is dismissed.
The costs of appeal are assessed against the plaintiff.
Reasons
We examine the Plaintiff’s ground of appeal.
Where a corporation has failed to enter its sales in the account book despite the fact of sales, the whole amount of the omitted sales, including the amount equivalent to the cost, shall be deemed to have been discharged, unless there are other circumstances (see Supreme Court Decision 82Nu471 delivered on June 14, 1983).
In the same purport, the court below's disposition that held that the defendant's disposition that imposed the Class A earned income tax and the defense tax is legitimate by treating the total amount of KRW 8,519,356, which was exempted from the rent of the wedding hall in the business year 1980 as bonus for the representative director, is legitimate, and there is no illegality in violation of the legal principles as to the imposition of Class A earned income tax, such as the theory of lawsuit, or in violation of the principle of fair taxation or the principle of substantial taxation. The precedent of the lawsuit is not appropriate in this case, unlike the case. The arguments are groundless.
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 on the bench.
Justices O Sung-sung(Presiding Justice)